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« Constructive Postponement | Main | My First Trade »

March 09, 2011

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oldprof

DE - I am familiar with the work of both Montier and Hussman, and I read most of it. I have commented on some of the differences in past articles.

Also, as you can see, the valuation element is only one part of my approach.

Please also note that I use different tools for short-term timing, and my forecast changes accordingly.

Taken together, these elements work well.

Thanks for your question.

Jeff

DE

Check out James Montier recently released GMO whitepaper. Fed model is was only useful for a short period of time. Hussman has been saying this as well. In theory your approach makes sense, pensions have two choices bonds or stocks, but in reality does simply comparing yields really have predictive power?

Paul in KC

"owe"

Paul in KC

Jeff; I osw you a beer for this post!

oldprof

RB - I take interest rate data from the Fed's H15 series. The corporate yields are from "MOODY'S YIELD ON SEASONED CORPORATE BONDS - ALL INDUSTRIES, BAA"

There is a lot of useful free data at the Fed site.

Jeff

lou

Good stuff here. The "Nabobs of Negitivism" are often wrong but never in doubt. Like a stopped clock. Every so often they are right but mostly they are wrong and mostly significantly wrong.

RB

OK, I guess 10-year BBB?

RB

Nice article,Doc! What do you use for corporate bond yields?

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