In the column titled, The Trader, the was an interesting paragraph regarding fair value for the S&P 500. Byron Wein is a well known Wall Street Guru and from the several times I've heard him interviewed he seems to be very reasonable and knowledgeable. The paragraph said that his model for valueing the S&P 500 puts fair value at 1350 which is quite a bit higher than it is now. He bases this valuation on an expectation of a 10% rise in profits for the S&P 500 in 2002. What's interesting to me is that if is model used an expectation of 7%, fair value for the S&P 500 is 1050. Ok there is quite a difference in relative terms but in my mind there isn't much difference in absolute terms. I guess the implication is that long term earnings growth rates must change a lot based on 10% vs 7% for next year. I guess it's easy to understand why the market has a lot of volatility.