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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: sylvester80 who wrote (96667)	7/21/2002 12:48:32 PM
From: ChrisJP	Read Replies (1) \| Respond to of 99280

Hi sylvester80, I looked at the Yardeni charts .... thanks. All I can say is that when the Fed model show stocks grossly overvalued, it didn't stop people from buying them. An undervalued model probably won't keep people from selling them. There are two way for stocks to become properly valued according to the Fed model. 1. Stocks can rise 2. The Fed model can drop. Regards, Chris

To: sylvester80 who wrote (96667)	7/21/2002 2:45:47 PM
From: XBrit	Read Replies (1) \| Respond to of 99280

The "Fed" model was completely wrong through most of the 60's boom. Interest rates kept going up, and the stock market kept going up. It's only appeared to work since 1980, because interest rates and the markets happen to have had a secular trend in opposite directions through that period. Mostly a coincidence, if you look at it on a 50-100 year timescale. This very issue is discussed in much detail in "Valuing Wall Street" by Smithers and Wright... an excellent book. amazon.com