There is no period since 1950 like the past fifteen years. We have experienced one of the best possible outcomes. The not so hidden tail risk may be the ringing out of excess.
I suppose that depends on how you mean "like." If we look at 15-year gains to today, the SP500 has increased 295% over 15 years. If I look back through the data back to 1950 making the same calculation for every trading day (back to 1965, which gives me 15 years of prior data), the 15-year change has been more than 295% over half the time (52.7%), which doesn't really square with "no period" very well.
Maybe you mean something different? If so, please elaborate.
Yes, tens of $Trillions in Fed liquidity/stimulus and Government transfer payments/stimulus. The resulting GDP increases less with each bout and now inflation. Is it Modern Monetary Theory? Perhaps Fed activism, and political neglect? Interesting how the bureaucrats have failed to take responsibility for the experiments’ laundry list of unintended consequences. It does seem like an era that reached the limits of rationality. If, that means anything at all.
This post was edited 12 minutes after it was posted.
There is no period since 1950 like the past fifteen years. We have experienced one of the best possible outcomes. The not so hidden tail risk may be the ringing out of excess.
I suppose that depends on how you mean "like." If we look at 15-year gains to today, the SP500 has increased 295% over 15 years. If I look back through the data back to 1950 making the same calculation for every trading day (back to 1965, which gives me 15 years of prior data), the 15-year change has been more than 295% over half the time (52.7%), which doesn't really square with "no period" very well.
Maybe you mean something different? If so, please elaborate.
If my math is right, S+P 500 has risen from 19.94 at end of 1928 to it's current 4,369.71. 4,369.71/19.94 = 219.14. Over @ 95 years, this is an annual increase of tad less than 1.0585% per year. Far less than what we have been told I think.
I suppose that depends on how you mean "like." If we look at 15-year gains to today, the SP500 has increased 295% over 15 years. If I look back through the data back to 1950 making the same calculation for every trading day (back to 1965, which gives me 15 years of prior data), the 15-year change has been more than 295% over half the time (52.7%), which doesn't really square with "no period" very well.
Maybe you mean something different? If so, please elaborate.
Yes, tens of $Trillions in Fed liquidity/stimulus and Government transfer payments/stimulus. The resulting GDP increases less with each bout and now inflation. Is it Modern Monetary Theory? Perhaps Fed activism, and political neglect? Interesting how the bureaucrats have failed to take responsibility for the experiments’ laundry list of unintended consequences. It does seem like an era that reached the limits of rationality. If, that means anything at all.
I suppose that depends on how you mean "like." If we look at 15-year gains to today, the SP500 has increased 295% over 15 years. If I look back through the data back to 1950 making the same calculation for every trading day (back to 1965, which gives me 15 years of prior data), the 15-year change has been more than 295% over half the time (52.7%), which doesn't really square with "no period" very well.
Maybe you mean something different? If so, please elaborate.
If my math is right, S+P 500 has risen from 19.94 at end of 1928 to it's current 4,369.71. 4,369.71/19.94 = 219.14. Over @ 95 years, this is an annual increase of tad less than 1.0585% per year. Far less than what we have been told I think.
Your math is wrong. Assuming you’ve done the division correctly and the market increased by 219.14 times, that is an increase of 21,814%. Rough average of 5.85% per year over 95 years. If I’ve done the math right, anyway.
I think you’ve done the math almost right but failed on the follow through. Annual multiple of 1.0585 per year is what I think you meant, which means 5.85% increase per year, on average. That is less than the 10% that gets bounced around, which is probably intended to include dividends but even so is too high for that 95 years.
“The US deficit has gotten so large that jump in 2008 barely makes a dent in this chart. In 2020 alone, the US deficit was nearly $5.5 TRILLION, roughly 315% of the deficit in 2008.
To put things in perspective, US government spending increased 14% over the last year while tax receipts declined 7%.
This year’s cumulative deficit is more than 200% the size of the YTD deficit last year, $887 billion above last year’s level.
What's the long-term plan here?”
-Kobeissi Letter
There is no long term plan. Patch the latest problem, hope for the best. Still remains the worst investing environment in my lifetime. The resulting chaos will be epic.
If my math is right, S+P 500 has risen from 19.94 at end of 1928 to it's current 4,369.71. 4,369.71/19.94 = 219.14. Over @ 95 years, this is an annual increase of tad less than 1.0585% per year. Far less than what we have been told I think.
Your math is wrong. Assuming you’ve done the division correctly and the market increased by 219.14 times, that is an increase of 21,814%. Rough average of 5.85% per year over 95 years. If I’ve done the math right, anyway.
I think you’ve done the math almost right but failed on the follow through. Annual multiple of 1.0585 per year is what I think you meant, which means 5.85% increase per year, on average. That is less than the 10% that gets bounced around, which is probably intended to include dividends but even so is too high for that 95 years.
Dividends contribute significantly to the stock market return.
From 1930–2022, dividend income's contribution to the total return of the S&P 500 Index averaged 41%.
Your math is wrong. Assuming you’ve done the division correctly and the market increased by 219.14 times, that is an increase of 21,814%. Rough average of 5.85% per year over 95 years. If I’ve done the math right, anyway.
I think you’ve done the math almost right but failed on the follow through. Annual multiple of 1.0585 per year is what I think you meant, which means 5.85% increase per year, on average. That is less than the 10% that gets bounced around, which is probably intended to include dividends but even so is too high for that 95 years.
Dividends contribute significantly to the stock market return.
From 1930–2022, dividend income's contribution to the total return of the S&P 500 Index averaged 41%.
Dividends can be important in a portfolio with big dividend payers, but there are an awful lot of listed companies that pay zero or very small dividends. Importantly, this includes some of the big companies driving the markets these days, including about half the companies listed on the NASDAQ.
Your math is wrong. Assuming you’ve done the division correctly and the market increased by 219.14 times, that is an increase of 21,814%. Rough average of 5.85% per year over 95 years. If I’ve done the math right, anyway.
I think you’ve done the math almost right but failed on the follow through. Annual multiple of 1.0585 per year is what I think you meant, which means 5.85% increase per year, on average. That is less than the 10% that gets bounced around, which is probably intended to include dividends but even so is too high for that 95 years.
Dividends contribute significantly to the stock market return.
From 1930–2022, dividend income's contribution to the total return of the S&P 500 Index averaged 41%.
The Standard & Poor's 500 Index (S&P 500) is a market-capitalization-weighted index of the 500 leading publicly traded companies in the U.S. While it assumed its present size (and name) in 1957, the S&P actually dates back to the 1920s, becoming a composite index tracking 90 stocks in 1926.1 The average annualized return since its inception in 1928 through Dec. 31, 2022, is 9.82%.2 The average annualized return since adopting 500 stocks into the index in 1957 through Dec. 31, 2022, is 10.15%.
The entire construct of S&P 500 returns in recent years has been some combination of below market interest rates, government stimulus, tax cuts, government transfer payments, and corporate bailouts. So assumptions base on modeling subsidized market returns would require one to extrapolate similar actions into the future without any negative consequences.
Igy, please learn how to correctly post Twitter links so that they are readily available to your devoted reader.
I am not saying “it is not me.” I hit the “copy link.” But this is a fairly recent occurrence. So likely LRC, X, or my older generation iPad. Yesterday I helped Timmy’s stock options by purchasing my wife a 9th generation 10.2 inch 65 gb iPad at Costco for $249, or $70 off. I will see if using her iPad makes a difference, if not I will just avoid doing it. My apologies.
Igy, please learn how to correctly post Twitter links so that they are readily available to your devoted reader.
I am not saying “it is not me.” I hit the “copy link.” But this is a fairly recent occurrence. So likely LRC, X, or my older generation iPad. Yesterday I helped Timmy’s stock options by purchasing my wife a 9th generation 10.2 inch 65 gb iPad at Costco for $249, or $70 off. I will see if using her iPad makes a difference, if not I will just avoid doing it. My apologies.
I think what works is just to copy the text of the tweet and not worry so much about the actual link. Or copy and paste both the link and the text.
Six months ago UBS said we were in an earnings recession that suggested an actual recession was coming. Yes, we have had an earnings recession, but we have also had fairly strong economic growth. Strange times, col 134,784.
I don't know why we have had earnings and econ growth go in opposite directions. Anyone know? A big tech issue? Falling earnings at Apple outweigh growth at say 400 smaller companies.
Carl Quintanilla @carlquintanilla UBS: Earnings downgrades are “following pre-recession path, not soft landing. S&P500 forward EPS has declined by nearly 6% since peaking in July 2022 .. been worse than the earnings cuts in every slowdowns/soft landing at this stage (since late 80s).”
6:52 PM · Feb 23, 2023 · 21K Views
UBS: Earnings downgrades are “following pre-recession path, not soft landing. S&P500 forward EPS has declined by nearly 6% since peaking in July 2022 .. been worse than the earnings cuts in every slowdowns/soft landing at this stage (since late 80s).” pic.twitter.com/zEjlP3IQO5
This is an interesting idea - that elevated13-week interest rates have signaled stock market tops in recent history. Too early to say if it will work this time, but so far it has. Stocks peaked this cycle right around when short term rates got above 5.1%. I'll put this back in my calendar for 3m in the future to see if it has held or if stocks power through this.
I like the simplicity of this measure. Just look at short term rates and ignore the rest.
Mike Shell @MikeWShell Do you see what I see? When short-dated U.S. treasuries are elevated, what's the market telling us?
7:17 PM · May 20, 2023 · 262.8K Views
Do you see what I see? When short-dated U.S. treasuries are elevated, what's the market telling us? pic.twitter.com/cyfixRqLKn
Six months ago UBS said we were in an earnings recession that suggested an actual recession was coming. Yes, we have had an earnings recession, but we have also had fairly strong economic growth. Strange times, col 134,784.
I don't know why we have had earnings and econ growth go in opposite directions. Anyone know? A big tech issue? Falling earnings at Apple outweigh growth at say 400 smaller companies.
Carl Quintanilla @carlquintanilla UBS: Earnings downgrades are “following pre-recession path, not soft landing. S&P500 forward EPS has declined by nearly 6% since peaking in July 2022 .. been worse than the earnings cuts in every slowdowns/soft landing at this stage (since late 80s).”
another take on this one is that it shows how dangerous it is to use today's information to invest. 6 months ago many probably sold, frightened by an earnings recession. Instead stocks have surged because they are looking so far in advance.
China is an interesting point here. The news on China is uniformally bad...but does that mean it's too late to trade on that news? I don't know. Probably.
I am not saying “it is not me.” I hit the “copy link.” But this is a fairly recent occurrence. So likely LRC, X, or my older generation iPad. Yesterday I helped Timmy’s stock options by purchasing my wife a 9th generation 10.2 inch 65 gb iPad at Costco for $249, or $70 off. I will see if using her iPad makes a difference, if not I will just avoid doing it. My apologies.
I think what works is just to copy the text of the tweet and not worry so much about the actual link. Or copy and paste both the link and the text.
The Fed's balance sheet hit its lowest level since July 2021 this week, down $820 billion from its peak in April 2022. Some perspective on how much the balance sheet expanded in 2020-21: it's still $4 trillion higher than where it ended 2019.
“In 2021, savings in the US totaled a record $2.1 trillion after $4 trillion in stimulus was handed out.
Starting in 2022, household savings have declined by $100 billion per MONTH on average.
Since 2021, a total of $1.9 trillion in savings have been depleted, leaving just $190 billion remaining.
It is forecasted that the remaining excess savings will be depleted this quarter. Americans are living off savings that will soon no longer exist. This is why debt levels are skyrocketing.”
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