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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: Math Junkie who wrote (491)	5/17/2002 5:12:02 PM
From: exp	Respond to of 30712

Richard, re SPX valuation: (1) We don't know what the market will do P/E-wise with new earnings estimates from S&P ... yet, if main rating agencies adopt this standard most investors will be profoundly influenced by these new earnings # and it almost certainly will be reflected in stock prices the same way that pro-forma earnings are now used to justify current prices. (2) The Fed model is obviously limited as it relies on several shaky assumptions such as that additional risk of owning stocks perfectly cancels out benefits of earnings growth when comparing stocks and bonds. Yet, Wall Street strategists use it and so do agencies such as S&P.