Replies to post #106950 on Zeev's Turnips Patch-No Politics (ZEEV)

[Culmus]

Long range stock valuation research was undertaken by Robert Shiller, one of his papers is here:

http://aida.econ.yale.edu/~shiller/online/jpmalt.pdf

The monthly PE ratio since the 1880s he put up here:

http://aida.econ.yale.edu/~shiller/data/ie_data.htm

Please have a look at how earnings are calculated at the bottom of this page:

http://aida.econ.yale.edu/~shiller/data/chapt26.html

On the interrelationship of stock prices and bond yields he wrote this:

http://cowles.econ.yale.edu/P/cp/p08a/p0833.pdf

More is available here:

http://aida.econ.yale.edu/~shiller/online.htm

http://aida.econ.yale.edu/~shiller/publications.htm

Culmus

[Kirk]

That psychology changed to Bonds should yield more than stock because of the appreciation potential of the enterprise". One would think that after the wave of bankruptcies over the last three years, the old philosophy will come back,...

Well, holders of Enron, WorldCon, UAL and other bonds sure didn't do too well.

I think stocks took on more value because they provide an inflation hedge not offered by bonds. Now we have TIPS and iBonds which could take some of the value out of stocks.