*                         12/8     12/15    12/22    12/29/25
S&P 500 Index             6870.40  6827.41  6834.50  6929.94
Trailing 12 month PE      28.62    28.38    28.45    28.78
Trail Earnings yield      3.49%    3.52%    3.51%    3.47%
Forward 12 month PE       24.47    24.24    24.07    24.32
Fwd Earnings Yield        4.09%    4.12%    4.16%    4.11%
90 day tbill yield        3.71     3.63     3.62     3.64
10 year tbond yield       4.14%    4.19%    4.16%    4.14%
Arezi Ratio               1.11     1.06     1.03     1.05
Fed Ratio                 1.01     1.02     1.00     1.01

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 68%
stocks, 32% cash this week.

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

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 58%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 89%.

Elan

Mechanical Investing FAQ

---

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