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Strategies & Market Trends : Roger's 1998 Short Picks
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To: Michael who wrote (14971)11/1/1998 1:20:00 PM
From: Roger A. Babb  Read Replies (1) of 18691
 
Micheal, The following quote is from today's Sunday paper:

"L. Roy Phapp, a money manager in Phoenix, notes that, with Treasury-bond yields around 5 percent, near their lowest level in some 30 years, buyers must pay the equivalent of 20 times earnings for T-bonds, which unlike stocks offer no hope of growth. Stocks are selling at approximately the same P-E, Phapp says, therefore it would appear that stocks are a much better value to purchase today."

This is the "new market thinking". Historically stocks have been required to have a lower P-E than bonds because stocks have downside risk and T-bonds are safe.
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