S&P 500 Fair Value at 1700
- Posted by ToddSullivan
- on April 1st, 2013
The Federal Reserve Bank of Dallas reported the 12mo Trimmed Mean Inflation Rate at 1.6%. One can see from the PCE Inflation Table below that the 12mo Trimmed Mean PCE appears to be in a slow downtrend but February’s gasoline rise caused a spike which is already being reversed as an artifact of the winter to spring blend change. The Dallas Fed comments:
“As regular readers of the Inflation Update know, our own rule-of-thumb forecast for headline PCE inflation over the coming 12 months is always the current 12-month trimmed mean rate. By that forecast, 12-month headline inflation—now 1.3 percent—should gradually rise toward 1.6 percent over the next 12 months.”
The effect on the “Prevailing Rate” used to calculate the SP500 Intrinsic Value Index is a slight decrease as the denominator rises. The SP500 ($SPY) Intrinsic Value Index now stands at $1,708 vs. last month’s $1,746.
The SP500 remains undervalued vs. the historical trend of the SP500 Intrinsic Value Index.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Todd's investing strategy is essentially long with the rare short. He seeks to buy undervalued issues with an upcoming catalyst that will help them realized.... More »
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