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

To: AurumRabosa who wrote (69694)	10/28/1999 2:55:00 PM
From: gnuman	Respond to of 132070

HP surprised at market reaction to warning. infoworld.com

To: AurumRabosa who wrote (69694)	10/28/1999 3:21:00 PM
From: Les H	Read Replies (1) \| Respond to of 132070

Cohen said she believes US equity markets remain about 5% undervalued relative to bonds. That means bonds are 5% overvalued relative to stocks.

To: AurumRabosa who wrote (69694)	10/28/1999 3:57:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Ron, It means that Abby changes her models and inputs so she can say the only thing she knows how to say when it comes to the market. (undervalued and up) Seriously, most people believe that a dollar of earnings is worth more as interest rates fall and less as they rise. They compare the earnings yield of a stock to interest rates, discount free cash flow etc... Others believe there is a relationship between interest rates and the return that businesses will get on their investments. Others believe that all of this stuff balances out and stock prices in aggregate tend to revert to their replacement cost regardless of interest rates. I'm not sure what Abby believes. I haven't been able to make any sense of her model. All I know is that no matter where earnings, interest rates, and stock prices go, they are always undervalued and will go up. Wayne