Friday, March 16, 2007

Ken Fisher: Bull Market Not Over

If you're getting nervous about a coming bear market. Stop worrying. Ken Fisher, the most accurate market forecaster in the world according to an independent study done by the CXO Advisory, says, "Four and a half years and still going strong. The bull market that began in late 2002 is far from over." He reasons that:

The driver is the relationship between earnings yield (the inverse of a price/earnings ratio) and bond yields. When earnings yields are bigger than bond yields, institutional investors can make a profit by using borrowed money to acquire shares of stock. The process can continue for years, until equity prices are bid higher or the cost of money gets higher.

Here's the full article from Forbes (available after free registration).

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