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Stock Market

Posted on October 07, 2008

FundamentalsWell, the panic has extended to the stock market. Its recentdescent has turned closer to vertical, but the reaction has notbeen irrational. As discussed in the last update on fundamentalson 9/23, the SP 500 Market Tracker had fallen to a value of 1025.At that time, the SP 500 was trading at a whopping 17% premiumto this measure of fair value. Then, investors were looking at80.0 annual earning power for the index vs. roughly 68.0 for the12 months through 9/08. With a suddenly deepening downturn,investors have lost confidence in the 80.0 number and have pushedits realization further ...

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earnings , inflation