*                         9/4      9/11     9/18     9/25/23
S&P 500 Index             4515.77  4457.49  4450.32  4320.06
Trailing 12 month PE      24.34    23.97    23.87    23.14
Trail Earnings yield      4.11%    4.17%    4.19%    4.32%
Forward 12 month PE       21.00    20.68    20.58    19.91
Fwd Earnings Yield        4.76%    4.83%    4.86%    5.02%
90 day tbill yield        5.53     5.55     5.56     5.56
10 year tbond yield       4.18%    4.26%    4.33%    4.44%
Arezi Ratio               1.35     1.33     1.33     1.29
Fed Ratio                 0.88     0.88     0.89     0.88

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 56%
stocks, 44% cash this week.

Other timing indicators:
The S&P index is above its 200DMA. - Bullish
We are in the May-Oct part of the year. - Bearish
The trailing PE ratio of the S&P is above 17. - Bearish
The treasury yield curve is inverted. - Bearish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 26%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 71%.

Elan

Mechanical Investing FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.