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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: kumar who wrote (52161)	7/17/2002 12:57:48 PM
From: Softechie	Respond to of 54805

That's a bunch of BS! Who would be around to prop up the house of cards? Old money is leaving in droves...

To: kumar who wrote (52161)	7/17/2002 1:01:00 PM
From: areokat	Respond to of 54805

Sounds reasonable to me. Kat

To: kumar who wrote (52161)	7/17/2002 8:52:37 PM
From: A.L. Reagan	Read Replies (1) \| Respond to of 54805

The biggest problem with this so-called model is that it presumes that capital makes no differentiation of risk between a United States Treasury note and a collection of equities. The second biggest problem is that in the aggregate, reported earnings of S&P 500 companies is quite a bit higher than actual free cash flow. Offsetting this is that equities provide the opportunity for growth above the compound interest rate of a Treasury note. This model, variations of which Ed Yardeni uses, is maybe a coincidental indicator when and if growth offsets the other two factors, but one would go broke relying on it in a slow-growth economy.