Andrew Butter

Don't Believe Long-Term Oil Forecasts

Nice article.

The price of oil has got nothing to do with demand and there is no evidence (long term) that it does.

seekingalpha.com/artic...

What's the Fair Value for the Dow Jones Industrial Average?

You are absolutely correct.

By my calculation the "Other Than Market Value" (OMV) of the S&P 500 is between 1,300 and 1,500 now (I'm not talking "Fair Value" which is a word that means many different things to many different people).

That's base on a valuation using International Valuation standards (which unfortunately no one uses in USA, which could explain why they keep going around in circles).

Of course that doesn't mean that OMV will likely be achieved at any time in the future since the US markets are going through the inevitable bust that you get after a bubble (seekingalpha.com/artic...), but from this particular point it's unlikely that there will be a reversal of more than 20% and even if there is it will be "V:".

The big danger is long-term interest rates going up, which is hard not to believe since the nominal supply is so much more than the demand, although the government is trying to contain that inevitability (and keep it's interest payments down), by buying short term Treasuries, which looks unsustainable.