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wabmester · 05-22-2006, 12:09 AM

Great article.* *Probably about a year's worth of thread fodder in there.

In case the link above didn't work for you, try this one.

I didn't follow his argument against the fed model, though.* *He argues that you can't compare E/P to the yield on the 10-year because E/P is real and the 10-year is nominal.

If he really believed that, then we should be comparing E/P to the real yield, which is about 2%.* *So stocks should be fairly valued at a P/E of 50 today by his logic, which is counter to his argument that the fed model allows stocks to get overvalued.

05-22-2006, 12:09 AM	#2
wabmester Thinks s/he gets paid by the post Join Date: Dec 2003 Posts: 4,461	Great article.* Probably about a year's worth of thread fodder in there. In case the link above didn't work for you, try this one. I didn't follow his argument against the fed model, though. He argues that you can't compare E/P to the yield on the 10-year because E/P is real and the 10-year is nominal. If he really believed that, then we should be comparing E/P to the real yield, which is about 2%. *So stocks should be fairly valued at a P/E of 50 today by his logic, which is counter to his argument that the fed model allows stocks to get overvalued.