Seems like right now the stock market is selling at firesale prices. But is it really? Buffett thinks so. Read this article on GNP vs Market Cap from FORTUNE:
"Buffett's buy signal"
The article supports the argument that market valuations are approaching historical lows, while still trading above the historical average valuation. However, the article fails to take into account the fact that interest rates are at historical lows, which theoretically should boost valuations. Therefore, it is definitely possible to make the argument that the market is selling LOWER then the historical average, when adjusted for interest rates.
SG
Saturday, February 7, 2009
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