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Strategies & Market Trends : Shorting SPY for fun and profit.

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To: Premier who wrote (74)11/10/1997 10:34:00 AM
From: studdog  Read Replies (1) of 346
 
Now we have some real current numbers to plug into our model. Gee, I feel like a real economist. ( In other words I don't have a clue).

12 month forward earnings = $50.37
10 year bond = .05923

Fair value of S&P 500 = 850

at 930, S&P= 9.4% overvalued

since I think the number for earnings is going to come down, maybe 5%
I am comfortable being flat.

if revision is 5% down, then earnings will be 47.5

then FV = 800

Remember, This is just a model and can be wrong. Also, an overvalued market can get more overvalued. So be careful out there.

Karl
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