Ghost of Igloi wrote:
Yalie wrote:
His analysis is correct. The CAPE formula uses 10 year average numbers. By definition, those are only available in hindsight.
No, it is not. Read about it.
Obviously I have read about it. I wonder, where do you think the 10 year average in the formula comes from...the future?
As the other fellows correctly said, this is a backwards looking metric. To say otherwise is to display one’s ignorance of such things.
You’re twisting as usual. The bottom line is when the market is down 50% you will be silent. Then dozens of writers will pontificate on why investors ignored CAPE, the Buffett Indicator, and other valuation metrics. Believe what you wish, it’s your money.
Ghost of Igloi wrote:
You’re twisting as usual. The bottom line is when the market is down 50% you will be silent. Then dozens of writers will pontificate on why investors ignored CAPE, the Buffett Indicator, and other valuation metrics. Believe what you wish, it’s your money.
I choose to believe the truth about the CAPE, which you prefer to distort to support your pessimistic narrative. Pessimism about the markets is acceptable, but not when you lie to support your position.
Yalie wrote:
Ghost of Igloi wrote:
The is an incorrect analysis of CAPE. Besides any valuation metric is not a timing tool. The Buffett Indicator also shows the market at extremes.
His analysis is correct. The CAPE formula uses 10 year average numbers. By definition, those are only available in hindsight.
And if it is not a timing tool, why are you using it to predict the next 10 years of market performance?
Correct.
FYI I’m becoming more and more convinced that the Igy chap is a troll.
Yalie wrote:
Ghost of Igloi wrote:
You’re twisting as usual. The bottom line is when the market is down 50% you will be silent. Then dozens of writers will pontificate on why investors ignored CAPE, the Buffett Indicator, and other valuation metrics. Believe what you wish, it’s your money.
I choose to believe the truth about the CAPE, which you prefer to distort to support your pessimistic narrative. Pessimism about the markets is acceptable, but not when you lie to support your position.
No you lie, the data is accumulated and predictive. You are foolish however, always believing in a Bullish narrative when the exact opposite is the truth. You like other posters here actually believe in magic. OK, ridiculously priced securities are worth buying? OK, go ahead.
Ghost of Igloi wrote:
Yalie wrote:
I choose to believe the truth about the CAPE, which you prefer to distort to support your pessimistic narrative. Pessimism about the markets is acceptable, but not when you lie to support your position.
No you lie, the data is accumulated and predictive. You are foolish however, always believing in a Bullish narrative when the exact opposite is the truth. You like other posters here actually believe in magic. OK, ridiculously priced securities are worth buying? OK, go ahead.
Classic projection.
Ghost of Igloi wrote:
please refer to Q4 2018.
My stock purchases in Q4 of 2018 have done very well.
Not many people talking about deflation or disinflation but the risk seems kinda real right now. Prices haven't budged and wages aren't increasing as much as economists thought. We've had turbo unemployment for over a year now, what gives?
It's almost as if giving tax breaks to large companies that hide their wealth offshore and use extra cash to only do stock buybacks doesn't stimulate price action and wages! Wow, who would have thought.
Racket wrote:
Not many people talking about deflation or disinflation but the risk seems kinda real right now. Prices haven't budged and wages aren't increasing as much as economists thought. We've had turbo unemployment for over a year now, what gives?
It's almost as if giving tax breaks to large companies that hide their wealth offshore and use extra cash to only do stock buybacks doesn't stimulate price action and wages! Wow, who would have thought.
look, it seems an old rule of economics is broken: higher economic activity apparently no longer results in inflation. Why? Probably technology - the economy is so much more competitive now and efficient....harder to raise prices when Amazon is out there and ever more efficiency can be wrung out of supply chains. I mean we haven't had inflation for a long, long time and prices only seem to be getting more stable.
Will we get deflation? Probably. but since apparently people are willing to pay governments to hold money for them (meaning negative interest rates on treasuries) I suppose we can afford some deflation. Although capitalism does depend on some inflation to grease the skids and encourage people to buy before prices rise.
But japan has been ok with deflation and shrinking populations.
The technology point is probably an accurate one but I'd argue that the Fed needs to figure out how to raise prices and get wages up and I doubt lowering interest rates is going to help with that. I'm not sure if I want to live in a Japan style economy that basically revs the engine at 8000 rpm just to go 5 miles per hour.
All eight indexes on our world watch list posted gains through July 29, 2019. The top performer is our own S&P 500 with a 20.36% gain and in second is France's CAC 40 with a gain of 19.44%. In third is China's Shanghai SSE with a gain of 19.30%. Coming in last is India's BSE SENSEX with a gain of 5.00%.
https://realinvestmentadvice.com/wp-content/uploads/2019/07/Crescat-Valuations-2-072919.pngJ. Hardy wrote:
Racket wrote:
A lot of those metrics are backwards looking or "well, this is how it's always worked" kind of metrics. We already had the first ever V recovery just 6 months ago so I think anything could happen. But 10 more years? Seems pretty aggressively bullish considering we're already in the longest expansion in history. I think deflation risks are real right now.
Agreed. Igy loves the CAPE, but it is backward looking as you said. Using that as your metric to predict 10 years of negative returns is just laughable.
Ghost of Igloi wrote:
https://www.zerohedge.com/s3/files/inline-images/hig%20valuations%20bear%20market.jpg?itok=fiyCSsSH
This chart conveniently leaves out the last 10 years when valuations were sometimes higher than they are now and there was no bear market in sight. There is no conclusion to be drawn from this chart. We can, however, draw certain unflattering conclusions about Zerohedge and GOI for offering up this disingenuous rabble.
??
J. Hardy wrote:
Ghost of Igloi wrote:
https://www.zerohedge.com/s3/files/inline-images/hig%20valuations%20bear%20market.jpg?itok=fiyCSsSHThis chart conveniently leaves out the last 10 years when valuations were sometimes higher than they are now and there was no bear market in sight. There is no conclusion to be drawn from this chart. We can, however, draw certain unflattering conclusions about Zerohedge and GOI for offering up this disingenuous rabble.
Bring that up to Guggenheim Investments....look on the chart Hardy bro.
https://www.zerohedge.com/s3/files/inline-images/ex%205%20MS.jpg?itok=WIGxFFDYEarnie wrote:
Earnings Scorecard: For Q2 2019 (with 44% of the companies in the S&P 500 reporting actual results), 77% of S&P 500 companies have reported a positive EPS surprise and 61% of companies have reported a positive revenue surprise.