UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: elann Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 252745  
Subject: Arezi Ratio for Nov. 16 Date: 11/15/2007 7:42 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 28

* 10/26 11/2 11/9 11/16/07
Trailing 12 month PE 17.9 17.91 18.65 18.41
Trail Earnings yield 5.59% 5.58% 5.36% 5.43%
Forward 12 month PE 16.64 16.56 16.28 16.01
Fwd Earnings Yield 6.01% 6.04% 6.14% 6.24%
90 day tbill yield 3.94 3.81 3.38 3.30
10 year tbond yield 4.37 4.36 4.28 4.17
Arezi Ratio 0.71 0.68 0.63 0.61
Fed Ratio 0.73 0.72 0.70 0.67


The Arezi Ratio is the 90 day tbill yield divided by the trailing
earnings yield of the S&P500. A low ratio means that stocks are undervalued.

The "Fed Ratio" is the 10 year treasury bond yield divided by the
forward estimated operating earnings yield of the S&P500. A low ratio
means that stocks are undervalued. Thus, a ratio of 0.71 for example
means, according to Yardeni, that stocks are cheaper than "fair value"
by 29%.

The 'S=120-50*Arezi Ratio' formula indicates an allocation of 90%
stocks, 10% cash this week.


Other timing indicators:
The S&P index is below its 200DMA. - Bearish
We are in the Nov.-Apr. part of the year. - Bullish
The trailing PE ratio of the S&P above 17. - Bearish
The treasury yield curve is normal (not inverted). - Bullish

For my own allocation I start with the Arezi formula and subtract 10%
for each bearish indicator. My current target allocation is 70%.

Elan
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Post of the Day:
Apple

Apple and Ninety Years Ago
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement