Seeking Alpha

Seeking Delta

 
View as an RSS Feed
View Seeking Delta's Comments BY TICKER:
Latest  |  Highest rated
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    I agree with both your points.
    Jan 4 10:29 AM | 1 Like Like |Link to Comment
  • ISM Manufacturing, Construction Spending: A Brief Recap [View article]
    New orders and inventories do show forward momentum. On rising prices, I expect these to contribute to margin compression as little, if any, of the higher input costs will be able to be pushed on the consumer.
    Jan 4 08:57 AM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    I see your point.

    I was coming from the angle that most people would say "hey, this Shiller guy is sure a bear" but using two different method to adjust for profit margins I actually get a lower (albeit not my much) forecast. My point was that while Shiller's forecast is pessimistic it could actually reasonably be worse.
    Jan 4 08:53 AM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    Thanks ST. I agree with a lot of your comments.

    Unfortunately, I think that we will be in for a bumpy ride over the next decade and barring above trend inflation not much of an increase in the nominal levels of the major domestic indices.
    Jan 3 10:52 PM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    I would be curious to know how you are getting to a 4% annual gain? I simply don't think you can bank on an expansion in the P/E multiple from current levels.
    Jan 3 09:48 PM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    I feel these longer-term forecasts are important and looking at the historical data is instructive. I would venture to guess that more money has been lost on the phrase "it's different this time" than gained.

    I guess we can disagree on the methods but agree on the conclusion.
    Jan 3 06:41 PM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    I can't argue that one can predict the future with certainty however I think these longer term forecast are important. Investment returns over the next decade are going to be very important for those close to retirement or already there.

    It's less about the specific forecast and more about that fact that via 3 different forecast methods equity returns over the next decade for a buy-and-hold investor are likely to disappoint.
    Jan 3 06:37 PM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    Thanks Whitehawk.
    Jan 3 06:32 PM | Likes Like |Link to Comment
  • Is the Stock Market Cheap? [View article]
    Thanks ST....and by the way, nice naming convention. I happened to be partial to that myself.
    Jan 3 06:28 PM | 1 Like Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    Via method #1 resulting in an EPS estimate of 73.8 I use the profit margin ratio of EPS / Sales. This method does not rely solely on domestic GDP growth and accounts for the international component. If we normalized profit margins to their post-2000 average of 6.8% (TTM average S&P 500 margins are 7.2%) then grow at 1.5% we get a lower forecast. The 85 2011 GAAP earning you reference are likely at margins even higher than 7.2%. I think this will normalize.
    Jan 3 05:53 PM | 1 Like Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    You are growing real earnings at 1.5% from peak profit margin levels....that is where I disagree with your analysis.

    I have no superior insight on 2% vs 3% inflation.
    Jan 3 05:26 PM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    My reticence is due to my uncertainty about inflation. Hussman, for example thinks we will see significant inflation in the back half of this decade. The market could go higher, yes in nominal terms if this happens. So if forced to price a call in nominal terms I would want hedge out the inflation. I simply used 2% inflation in order to compare with Shiller's forecast.

    I would be willing to bet the CAPE is closer to 15 than 23 in 2020 and real earnings grow at <1.5% annually.
    Jan 3 04:07 PM | Likes Like |Link to Comment
  • Robert Shiller's S&P 500 Forecast for 2020: Is He Overly Optimistic? [View article]
    In real terms sure......inflation is too big of a bogey to price in nominal terms.
    Jan 3 03:43 PM | Likes Like |Link to Comment
  • In investing, it's all about when you start and when you finish, according to these graphs. Example: After accounting for dividends, inflation, taxes and fees, $10,000 invested at the end of 1961 would have shrunk to $6,600 by 1981. But from the end of 1979 to 1999, $10,000 would have grown to $48,000.  [View news story]
    Not sure.
    Jan 3 03:26 PM | Likes Like |Link to Comment
  • In investing, it's all about when you start and when you finish, according to these graphs. Example: After accounting for dividends, inflation, taxes and fees, $10,000 invested at the end of 1961 would have shrunk to $6,600 by 1981. But from the end of 1979 to 1999, $10,000 would have grown to $48,000.  [View news story]
    Ed's writing is just as good. Some of the best analysis of the long-term market cycles I have ever read.

    Unexpected Returns was written in 2005 and Probable Outcomes is due out this month. I highly recommend either/both.
    Jan 3 03:11 PM | Likes Like |Link to Comment
COMMENTS STATS
115 Comments
136 Likes