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Matthew Crews

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  • Are S&P 500 Expectations Rational? [View article]
    Aka77,

    No problem and its freely available -- just Google:

    S&P 500 Earnings Spindices

    and you should find it as a xls download file.

    MC
    Feb 14 12:20 PM | Likes Like |Link to Comment
  • REITs: Leaning On Dividend Growth [View article]
    Real taxman,

    Thanks for asking but no -- I don't have insight into that. I'm not sure the cost to that information from folks like Green Street or maybe you can find something on the reit.com resource website for free. Otherwise you could pull a small comp sheet and put it together manually -- shouldn't take that much time and likely worth it.

    MC
    Feb 5 09:08 AM | Likes Like |Link to Comment
  • REITs: Leaning On Dividend Growth [View article]
    charliezap,

    Thanks for the reply and I don't disagree with your assessment based on what I have read. I'm also sure that I'm in the minority here but that's ok. My major concern is that I am trying to force a cube through a round hole. However -- technically there isn't anything wrong based on using Invested Capital based on actual market values. The problem is that I don't have the resources to value each & every property. And if that is the case then I don't think I am doing worse by leveraging assets on the books versus an operating income figure. It just means that MVA/ROIC picks up the property appreciation directly and indirectly via the operating income generated.

    SPG is a clean example but I'm sure as I build out a group of REITs using this method I will find less enticing examples that give another angle on the quality of a potential investment.

    Thanks -- well written comment!

    MC
    Feb 4 03:56 PM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    Nate,

    I tried to do that with the first two bullet points. The second bullet point not having panned out and the remainder of the analysis of reasons why and what is possibly expected.

    The conclusion was possibly not as concise and the "conclusion" sub heading got cut out so again maybe the note trailed off more than I had hoped.

    Thanks for the comments -- agree on the concept to simplify as much as possible.

    MC
    Jan 2 07:18 AM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    montana1001,

    Lots of thoughts there -- thanks. I think the scare asset theme and the q factor are tied together and I have looked at the ratio which seems to tie well with long-term market valuations whether its shiller or other metric such as p/s. I use a enterprise value and ROIC on an individual company basis which also ties well with Tobin's q.

    Do note that being/attempting to be pragmatic about the market doesn't presuppose I'm in or out the market. As I noted previously I was long the market despite little expected upside in 2012. This is largely to do with the fact that trends and momentum are used to help.

    As for trading around Central Bank activity seems not my cup of tea. Yes -- your points are taken but they are also short-term and still trying to goose an underlying system that might/might not take to the "goosing". Debt has been shifted from the private sector to the public sector which happens to be owned by the private sector. So what if upside today has been taken from gains from tomorrow -- I don't know what to say. If it (QE etc) works and private credit pickups, wages stabilize, etc then it will be all good. Inflation data suggests we are still challenged despite 4-5 years of very easy-to-aggressive monetary policy.

    Thanks again for the thoughts,

    MC
    Jan 2 07:15 AM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    Watermellon56,

    I think that it why in general those basic equations are used. Reverse engineer the expectations. If expectations don't seem realistic then one can have a greater conviction that the market is not being rational.

    And the gordon growth equation is just the basic from of a discounted cash flow valuation which can be applied to an individual stock or the market at large.

    As for predictions- as much as I want to know expectations -- predictions and timing will be confounded by trends. Interesting to note that over a fair amount of time earnings tend to trend upwards whereas market enthusiasm/pessimism can reallly alter valuations. So again predictions on fundamentals are helpful but psychology has its part.

    MC
    Jan 2 07:00 AM | 1 Like Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    convoluted,

    Great comment -- thanks. Generally speaking that's why I like the concept of volatility clustering. Volatility will typically remain in a range and then have a burst of high volatility then settle back down. These are the periods between stability and instability.

    MC
    Jan 2 06:54 AM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    hawkeyec,

    Thanks for the comment and thoughts. Then general concept of a limiter to growth is one that I think helps people stay rational. Extrapolation is easy to do and can lead to some crazy assumptions when put into real world terms.

    MC
    Jan 2 06:50 AM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    Dancing Diva,

    I am pretty sure of the numbers. As larryl9 states -- the 40wk and 200day are similar. The 200 day did dip mid-month which doesn't get captured in the 10-month.

    Rather 2013 has been significantly above trend.

    Thanks
    Jan 2 06:46 AM | 1 Like Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    MKW,

    First based on the timing of that post you are able to celebrate the New Year!

    Its a complex system of influences. I am not sure I see the inflation yet but I think we will know more whether this recent bump in economic activity can be sustained. Clearly stagflation is a challenge if inflation picks up but productivity doesn't follow suit.

    MC
    Jan 1 07:36 AM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    steve4466,

    Another note is that for most of 2013 the major domestic ETFs have been significantly above trend so even a mid-teen pullback would at times put you back to the intermediate averages such as the 10MMA (my preferred average.)

    As for the delta between reported and operating -- I don't have a preference outside of data availability. Are acquisition expenses one-time, are stock option expenses operating -- it just seems to get arbitrary. Bloomberg EPS might not include period pension expenses but S&P does. Again very difficult to tease that out and why reported EPS at least has some consistency that all firms must follow.

    MC
    Jan 1 07:30 AM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    New Superhuman,

    I agree -- its complex that an article like this won't nearly capture. But volatility tends to cluster between states and we are in a low vol state. A new "local attractor" likely won't be found until there is a shift in the landscape due to heightened vol etc etc (in my best attempt to recall my evolutionary biology days)

    MC
    Jan 1 07:26 AM | 1 Like Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    Pompano Frog,

    All I can say is please review Figure 2 and Figure 5. Clearly earnings oscillate and normalization is beneficial. This isn't dogma -- just common sense. What dogma I am hearing is about central banks.

    You don't agree with the data I presented -- that's fine. I appreciate the comments. And by all means you are free to relate how I've been wrong in the future as well -- if I don't beat you too it first :)

    As for making it on SA for 4 years -- you might consider other rationale for that.

    Thanks

    MC
    Dec 31 03:36 PM | Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    SeekingTruth,

    Thanks for the thoughtful comments. I didn't want to focus too much on reasons why momentum/trend has been strong but your right -- the market and earnings don't operate in a vacuum and the impact from politics will play its part.

    One thing that I periodically look at is the private credit creation which is being supported by QE3. If private credit doesn't begin to take off -- we will be in a tough spot economically speaking. And there is little additional debt that I think the public side can take to keep the stimulus up.

    Interesting times.

    MC
    Dec 31 11:52 AM | 1 Like Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    Pompano Frog,

    I tried to stay away from CAPE on this note but only referenced it based on the dataset. I don't disagree with the comments on the CAPE and have read most sides to the argument. I think its a mistake in general to throw it out in total as averaging earnings for a cycle still holds value for investors regardless of Shiller's work in particular.

    Again -- I'm trying to avoid right/wrong and just to look at the data. Since the mid-80s the capital/labor mix has shifted dramatically along with falling interest rates. One result is above average EPS growth -- above the long-term trend (and 1880s data to present does still hold for GDP/per capita). [That's why I put those charts in there.]

    It is therefore no surprise that since the early 1990s that the CAPE has been above its long-term average. However current profit margins aren't set in stone nor foreign earning surplus guaranteed. Earnings can flat line like they did in the 1960s to the 1980s. If that's the case then the narrative on the CAPE will change.

    MC
    Dec 31 11:44 AM | Likes Like |Link to Comment
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