The attached article, a staff memo from Sweden’s Riksbank attempts to reconcile lower interest influence on Shiller’s metric with CAPE 10 Excess Yield. Includes some of their methodology which might be of interest.
I won’t go to the bother of sharing my work, since the graphs and tables I share never get any traction in this group. Instead, I’ll just say that my own analysis of the data leads me to conclude that the relationships between CAPE 10, CAPE excess yield and 10-year forward returns are exercises in circular reasoning and overfitting. I claim this as someone with decent training and experience working with data, but alas without the accompanying Nobel prize, so take my view to be worth what you’ve paid for them… 🙂
CAPE is a historical metric. It has absolutely nothing to do with the future.
The future is unrelated to the past?
Of course the future is related to the past, but that is completely different than being predictable from the past. Time series CAPE data contain, to my way of thinking, almost zero useful information about future returns. Not precisely zero information, but for practical purposes none that can be used, reliably, in advance, to make money (or avoid losing money), at least so far as I can tell.
Of course the future is related to the past, but that is completely different than being predictable from the past. Time series CAPE data contain, to my way of thinking, almost zero useful information about future returns. Not precisely zero information, but for practical purposes none that can be used, reliably, in advance, to make money (or avoid losing money), at least so far as I can tell.
"CAPE is a historical metric. It has absolutely nothing to do with the future."
Of course the future is related to the past, but that is completely different than being predictable from the past. Time series CAPE data contain, to my way of thinking, almost zero useful information about future returns. Not precisely zero information, but for practical purposes none that can be used, reliably, in advance, to make money (or avoid losing money), at least so far as I can tell.
"CAPE is a historical metric. It has absolutely nothing to do with the future."
So you concede this statement is not correct?
If you want to be pedantic, the quoted statement is not entirely correct, but for practical purposes it is correct. I hope we can use nuance among friends.
The attached article, a staff memo from Sweden’s Riksbank attempts to reconcile lower interest influence on Shiller’s metric with CAPE 10 Excess Yield. Includes some of their methodology which might be of interest.
I won’t go to the bother of sharing my work, since the graphs and tables I share never get any traction in this group. Instead, I’ll just say that my own analysis of the data leads me to conclude that the relationships between CAPE 10, CAPE excess yield and 10-year forward returns are exercises in circular reasoning and overfitting. I claim this as someone with decent training and experience working with data, but alas without the accompanying Nobel prize, so take my view to be worth what you’veAs paid for them… 🙂
As long as you found it interesting, that was a point. There was once a politician that received the Nobel Peace Prize before doing one notable achievement, then once in office, promptly starts wars that kills tens of thousands. So consider your unrecognized work a greater event for humankind. :-)
"CAPE is a historical metric. It has absolutely nothing to do with the future."
So you concede this statement is not correct?
If you want to be pedantic, the quoted statement is not entirely correct, but for practical purposes it is correct. I hope we can use nuance among friends.
If you want to be pedantic, the quoted statement is not entirely correct, but for practical purposes it is correct. I hope we can use nuance among friends.
It's not correct, but it is. Got it.
It’s kinda like someone writing, “No more money for Maui. $700 is it. Period.” 😁
If you want to be pedantic, the quoted statement is not entirely correct, but for practical purposes it is correct. I hope we can use nuance among friends.
Sold $AAPL & now our largest single stock short. Believe 1) China (19% of rev) ban expanding to SOEs 2) Huawei resurgence 3) student loan repayment restart 4) CQ3 being 4th down y/y rev qtr in a row, will force investors to question 29x CY23 PE w/ no major AI play vs S&P at 21x.
Sold $AAPL & now our largest single stock short. Believe 1) China (19% of rev) ban expanding to SOEs 2) Huawei resurgence 3) student loan repayment restart 4) CQ3 being 4th down y/y rev qtr in a row, will force investors to question 29x CY23 PE w/ no major AI play vs S&P at 21x.
let's check Mr Niles history on Apple.
he shorted it publicly in 9/2021. At around $145.
It subsequently went as high as $198 and is now at $177.
Dan Niles has a long history, a semiconductor analyst during the Tech Bubble. I always viewed as balanced. Clearly new risks in an already extended Apple.
Sold $AAPL & now our largest single stock short. Believe 1) China (19% of rev) ban expanding to SOEs 2) Huawei resurgence 3) student loan repayment restart 4) CQ3 being 4th down y/y rev qtr in a row, will force investors to question 29x CY23 PE w/ no major AI play vs S&P at 21x.
let's check Mr Niles history on Apple.
he shorted it publicly in 9/2021. At around $145.
It subsequently went as high as $198 and is now at $177.
Since posting on buying $AAPL for a high probability trade on 8/18/23 going into IP15 launch, stock is +9% vs +3% S&P. Starting to sell position given Huawei’s breakthrough w/ their 7nm processor for new Mate60 Pro. Plan to be short $AAPL near IP15 launch.
