Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: Tommaso who wrote (9884)	11/16/1997 10:05:00 PM
From: studdog	Read Replies (1) of 94695

OK, interesting scenarios unfolding, bond yields down, Japan up, dollar down. How low can bonds go? If inflation is really 1.5% or possibly less it is my understanding that it is not unreasonable for long bonds to be 4-5%. If we roll out the S&P valuation model and plug in 5%, and keep current forward earnings estimates of $50, we get fair value of 1000 on the S&P. I would consider this high end of plausible, but plausible. Add another 5% for usual exuberance and you get 1050, Hmmm, Abbey Cohen may turn out to be right after all. That is here call for the S&P in a few months. This is fascinating, I'm actually beginning to understand this game, I guess that means I will no longer be able to beat the S&P and will probably lose money. :) Karl

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