Yardeni model

CFA Level II Equities
#1

Hi to everybody,

I really have difficult to get the logic behind this model. Anyone could give me an explanation?

Thanks.

#2

Yardeni sorry

#3

It’s derived from FED model which says stocks are undervalued if SPX yield is > on 10Y T-Bonds yield.

Yardeni went steps further by incorporating a corporate bond risk premium and uses a proxy for earnings growth (LTEG).

#4

Thanks Flashback.