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To: edward miller who wrote (13698)	2/1/1998 12:37:00 PM
From: Jack Clarke	Read Replies (1) \| Respond to of 18056

Hi Ed, >>My perspective is that I have felt the market is overvalued for so long that I decided that I was missing something fundamental. Can't argue at all. In the old Mad Comics (1950s), somebody used to say, "When you are beating your head against a wall, it feels good when you stop." My head has been bandaged for about 4,000 Dow points now, so I am certainly no one to argue with anybody. I just keep thinking, "2 + 2 = 4". But I am beginning to wonder. Jack

To: edward miller who wrote (13698)	2/1/1998 12:50:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 18056

Ed, there are a lot of intelligent people, almost as intelligent as posters on this thread, that actually do not see the overvaluation. They measure a fair value based on the S&P earnings and its relation to current interest rates and come up with fair valuation. These arguments have been made on this thread as well. I think that we have been in a secular decline of interest rates, and if you think that the long term bond could breach 5.5% later this year, than maybe the market is not as overvalued as standard indicators would suggest. Having said that, I must also say that the reason for such possible low interest rates is the importation of some deflation from the rim, and the attached price for such an import is possible reduction in the earning side of the equation. This will, however, affect only the short term outlook. The long term outlook of the market may be tied up not only to the excess liquidity as you pointed, but also to the expansion of the worldwide "consumer society". This is a mega trend that, I believe will keep the secular bull alive for a little longer. Zeev