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Strategies & Market Trends : SiliconInvestor All Stars Forum -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (277)	2/23/2007 7:23:21 AM
From: da_cheif™	Respond to of 1718

"A lot hinges on interest rates.. "........higher interest rates are a product of rising inflation which is a product a world wide flite to free enterprise and democracy.......a rising stock market is the driving force behind a rising economy......what is coming will make the 90s look like childs play.....and what is coming will make wat happened in japan look like childs play.....40k and beyond......

To: John Vosilla who wrote (277)	2/23/2007 9:54:43 AM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 1718

John, I've gotta go with da cheif on this one. Valuing stocks is not too different than valuing investment property - the only difference is the risk-premium. You still use net earnings (growth rental increases) inflation interest rates Cycle issues Whereas the housing bears talk about cap rates of 3% in residential real estate versus a 5.25% risk free, they fail to reconcile the 6%+ equity earnings yield versus the same risk free. Equities are as cheap today as they were in 1982 all else equal. Meanwhile the deflationists talk about prices falling, but this is against a 1.7% global real rate. Inflation is always a monetary pheonomenan (sp) and if cash is trash, there will be inflation. Hence the need to be long it vis a vis anything that can provide you yield, and of course gold, which has always been a trustworthy inflation hedge.