Money and Finance
- Links
Peter Bernstein on risk (video) [H/T The Big Picture] (LINK) Related book: Against the Gods: The Remarkable Story of RiskSafal Niveshak: How to Be Happy and Get Rich (some lessons from a re-reading of Poor Charlie’s Almanack) (LINK) Nathaniel...
- Links
A large excerpt of the Boyles interview with Value Investor Confidential, minus the 3 stock ideas we discussed, on ValueWalk (LINK) Sanjay Bakshi: Reply to a Mail from a Friend on Valuation (LINK) A Dozen Things learned from Stanley Druckenmiller About...
- Hussman Weekly Market Comment: Margins, Multiples, And The Iron Law Of Valuation
Link to: Margins, Multiples, and the Iron Law of ValuationThe equity market remains valued at nearly double its historical norms on reliable measures of valuation (though numerous unreliablealternatives can be sought if one seeks comfort rather than reliability)....
- Graham And Dodd On The ‘relation Of The Future To Investment And Speculation’
“It may be said, with some approximation to the truth, that investment is grounded on the past whereas speculation looks primarily to the future. But this statement is far from complete. Both investment and speculation must meet the test of the future;...
- Hussman Weekly Market Comment: Cash And Credit - Implications For The Financial Markets
So what is the effect of creating an extra $600 billion dollars of monetary base by having the Fed purchase $600 billion dollars of Treasury debt? The same thing that happens anytime any security is issued. Somebody has to hold it, and the returns on...
Money and Finance
Hussman Weekly Market Comment: Eating the Future
Imagine there’s a $100 bill taped to the far corner of the room, near the ceiling and way above your head. You will receive that $100 bill ten years from today. Suppose that you reach your hand out directly in front of you and pay $46.31 today for that future $100. Assuming no credit risk, you have now bargained for an 8% annual return.
Now reach higher, about eye-level, and offer $67.56 for that future $100. You have now bargained for a 4% annual return.
Now reach far above your head, jump as high as you can, and offer $84.49 today for $100 ten years from today. You are now an investor in 10-year Treasury securities, which presently yield 1.7% annually.
Every security on Earth works like this. The higher the price you pay for a given set of expected future cash flows, the lower your prospective future rate of return. Higher prices essentially take from future prospective returns and add to past returns. Conversely, lower prices take from past returns and add to future prospective returns.
- Links
Peter Bernstein on risk (video) [H/T The Big Picture] (LINK) Related book: Against the Gods: The Remarkable Story of RiskSafal Niveshak: How to Be Happy and Get Rich (some lessons from a re-reading of Poor Charlie’s Almanack) (LINK) Nathaniel...
- Links
A large excerpt of the Boyles interview with Value Investor Confidential, minus the 3 stock ideas we discussed, on ValueWalk (LINK) Sanjay Bakshi: Reply to a Mail from a Friend on Valuation (LINK) A Dozen Things learned from Stanley Druckenmiller About...
- Hussman Weekly Market Comment: Margins, Multiples, And The Iron Law Of Valuation
Link to: Margins, Multiples, and the Iron Law of ValuationThe equity market remains valued at nearly double its historical norms on reliable measures of valuation (though numerous unreliablealternatives can be sought if one seeks comfort rather than reliability)....
- Graham And Dodd On The ‘relation Of The Future To Investment And Speculation’
“It may be said, with some approximation to the truth, that investment is grounded on the past whereas speculation looks primarily to the future. But this statement is far from complete. Both investment and speculation must meet the test of the future;...
- Hussman Weekly Market Comment: Cash And Credit - Implications For The Financial Markets
So what is the effect of creating an extra $600 billion dollars of monetary base by having the Fed purchase $600 billion dollars of Treasury debt? The same thing that happens anytime any security is issued. Somebody has to hold it, and the returns on...