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Strategies & Market Trends : Value Investing
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To: Graham Osborn who wrote (55404)6/3/2015 2:30:20 PM
From: E_K_S2 Recommendations

Recommended By
Mattyice
mopgcw

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Re: Graham No.

Also, doesn't the very low interest rate environment distort the historical PE. If you take the inverse of the PE (ie E/P) you get the market yield which s/d be a function of the Treasury rate plus inflation. The Treasury rate is now at a historical low level (because of QE). Even if you use the 10-year average of "real" (inflation-adjusted) earnings (ie. the Shiller adjusted figure); E/P is artificially low.

I expect the market yield (and the market P/E) to eventually normalize but his could take years rather than months.

The key thing w/ the Graham No. valuation model for a specific company, is the earnings and Book Value, both drive the valuation figure especially if the candidate company has little to no LT debt.

So where do you get 50 years of historical data?

There is a problem also looking in the rear view mirror that far back. EK was one stock I watched in the 70's because of their stable earnings and growing BV. We all know how that one ended.

EKS
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