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To: Glenn D. Rudolph who wrote (131746)	9/22/2001 4:53:25 PM
From: Oeconomicus	Read Replies (2) \| Respond to of 164684

We should be moving into "fair value" at some point. Ed Yardeni says we've moved past it and are currently 15% undervalued on the S&P (not counting yesterday, I think). Of course, he bases that on forward earnings estimates. I doubt I'd get into an argument if I said forward earnings estimates aren't very reliable, especially if your talking about bottom up estimates, adding up estimates on individual stocks. Taking top down estimates instead and discounting them for the likely effects of current events, a reasonable forward number would put the S&P right around Yardeni's "fair value PE" (which is based on ten year treasuries). For more discussion of this, look at the last day and a half of the Kahuna thread. Bob