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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: valueminded who wrote (61698)	6/8/1999 1:07:00 PM
From: IceShark	Respond to of 132070

Answer: 1) Stocks are better from the get go. 2) Yes. 3) Yes, because your assumption scenario (stocks with an earnings growth rate in excess of bond yields and constant to increasing PE multiples) is exactly what the herd expects to happen. Simple, eh?

To: valueminded who wrote (61698)	6/8/1999 2:17:00 PM
From: eWhartHog	Read Replies (1) \| Respond to of 132070

Chris, <<1. how many years do I have to wait before my 1000$ invested in the SP is worth the same as my 1000 investment in the bond (assuming all earnings are reinvested at the 10% earnings growth rate and returned to me as a return on capital at the end of the time period)>> Is this a trick question? $1000 of stock is worth the same as $1000 of bonds. The time to wait is zero years. <<If I get 7% on a aaa rated bond and the marketeers begin with a SP pe of 33 and earnings growth of 10% per year. Then:>> How many years will it be before S&P profits exceed the entire US gross domestic product if profits grow at 10% in an economy growing at 4%? Assuming the market cap of the S&P 500 is equal to current GDP, which is in the ballpark, I make it to be 63 years. Cheers, John