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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Douglas Webb who wrote (7212)	4/1/1998 6:26:00 PM
From: Zach E.	Respond to of 14162

Thread, I have recently been looking at Dr. Ed Yardeni's (chief market strategist of Deutsche Morgan Greenfell (sp?)) page and it is not encouraging with respect to stocks. I'm not telling anyone what to do, but folks may want to be careful. Yardeni is not a perma-bear goldbug or anything like that, he is an economist that notes that according to the Fed's valuation model, the market (as measured by the S&P 500) is about 23% overvalued now. The model is quite simple, it compares the current yield of a 10-year bond to the "earnings yield" (earnings divided by price) of the S&P, forecast one year in the future. There are three ways for fair valuation to return. One is for earnings to improve (haven't seen much of that lately), another is for the bond yield to fall (unlikely unless we get into a true deflationary crunch), and the last is for stock prices to fall. Plenty of scary year 2000 stuff on his page too for those interested. yardeni.com Zach