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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (16447)	2/17/2003 11:15:03 AM
From: jeffbas	Read Replies (1) \| Respond to of 78673

"feel free ..... to ignore me." I will, after commenting on your latest generalization: "trough valuations we will see in the next decade or two will rival those of the 70s. it is as natural as night follows day." As with your generalization on Market Cap/GDP, which ignored the historical context of the shift over the last 100 years from a very capital intensive to a less capital intensive economy, you ignore the historical and investment context of interest rates with your latest generalization. The valuations of the 1970's were accompanied by 8-10% and rising Treasury rates and soaring inflation. Of course that competition for stocks required very low valuations. That is not the investment environment today. I will bet you also believe in a huge housing bubble, when last week Greenspan - and before him me - pointed out that because of low mortgage interest rates the cost of a house relative to the income available to pay for it is lower now than in the early 1990's. Although the relationship is more direct here, this is a clear example of asset pricing reflecting the interest rate environment.