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Politics : High Tolerance Plasticity
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To: kodiak_bull who started this subject7/3/2002 11:49:59 AM
From: pvz  Read Replies (1) of 23153
 
I was just looking at the vix last night and remembering what the commentary was round about the time that it kept setting new lows in March. Am I delusional or correct in remembering "everybody" saying things were different now and a lower vix might be part of a new downward trend more in line with the lower pre-bubble days?

Now, since I would hate for anybody to think of me as a permabull which would be way uncool, I'd prefer to be thought of as contrarian.

I'm looking at my weekly excel graph of the fed model, which shows the market as over 20% undervalued this morning. And I'm thinking of the criticisms of this model that have surfaced in the last couple of days. (still overvalued, PE's too high, flawed logic, etc). Where was that criticism a couple of months ago?

I agree with many of the criticisms and even a simple analysis of the consensus estimates certainly suggests there could be quite a fudge factor in there.

And yet, there is easily accessible data going back to 1987 which suggests that even with a fudge factor, the S&P is more likely to be undervalued than overvalued at this point.

Could the criticism of the fed model, just like the vix in March, be an example of people not wanting to believe that the market is about to turn around?

EDIT: anyone want to start a food fight with me?
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