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« The Two Biggest Mistakes of the Individual Investor | Main | Bearish Analyst Sentiment »

February 02, 2007


Bill a.k.a. NO DooDahs!

RB, housing has not been "the economy." Housing has been a larger portion of G-D-P, which is not the same thing as "the economy."

Also, it pays to be reminded that the S&P is not "the market" but merely a large-cap mutual fund that is often used as a proxy for the market. For the same reason the S&P 500 "took off" as they overweighted tech stocks in the 90's, it is possible that an increased weighting of homebuilders in the index caused the effect your reference points to.


Also, some of the arguments against the Fed model are similar to the arguments against this chart:

What would you say to the idea that the period after 1996 is different because housing has been the economy for much of the last ten years?


You are probably right and the Fed model would also seem to imply that interest rates might go up over the next several years for many of those bearish reasons of long-term PE mean-reversion. What would you say to the idea that the tight correlation is because of a low perception of risk in stocks?

Bill a.k.a. NO DooDahs!

I've got my money on 15-17% for the S&P 500 with my personal portfolio target being 26.6%.

Here's the link to my 15-17%.

For the TickerSense blogger outlook, notice my stock pick for 2007.

In case you don't want to click the link, I said "It's a bull market. Buy something."

You can also see I was the most bullish of the bloggers, by far.

Enough talk! The sun is shining, it's time to make some hay!

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