That seems about right. Keep in mind, though, 72% probability is far from a sure thing. Just ask Hillary. 🙂
10 year forecasts are absurd by their very nature.
Here, take a look at this white paper from 2017, giving the firm's 7 year forecast. from GMO. All very well researched, well based in financial history, based on valuation..
in august 2017 (so a period ending right now), GMO officially forecast a 7 year return of -3.9% per year for US stocks after inflation.
Now we know the result: +14.55%/year nominal, so say 11% real.
THat's a rather astonishing 15% PER YEAR swing in returns .
And this is GMO, not some dude with a newsletter.
This is why I check forecasts. So I don't get scared by things like GS's rough forecast of stock returns. From all this work I can see that even the most researched and reasonable forecasts are meaningless
I agree with that last bit. The world is too complicated and dynamic to predict specific things into the future.
However, long-term predictions that rely on "human nature", I do find interesting. This is why I enjoy Flag's (and others') suggestions that the rich have power, and will use it to continue to benefit themselves. To translate that kind of thing to specific investment advice is the trick.
I have also found that the most accurate and precise predictions that I myself have made have turned out to be have been spot-on, except for a very few. Am I a genius? Absolutely not. In a cruel twist, it turns out that I have acted on NONE of those predictions to any great degree. The moment I do, I am certain that it will be incorrect!
I see that, and agree. If I was living in one of these countries, I would emigrate. My heritage is German and Irish, and came to this Country at a time of higher percentage of immigration. The difference is there was a system, or at least one that had a larger vision. That system created independence and supported the larger societal/cultural identity. Border-language-culture.
I spent a large part of my life teaching and coaching the children of recent immigrants. Always tools of the system. Seems more sinister today.
The full faith and credit of the United States is being questioned by the market. Drunkenmiller is reported to have a 20% short on Treasuries.
What treasuries? And what has he done with the boatload of 2-yr's he bought maybe a year ago?
Not sure. It was a comment, not delineated further, to my knowledge. Gundlach’s view is cuts to support poor economy and recession, later rising on back of upside down United States balance sheet. I don’t have a set view other than likely we won’t see a 1.35% Ten Year Treasury again in my lifetime.
Flagpole’s modus operandi of “follow along with what benefits the rich” is as good as any, depending on your position.
It’s good for the rich, but if you aren’t one of them, you won’t weather the storms as will they.
Flag believes himself rich because he and his wife have some public hack income and pensions, and “don’t need” the investments at any particular time. This perspective works as long as things don’t get too bad, which rarely happens.we
1) Most Americans, including you, would consider me rich if you knew my net worth, all attained from early and often investing (though I have inherited a total of $15,000 in my life, so there's that tiny, tiny amount I didn't earn).
2) I am retired. My wife is a college professor and still works.
3) We do not have pensions.
4) Not sure how or why you are so off here, but short of a nuclear war or a Dictator Donald Trump who decides to take the posessions of all Americans, there isn't a situation that would put me in bad straights financially. I have ZERO debt including a paid-for home. I have about 3.5 years of expenses saved LIQUID, at age 62 when my wife and I plan to take Social Security, that will give us north of $50,000 annually, but the biggest thing by far is my investment pile. The amount of money it has earned me in 2024 is unreal, insane. I've earned more in the last 12 months, hell, even the last 6 months, than the vast majority of people even retire with. I have more than enough. The market could drop 90%, and I'd be fine. It WON'T do that, but if it did, it would just be a matter of time before it would rebound, so it's easy to live on SS after age 62 and my cash reserves if I had to for 3-5 years while I wait for the market to recover (because it WOULD).
Flag, you're forcing me to agree with everyone else who says that you're a moron.
Not going to address anything except for the "rich" part.
I know actual rich people. Let me tell you one tiny thing about "rich":
I found out in a social gathering that when Gates got married on Lanai, he rented out the entire island. Immediately someone rather aloofly opined "Yes, but it's a small island." And after that, there is sovereign wealth.
YOU aren't even a flea on a dog's butt. Not only don't I consider you rich, I don't consider you at all! :^)
“YOU aren't even a flea on a dog's butt. Not only don't I consider you rich, I don't consider you at all! :^)”
I spent nearly half my working life in coaching world. There were always personalities where winning was never enough. These were people that had a poor sense of self. Never a higher sense of purpose. Their cheating and conniving was always “doing it for the kids.” You see the same mentality in the investment profession.
This post was edited 57 seconds after it was posted.
1) Most Americans, including you, would consider me rich if you knew my net worth, all attained from early and often investing (though I have inherited a total of $15,000 in my life, so there's that tiny, tiny amount I didn't earn).
2) I am retired. My wife is a college professor and still works.
3) We do not have pensions.
4) Not sure how or why you are so off here, but short of a nuclear war or a Dictator Donald Trump who decides to take the posessions of all Americans, there isn't a situation that would put me in bad straights financially. I have ZERO debt including a paid-for home. I have about 3.5 years of expenses saved LIQUID, at age 62 when my wife and I plan to take Social Security, that will give us north of $50,000 annually, but the biggest thing by far is my investment pile. The amount of money it has earned me in 2024 is unreal, insane. I've earned more in the last 12 months, hell, even the last 6 months, than the vast majority of people even retire with. I have more than enough. The market could drop 90%, and I'd be fine. It WON'T do that, but if it did, it would just be a matter of time before it would rebound, so it's easy to live on SS after age 62 and my cash reserves if I had to for 3-5 years while I wait for the market to recover (because it WOULD).
Flag, you're forcing me to agree with everyone else who says that you're a moron.
Not going to address anything except for the "rich" part.
I know actual rich people. Let me tell you one tiny thing about "rich":
I found out in a social gathering that when Gates got married on Lanai, he rented out the entire island. Immediately someone rather aloofly opined "Yes, but it's a small island." And after that, there is sovereign wealth.
YOU aren't even a flea on a dog's butt. Not only don't I consider you rich, I don't consider you at all! :^)
to be richer than 90% of Americans you need a net worth of around $2 million. I consider that rich. I suspect FP has that much but I don't know.
In particular it's rich because Flagpole lives in a not very expensive part of the country, and I believe he's said his wife is working by choice, not necessity. And he's a reasonable bloke so I suspect he's not bearing large debt loads.
The 'you aren't rich unless you can rent an island' talk is not necessary or accurate.
to be richer than 90% of Americans you need a net worth of around $2 million. I consider that rich. I suspect FP has that much but I don't know.
In particular it's rich because Flagpole lives in a not very expensive part of the country, and I believe he's said his wife is working by choice, not necessity. And he's a reasonable bloke so I suspect he's not bearing large debt loads.
The 'you aren't rich unless you can rent an island' talk is not necessary or accurate.
Yes, it is, because Flag arrogated to refer to my personal perspective on "rich".
its an interesting problem. why housing is so expensive.
..Seems to me at some level the market is saying 'it's not profitable for us to build housing so we won't do it.'
..
Maybe it's just a long memory of the housing crisis...homebuilders simply do not want to risk anything like that ever again. Still fighting the last war and not building more than they absolutely know they can sell.
A builder can only build so many homes a year. Why spend time on building smaller cheaper starter homes with less profit from the build? build a $250k home or a $500k house, $500k newbuild yields more profit to builder.
Flagpole’s modus operandi of “follow along with what benefits the rich” is as good as any, depending on your position.
It’s good for the rich, but if you aren’t one of them, you won’t weather the storms as will they.
Flag believes himself rich because he and his wife have some public hack income and pensions, and “don’t need” the investments at any particular time. This perspective works as long as things don’t get too bad, which rarely happens.we
1) Most Americans, including you, would consider me rich if you knew my net worth, all attained from early and often investing (though I have inherited a total of $15,000 in my life, so there's that tiny, tiny amount I didn't earn).
2) I am retired. My wife is a college professor and still works.
3) We do not have pensions.
4) Not sure how or why you are so off here, but short of a nuclear war or a Dictator Donald Trump who decides to take the posessions of all Americans, there isn't a situation that would put me in bad straights financially. I have ZERO debt including a paid-for home. I have about 3.5 years of expenses saved LIQUID, at age 62 when my wife and I plan to take Social Security, that will give us north of $50,000 annually, but the biggest thing by far is my investment pile. The amount of money it has earned me in 2024 is unreal, insane. I've earned more in the last 12 months, hell, even the last 6 months, than the vast majority of people even retire with. I have more than enough. The market could drop 90%, and I'd be fine. It WON'T do that, but if it did, it would just be a matter of time before it would rebound, so it's easy to live on SS after age 62 and my cash reserves if I had to for 3-5 years while I wait for the market to recover (because it WOULD).
Did you accumulate a fair amount of company stock early on from your employer as part of your compensation package at the time? Hearing your story, it would seem that you having done so is part of your background.
Glad to see GoI is telling people to invest in a country with a woman president!
Not all are callable.
ISIN US91086QAS75
A bond being callable isn’t necessarily a particularly risky thing, I think, at least if you bought at below face value. Then if they call it the distributions end but you’ll get a capital gain on pay out. Big fat yields like 9.9% should raise eyebrows, though. I’m assuming the coupon on that bond is well below 9.9% and a lot of the yield comes from price appreciation between purchase and maturity. The 6% one mentioned later had a coupon of 3.25 or 3.5% (don’t recall exactly) and a price of around $82 (same). I’ve seen so-called investment grade bonds for sale with BBB rating and fat yields, and when I dug a bit the companies were in danger of bankruptcy. Buyer beware… When I go shopping for bonds, after screening for a minimum yield, I look first to see the credit rating is adequate (don’t want the company going bankrupt and your bonds worth Pennie’s on the dollar), and then I try to find issues with price relatively close to face value. I prefer that most of the yield come from the coupon, which reduces, but doesn’t eliminate, some concerns. I am, however, no expert in these matters and will be happy to be schooled by somebody who knows better.
You are correct. Often there is a premium for early call, say 105, or $1,050 per bond. As Gente mentioned there is currency risk when purchasing international bonds, along with the credit risk you mentioned. As before, if considering, I would look to a fund where management expertise and trading offsets some of that risk.
This post was edited 3 minutes after it was posted.
its an interesting problem. why housing is so expensive.
..Seems to me at some level the market is saying 'it's not profitable for us to build housing so we won't do it.'
..
Maybe it's just a long memory of the housing crisis...homebuilders simply do not want to risk anything like that ever again. Still fighting the last war and not building more than they absolutely know they can sell.
A builder can only build so many homes a year. Why spend time on building smaller cheaper starter homes with less profit from the build? build a $250k home or a $500k house, $500k newbuild yields more profit to builder.
yeah maybe I really don't know.
although a functioning market would find ways to profit from all sectors of the housing market.
I think regulations have a lot to do with it, as well as shaky supply chains and lack of construction workers.
Of course, tariffs and deporting construction workers will make it even harder to build homes.
This post was edited 4 minutes after it was posted.
1) Most Americans, including you, would consider me rich if you knew my net worth, all attained from early and often investing (though I have inherited a total of $15,000 in my life, so there's that tiny, tiny amount I didn't earn).
2) I am retired. My wife is a college professor and still works.
3) We do not have pensions.
4) Not sure how or why you are so off here, but short of a nuclear war or a Dictator Donald Trump who decides to take the posessions of all Americans, there isn't a situation that would put me in bad straights financially. I have ZERO debt including a paid-for home. I have about 3.5 years of expenses saved LIQUID, at age 62 when my wife and I plan to take Social Security, that will give us north of $50,000 annually, but the biggest thing by far is my investment pile. The amount of money it has earned me in 2024 is unreal, insane. I've earned more in the last 12 months, hell, even the last 6 months, than the vast majority of people even retire with. I have more than enough. The market could drop 90%, and I'd be fine. It WON'T do that, but if it did, it would just be a matter of time before it would rebound, so it's easy to live on SS after age 62 and my cash reserves if I had to for 3-5 years while I wait for the market to recover (because it WOULD).
Flag, you're forcing me to agree with everyone else who says that you're a moron.
Not going to address anything except for the "rich" part.
I know actual rich people. Let me tell you one tiny thing about "rich":
I found out in a social gathering that when Gates got married on Lanai, he rented out the entire island. Immediately someone rather aloofly opined "Yes, but it's a small island." And after that, there is sovereign wealth.
YOU aren't even a flea on a dog's butt. Not only don't I consider you rich, I don't consider you at all! :^)
Flagpole is the only "rich guy" I know who continually proclaims he is rich. I know a lot of rich people and none ever talk about being rich. Warren Buffet never says he is rich. Bill gates never. Elon musk never. Methinks Flagpole is not rich but pretending to be rich.
What treasuries? And what has he done with the boatload of 2-yr's he bought maybe a year ago?
Not sure. It was a comment, not delineated further, to my knowledge. Gundlach’s view is cuts to support poor economy and recession, later rising on back of upside down United States balance sheet. I don’t have a set view other than likely we won’t see a 1.35% Ten Year Treasury again in my lifetime.
"I’ve thought a lot of things when I’m managing money with great, great conviction, and a lot of times I’m wrong. And when you’re betting the ranch and the circumstances change, you have to change, and that’s how I’m always managed money." Stanley Drunkenmiller
When Gundlach talks about stocks I tune out. When he talks about ABS I turn up the volume. Gundlach is the OG of ABS trading!
A bond being callable isn’t necessarily a particularly risky thing, I think, at least if you bought at below face value. Then if they call it the distributions end but you’ll get a capital gain on pay out. Big fat yields like 9.9% should raise eyebrows, though. I’m assuming the coupon on that bond is well below 9.9% and a lot of the yield comes from price appreciation between purchase and maturity. The 6% one mentioned later had a coupon of 3.25 or 3.5% (don’t recall exactly) and a price of around $82 (same). I’ve seen so-called investment grade bonds for sale with BBB rating and fat yields, and when I dug a bit the companies were in danger of bankruptcy. Buyer beware… When I go shopping for bonds, after screening for a minimum yield, I look first to see the credit rating is adequate (don’t want the company going bankrupt and your bonds worth Pennie’s on the dollar), and then I try to find issues with price relatively close to face value. I prefer that most of the yield come from the coupon, which reduces, but doesn’t eliminate, some concerns. I am, however, no expert in these matters and will be happy to be schooled by somebody who knows better.
IMHO, I believe a major consideration for Bond investors will be maturity selection. Understanding the Break-even Interest rate should help.
Graph and download economic data for (((((1+(Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis/100))^10)/((1+(Market Yield on U.S. Treasury Securities at 5-Year Constant Matu...
You can download the data into excel. The investor who has a 10 year time horizon has 2 choices (actually more than 2, but let's keep it simple) Buy a 10 YR Note now or buy a 5 YR Note now and roll into another when it matures. The BE Rate will give the market's current opinion where the 5 YR Rate will be 5 years from now. When I downloaded the data I compared BE Rate to the actual 5 YR Rate five years later. The results were interesting. From early 1953 until December 1979, buying a 5 YR Note and then rolling into a new one 5 years later worked almost every month (293/317). Starting in 1980 to March 2017, complete pattern change. Now buying the 10 YR Note was what worked (444/446 months). It now appears to be a shift back to the 1953-1979 regime which shouldn't be ignored.
Weniger works for Wisdom Tree, a company I like a lot.
Jeff Weniger @JeffWeniger I just made this chart a couple weeks ago and I keep thinking about it because it has some beautiful symmetry. If we are of the belief that we are at or near the end of the Fed's rate hiking cycle, it points to the 30-year Treasury commencing outperformance versus the S&P 500.
