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Strategies & Market Trends : Investing during a Bear Market

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To: studdog who wrote (218)11/15/1997 7:38:00 PM
From: Bearded One  Read Replies (1) of 226
 
I have a timing problem with your numbers. I would think that you want forward earnings for the S&P, but current bond yields for your 10 year note, since the current yield is what you're going to get. On that assumption, it's not 47.50/0.055 but 47.50/0.585 = 818.

In any case, however, I think that in a deflationary environment, earnings can drop dramatically, and maybe even go negative.
Especially given that I believe lots of earnings are pretty fake. BWDIK
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