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Strategies & Market Trends : Shorting SPY for fun and profit. -- Ignore unavailable to you. Want to Upgrade?

To: Premier who wrote (73)	11/10/1997 9:49:00 AM
From: Premier	Read Replies (2) \| Respond to of 346

Berney: I called IBES, 1-800-get-ibes, for 12 month forward bottoms up consensus S&P earnings for the latest week. The number is $50.37. Accordingly the fair value of S&P is 50.37/.05955=846. Thus overvaluation is less than 10%. IBES will not give out this number every week without charge. The fair value indicator should be used as lagged indicator i.e. SPY short strategy should not be initiated until overvaluation is 30%+,IMHO. Premier

To: Premier who wrote (73)	11/10/1997 10:26:00 AM
From: Berney	Respond to of 346

Premier, I really appreciate your input and the IBES number. Frankly, I am now more comfortable with the 12% growth rate going forward. Let's put this in perspective; the EPS growth rate for the last five years was 17%. Thus, the growth rate has already been significanrly reduced. However, we are probably both in the ballpark. I note with humor that at the 12.1 figure I used earlier, fair value would be 928. Where did it close Friday, 928. I'm sure its a statistical quirk. Berney