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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: studdog who wrote (12916)	1/10/1998 1:05:00 PM
From: Investor2	Read Replies (1) \| Respond to of 18056

RE: Valuation In my opinion, the S&P500 forward earnings estimate of $50.70 is too high. My guess is $49 or maybe even less. So, fair value of S&P 500 = $49.00/.0538 = 911 Earnings could be less than $49, but bond yields could also be less than 0.0538. Also, as we've seen in the recent past, the S&P500 could trade above fair valuation levels. All in all, I believe the US market as a whole is slightly overvalued now, but not enough to sell core holdings and pay taxes on capital gains. I believe there are market segments (e.g., semiconductor equipment stocks) that are undervalued or, at the very least, fairly valued. As you said, an economic meltdown could cause earnings to plummet. However, I think that S&P500 earnings of $47 to $49 is a reasonable (conservative) assumption. Best wishes, I2

To: studdog who wrote (12916)	1/10/1998 3:30:00 PM
From: Dwight Taylor	Respond to of 18056

Karl--I think all these indicators and such are ideal in normal circumstances unlike today. The global economy is struggling. I don't follow TA but there is no way these extraordinary circumstances can be explained via charting. Things happen too quick. Yesterday NYSE volume was the third largest in history, did the charts have a way of predicting this? Analysts 12 month projections? What for? For example, what firm was it a month or so ago that had initiated a buy for EFII, the day that it dropped by half. Later in the same day that buy was changed to a sell. Analysts are no wizards by any means.

To: studdog who wrote (12916)	1/11/1998 12:28:00 AM
From: Brad Bolen	Respond to of 18056

RE: Sooooo, By this criteria, the S&P 500 is no longer overvalued and is in fact 2% undervalued. The thing that I think one in the bearish camp must believe ( those such as myself), is the possiblity that earnings have not been REVISED downwards nearly as much as they will. My feeling is that this will be a phenom that will last well towards the end of 98 and even beyond. With a third of the world's populace facing real depression (read deflation), how will we stay competitive? B.