Beauty is in the eye of the beholder.....so is value

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I got this interesting chart from EWI. He has been saying the Dow will go below 7,200before this bear market is over. How cheap is the US market? Price/Book basis has not entered screaming buy but bond yield/stock yield basis, you can find a lot of screaming buys. If you can find good cash generator businesses, with the bond yield(risk free rate) at record low, stocks look very compelling based on discounted cash flow model. I believe this is one of the reasons why Buffett pulling out his personal money out of bonds and buys stocks. This also lead me to believe risk free rate is going to stay low for a while. He has ben right about inflation/commodity boom about to peak out when he sold PetroChina and bought into Kraft last year.

While I have been setting bullish tone on stocks and the market seems to confirm this temporarily, you may ask me why my Turtle Portfolio has not been buying anything yet. The answer lies in money management, I will maintain strategy of holding at least 30-40% at any one time in case great buying opportunity shows up. This also implies that I believe the market is going be very volatile despite of good buying opportunity.