Commentary  Economists often say stocks are worth whatever people will pay for them. While true, this information isn’t very helpful. We already know what people will pay for stocks. Just look up current prices. What people really want to know is where stock prices are heading. While the price of stocks is correct at a single point in time, prices change as conditions change. There are so many things that affect the market from day-to-day, or even hour-to-hour, no one can tell you what all these things are, no less forecast their changes. However, some factors are fundamental to valuing stocks—earnings and interest rates. Understanding the longer-term trends in these two factors can provide useful information about the fundamental value of stocks. Comparing current prices to fundamental value can then help to determine the extent to which stocks are undervalued or overvalued. To estimate a stock market’s fundamental value, it …