Replies to post #42383 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi Tom

I agree with everything you are saying.

With my modification I would adjust the target from 20 to somewhere between 10 and 15.

Regardless of p/e ratio I would rather buy stocks at a peak in interest rates than at the trough they are at now. That is my only problem with the Relative Value indicator. Stocks can't be a bargain if interest rates will double.

Toofuzzy

[JDerb]

Hi Tom..

With the current annual inflation rate (September) at 2.24 and this week's VL P/E at 20.1 it would seem that at 22.34 we are in the red zone for relative valuation. S/T are at 1.12 still below the inflation rate.

I have read your explanation regarding Elaine before but it certainly is a timely and relevant reminder. IMHO. ;o)

Take care.
Jon

[The Grabber]

"In the '80s, both inflation and interest rates were very high"

Tell me!

Our fixed 30 yr mortgage interest rate in 1984 when we moved to Dallas was 15.25% (That is not a typo).