DJ, In the investment world, I would rephrase it a bit to:
it's eps, stupid.
That's why the Yardini (sp?) model shows a dramatic undervaluation. The bears were screaming the over-valuation at the top, but where are they now. I can see it clearly in my model that it is simply a combination of earnings and the current interest rate environment. FWIW, and very little, the model shows the DJIA 50% under-valued at this time. The problem is that the increase in future eps, assuming, will be more than off-set by the actual increase in interest rates. I would agree that we are probably a year away from the increase in interest rates. Nevertheless, just as folks gain some confidence that the eps numbers are real, the other shoe is going to fall. In the short-term, it would seem that we have a committed fed position to be friendly to the equity markets. However, no one seems to want to fly on 9/11, why would anyone other than me be invested?
MG will be able to tell us how the bond funds are doing. However, I would imagine that at this point they are holding their own. On a personal note, it looks like I may shortly be joining MG in the northwest.
Just a View from the Fox,
Berney |
