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To: AllansAlias who wrote (48884)	8/3/2002 8:44:02 AM
From: MythMan	Respond to of 209892

tell me again why the Red Sox sold Babe Ruth? -g-

To: AllansAlias who wrote (48884)	8/3/2002 11:49:50 AM
From: MythMan	Read Replies (3) \| Respond to of 209892

From the cover story on Barron's -g- >>Since 1980, stocks have achieved big gains after the Fed Model reaches undervalued levels. Currently, the market sits at one of its steepest discounts to “fair value” in recent decades. When such depths are reached, the index tends to surge shortly thereafter.<< >>A bevy of stock-analysis tools, from the fabled Fed model to dividend-discount measures, are now flashing Buy ratings. Warts and all, they merit attention as trading, if not quite long-term timing, devices.<<

To: AllansAlias who wrote (48884)	8/3/2002 12:08:29 PM
From: MythMan	Read Replies (1) \| Respond to of 209892

In the interest of balanced reporting... >>It's worth noting, too, that the model's predictive power seems to break down almost completely under back testing in the years before 1982, which was the start of the 18-year bull market. This raises the prospect that it is a framework best suited for a discrete period of time, when interest rates were steadily declining and P/E multiples progressively ascending, in self-reinforcing symbiosis. Bryan Taylor of Global Financial Data, suggests that the Fed Model may end up like the statistical muses of investors in prior decades, such as "the Barron's Confidence Index in the 1950s and Tobin's Q in the 1960s," which worked well up to around the point they attained prominence.<<

To: AllansAlias who wrote (48884)	8/3/2002 12:11:57 PM
From: Mike M2	Read Replies (1) \| Respond to of 209892

allan, do you you have a chart of the 2001 rates cuts vs S & P ? thanks mike

To: AllansAlias who wrote (48884)	8/3/2002 1:18:22 PM
From: MythMan	Read Replies (3) \| Respond to of 209892

>>The model can be used in more specific ways that can help in zeroing in on attractive stocks, too. Applied to most sectors of the market, the model suggests stocks are attractively valued. Technology is an exception. Tech stocks continue to comprise 14% of the S&P 500 and yet are expected to contribute only 5% of overall earnings in 2003, according to ISI Group. Remove tech and the market P/E based on expected 2003 profits stands below 14 -- well within the range of historical norms and arguably quite undervalued with interest rates so low. That situation, in turn, leaves a cushion under non-tech investors at these levels, in the event that earnings fail to live up to forecasts next year. That said, investors have to remember that an undervalued reading can be rectified in one of three ways: stock prices could rise, interest rates could climb, or expected earnings could collapse -- or any combination thereof.<< this is consistent with your recent postings about tech vs. non-tech.