Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 34.72

-2.3%

3:59 PM EST

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To: Ibexx who wrote (25635)	7/5/1997 9:13:00 AM
From: Road Walker	of 186894

Ibexx, Joan, All, There was an interesting article / chart in WSJ within the last two weeks. It showed the relationship between cash flow (real investor earnings) of the S&P 500 and long bond yields. Historically, the long bond yield stays VERY close to one point below the stock cash flow (the premium earned for more risk in stocks). The chart clearly shows that when this relative valuation gets out of whack, that either the bond yields or the stock prices move to correct the imbalance. Currently, the earnings yield on stocks is about a point BELOW the the less risky long bond yield. To correct to the normal valuation balance, bond yields have to come down or stock prices have to come down or cash flow has to go way up. Soon. FWIW, John

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