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

To: porcupine --''''> who wrote (1429)	3/14/1999 8:25:00 PM
From: Freedom Fighter	Respond to of 1722

Porc, >>As per the previous posting, Hussman's "Growth Channel" sure looks like technical analysis to me.<< The growth channel he presents is essentially the result of a somewhat steady percentage of profits being reinvested (and the rest distributed as dividends) at a somewhat steady ROE throughout the post war period. This would seem, at least in my mind, to be a fundamental analysis because it is based on 'real' rates of return for aggregate American business that have been very steady and that classical economics would tend to say should remain within a steady range give or take. I can't read his mind of course but he most likely is assuming that a similar percentage of earnings will be reinvested going forward at a similar rate of return thus producing similar growth rates in profits +/-. Without giving details, I use a similar model for both individual and aggregate business "as one of many approaches" for finding and estimating value. Buffettology presents a similar approach. The assumptions on ROE going forward and what percentage of profits can be reinvested are the key imputs and the subjective fundamental areas in which two analysts might differ. I would agree that just extending a line from past to future is technical. Wayne