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Politics : High Tolerance Plasticity

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To: LK2 who wrote (14301)	6/7/2002 8:59:21 AM
From: pvz	Read Replies (2) of 23153

Timelord, it really is hard watching the futures down and trying to keep a cool head. The other measure I'm following is the Fed S&P valuation model. Right now the S&P is about 4% undervalued. I know there are all sorts of issues with the methodology, but it has worked up until now. What I find most interesting is that we're nearly at the end of the quarter. That means the model starts using new projected earnings in 23 days from now. As at last night's close, using next quarter's projected earnings, the S&P will be about 9% undervalued. I don't want to suggest in any way that this number has anything to do with the technical message that the market is going down. But since the market as a whole tends to live in overvaluation territory, it does tell me that quality companies with excellent debt ratings, which are trading below this fair value, also have an excellent chance of being good buys round about now. pvz

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