Money and Finance
Link to: Low and Expanding Risk Premiums are the Root of Abrupt Market Losses
- Links
The “Enemies” of Warren Buffett [H/T @Sanjay__Bakshi] (LINK) Two Mental Models (and 24 Things): Network Effects and Critical Mass - by Tren Griffin (LINK) Utility Investor With Ties to Buffett Joins World's 400 Richest [H/T Linc] (LINK)...
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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...
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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...
- Links
Q&A with Guy Spier about his book, The Education of a Value Investor (LINK) Buffett’s Private Analysis of Geico in 1976: ‘Extraordinary’ But ‘Mismanaged’ [H/T Lincoln] (LINK) Aswath Damodaran on corporate break-ups, using EBay and PayPal...
- Hussman Weekly Market Comment: It Is Informed Optimism To Wait For The Rain
Link to: It Is Informed Optimism To Wait For The RainBased on valuation metrics that have demonstrated a near-90% correlation with subsequent 10-year S&P 500 total returns, not only historically but also in recent decades, we estimate that U.S. equities...
Money and Finance
Hussman Weekly Market Comment: Low and Expanding Risk Premiums are the Root of Abrupt Market Losses
Link to: Low and Expanding Risk Premiums are the Root of Abrupt Market Losses
Through the recurrent bubbles and collapses of recent decades, I’ve often discussed what I call the Iron Law of Finance: Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time.The past several years of quantitative easing and zero interest rate policy have not bent that Iron Law at all. As prices have advanced, prospective future returns have declined, and the “risk premiums” priced into risky securities have become compressed. Based on the valuation measures most strongly correlated with actual subsequent total returns (and those correlations are near or above 90%), we continue to estimate that the S&P 500 will achieve zero or negative nominal total returns over horizons of 8 years or less, and only about 2% annually over the coming decade.
- Links
The “Enemies” of Warren Buffett [H/T @Sanjay__Bakshi] (LINK) Two Mental Models (and 24 Things): Network Effects and Critical Mass - by Tren Griffin (LINK) Utility Investor With Ties to Buffett Joins World's 400 Richest [H/T Linc] (LINK)...
- 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...
- Links
Q&A with Guy Spier about his book, The Education of a Value Investor (LINK) Buffett’s Private Analysis of Geico in 1976: ‘Extraordinary’ But ‘Mismanaged’ [H/T Lincoln] (LINK) Aswath Damodaran on corporate break-ups, using EBay and PayPal...
- Hussman Weekly Market Comment: It Is Informed Optimism To Wait For The Rain
Link to: It Is Informed Optimism To Wait For The RainBased on valuation metrics that have demonstrated a near-90% correlation with subsequent 10-year S&P 500 total returns, not only historically but also in recent decades, we estimate that U.S. equities...