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Yes, there is no question that the graphic indicates that the market is
grossly undervalued. My major problem with the graphic is that history
begins in 1942 and thus does not include history for what I consider to be a
comparable period of extreme valuations ... the 1920's. The other problem is
the channel which has a strong bull market bias. Thus, I think that the
chart is better at identifying extreme overvaluation than extreme
undervaluation. Note the addition of the blue line at the bottom of the
chart.
I believe that absent some historically low PE's and dividend ratios, one
needs to at least wait for the ratio to settle down in the lower end of the
range.
Earl
----- Original Message -----
From: "Rakesh Sahgal" <rakeshsahgal@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, December 11, 2001 7:32 AM
Subject: Re: [RT] S&P 500 TBill/EarningsYield
> Earl,
>
> Going by the graphic can one safely assume, current market is grossly
> oversold/undervalued? Or as you had mentioned in one of your earlier posts
> the quality of reported earnings makes it necessary that this opportunity
> be viewed with caution?
>
>
> Rakesh
>
>
> At 07:18 AM 12/11/01 -0700, you wrote:
> >Someone here requested an update.
> >
> >Earl
> >
> >
> >To unsubscribe from this group, send an email to:
> >realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> >Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
> >
>
>
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