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

To: Premier who wrote (74)	11/10/1997 10:25:00 AM
From: studdog	Read Replies (2) \| Respond to of 346

Premier, Thanks mucho for the number. I still think that number is going to come down. I don't know by how much or when. The big multinationals I believe will see decrease demand in Asia, and while demand elsewhere will be strong they won't be able to raise prices, may have to lower them (see disk drives, autos) and will have higher wage costs. I think your trigger for net short is pretty conservative but probably smart. I want to reiterate that my primary purpose in shorting SPY is portfolio protection without having to sell (taxable account). Right now I am a few bucks net short because I decided to sell companies I was losing confidence in. I will probably pick up others to keep myself flat. Karl

To: Premier who wrote (74)	11/10/1997 10:34:00 AM
From: studdog	Read Replies (1) \| Respond to of 346

Now we have some real current numbers to plug into our model. Gee, I feel like a real economist. ( In other words I don't have a clue). 12 month forward earnings = $50.37 10 year bond = .05923 Fair value of S&P 500 = 850 at 930, S&P= 9.4% overvalued since I think the number for earnings is going to come down, maybe 5% I am comfortable being flat. if revision is 5% down, then earnings will be 47.5 then FV = 800 Remember, This is just a model and can be wrong. Also, an overvalued market can get more overvalued. So be careful out there. Karl