Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (9084)	11/4/1997 12:11:00 AM
From: Elllk	Respond to of 94695

Carl A compelling analysis. Thanks. Larry

To: Bilow who wrote (9084)	11/4/1997 12:35:00 AM
From: Berney	Read Replies (2) \| Respond to of 94695

Carl, Wow that's a lot of data. Let me try to simplify my view. I'm a Graham fan. In his The Intelligent Investor, he had an interesting formula to gauge approximate FMV (Tried to look up the page but couldn't find it on short notice). Somewhat modified for current events, is: (Current Year EPS (8.5 + (2 Proj Growth Rate of EPS)) * (4.4/7.7)) So then let's plug in the pieces (I love algebra). The October S&P Stock Guide estimated 1997 EPS for the S&P to be $44.49. Let's see what happens to the FMV at different projected growth rates: GROWTH FMV S&P RATE INDEX 10 797 11 853 12 909 13 965 Seems this quarter is coming in at about 12% growth. Comments? Berney

To: Bilow who wrote (9084)	11/4/1997 2:13:00 AM
From: Brad Bolen	Respond to of 94695

I have pondered this too, but not quite so intelligently. I can only imagine it is that there are more dollars chasing fewer (realative to dollars) stocks. You know...more people investing than ever, et.al. I know it seems too simple, but I have no other explaination other than the madness of crowds, and I sure don't want to believe that. B> <<<<<< Now. What has the SPX done over the last three years? SPX +27.74% I think this is out of whack. So how about it bulls? Show me where all this new fundamental value for the economy and the SPX is coming from? If you argue stock prices are going to increase because they have increased so far, I will ignore you. I just want to see where the economic numbers suggest paying so much more for stocks now than in 1994. -- Carl