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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (12803)	7/16/2001 10:11:55 AM
From: jeffbas	Read Replies (1) \| Respond to of 78515

If inflation-adjusted BOND rates are a good predictor of NASDAQ, then you ought to get bullish. Bond rates are higher than at the beginning of April: quote.yahoo.com^TYX&d=t and inflation rates considerably lower, in my opinion, if you take into account drops in energy prices, and the impact of lots of layoffs, which are yet to be seen in the numbers. Furthermore, evidence of things like technology equipment available at a fraction of list on the secondhand market probably will never make it into the numbers. I frankly would be surprised if true inflation was above zero at this time, and suspect that inflation adjusted bond rates are actually up a lot in the last 6 months.

To: Tommaso who wrote (12803)	7/16/2001 1:50:28 PM
From: Snowshoe	Read Replies (1) \| Respond to of 78515

Do you have a source of up-to-date quotes and charts for the rate the feds are paying on inflation-adjusted bonds?

To: Tommaso who wrote (12803)	7/17/2001 2:31:12 PM
From: Bob Rudd	Respond to of 78515

<<Incidentally, the St. Louis Fed's monetary publication just ran an overlay of Inflation adjusted bond rates against the NASDAQ index. For some reason, it's an almost perfect predictor of the NASDAQ. The interest rates, after a brief rise, recently turned down again. We'll see it it coincides.>> Here's link to research you referred to: stls.frb.org While the chart does show solid correlation, I've found these relationships fall apart the day after I try to trade on them. Nevetheless the rationale, that high expected returns in competing stock market [which could also be described as higher risk preference], pull money away from safer securities, is plausible.