Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

Actually, DCF could lead you to believe this market has much more to go. Since interest rates have been declared by the feds as still "reducible" the choices left for an investor between money markets that have principal safety but diminishing returns, bonds of all colors with variable safety and relatively meager returns (and possible capital losses if rates turn) and stocks paying dividends (and for that, increasing in time dividends) as well as PE in the range of around 16 to 20, DCF calculations with even modest assumptions on earnings growth of solid companies would indicate equities (well, some equities) are "the only game" in town, that is, until the market starts to see another recession and decreased earnings on the horizons... That is after all what the "fed model" of fair equities valuations is all about...

Zeev