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RE: Down goes the Dow

Ghost of Igloi wrote:

agip wrote:

Ghost of Igloi wrote:

Interestingly that analysts no longer mention the Fed Model or the Dividend Discount Model as suppprt for equity valuations. The proxy on the model for Treasuries is usually the 10 Year but that has long passed the dividend yield on the S&P 500. Interestingly the S&P yield is now 1.7% while the 3 month T-Bill is now over 2.0%.


most people use the P/E ratio...which shows stocks to be a little expensive. Esp considering fairly low interest rates.

the fed model doesn't really work when the fed is manipulating inter and long term interest rates.
dividend discount model never worked really. not for 30 years anyway.

the Shiller PE is discredited since it says we should have exited the stock market in around 1996 and stayed out ever since.

valuation is not easy

*common view at market tops

*also a common view in the middle of long bull markets

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