http://radio.weblogs.com/0101212/Post.html Ouch

It's funny how this weblog so easy to use, but I can't get into it using the Radio Outliner, where I'm doing all of the rest of my editing.   10:37:45 PM    

Market Valuation

The market hasn't changed decisively in its valuation recently. Earnings have been coming in as expected. The P/E on the S&P500 has risen, but so has the 10 year treasury yield.

New Twist on Dow Dogs / Guru's latest strategy throws Treasuries into mix: "The first step is to find what O'Higgins calls the ``earnings yield'' of the 380-stock Standard & Poor's industrial index. This is calculated by dividing 1 by the index's price- earnings ratio for the latest 12 months. Next, you find the yield to maturity of the most recently issued T- bond expiring 10 years from now. You then add 0.3 to that figure and compare the total with the S&P earnings yield.

If the earnings yield is higher, stocks are relatively undervalued, O'Higgins figures. He suggests that you load up on stocks, using the Dogs of the Dow method. "

  8:01:21 AM