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 : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (44)	3/7/1998 3:39:00 AM
From: Berney	Read Replies (1) \| Respond to of 1722

Porcupine -- As usual, an excellent discussion to which I wish I had more time to respond. However, as I review 97, most of the increase came about in May and June. I'm painfully aware of this because I sat on the sidelines believing the Market was overvalued. I agree the Market and most DJIA stocks are overvalued. This and $2 will buy us each a cup of coffee. What would Graham do under these circumstances? As I remember, he preached that one should commit no less than 25% or more than 75% to any Market. I'll post an analysis I did of this issue when I get the chance. But, it seems that one would be prudent to limit his exposure and say "thank you Mr. Market". Berney

To: porcupine --''''> who wrote (44)	3/7/1998 4:42:00 PM
From: porcupine --''''>	Read Replies (3) \| Respond to of 1722

Wayne Compares Interest on Bonds With Earnings Yields Stocks: [An editted excerpt from a work in progress] ....[E]arnings, whether 'fully reported' or 'cash' are mostly not received by investors. They are reinvested. That is where the growth comes from. In order to compare them to bonds you must reinvest most of the bond interest and compare earnings/cash earnings to the new bond income stream. ....[I]t takes almost a lifetime to catch up to the highest quality corporates. That has never been even remotely the case in financial history. That this is lunacy is even more obvious when you consider the fact that the corporate earnings streams are essentially full of it when stock options etc..are considered. As a private owner those options expenses would be very real. If markets truly are efficient over the long haul ("a weighing machine" Graham) they will someday be important in investors calculations. (reality that is) If you were a private owner you would have to be a maniac to accept the additional risks and active management responsibilities while never seeing the same income that bonds could get you in your lifetime. Maybe your grandchildren's! Wayne

To: porcupine --''''> who wrote (44)	3/9/1998 6:54:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

> How does a 5% increase in the Dow's earnings translate automatically > to a 10% increase in the DOW? What I intended to say was that a 5 "percent-of-a-percent" drop in interest rates [to date] and a 5% increase in earnings [by the end of 1998] mathematically implies that a 10% increase in the Dow would be in the same position as beforehand, relative to bonds. I added that the Dow has already realized 8/10 of that price gain [though not yet the 5% increase in earnings over 1997]. Reynolds Russell web.idirect.com "There are no sure and easy paths to riches in Wall Street or anywhere else." (Benjamin Graham)