Deprecated: preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/traders/public_html/wp-includes/functions-formatting.php on line 76
This is just a quick follow up. For further details see my first message from last summer on the I/B/E/S Valuation Model for the stock exchange.
What’s amazing is that according to this model, we are even more undervalued now. Pretty much as “cheap” as the bear market bottom in 2002. So, when a fairly good historical indicator goes totally berserk like this, it can be two things:
- circumstances have changed (GIGO principle)
- something real is going on
If you like the first option, you can trot out the 10 Year Note’s crazy low yield and blame it for the outlier result.
If you like the second, you can retort with, “Pshaw! We had the same rates in 2002 and look how far equities ran.”
In either case, it’s your call.
(FYI:I’m leaning towards #2)
Enjoyed this? Don't miss the next one, grab the feed or