Forecasting The Market: A Thought Experiment Revisited [View article]
I like the idea "if you can test it, test it".
On that score, I have plotted PE versus 1 year returns on numerous occasions, and I cannot conclude other than, PE is of no use in predicting future returns. However, there may well be more sophisticated calculations which give better results.
The One Thing You Must Remember Before You Buy Another Stock [View article]
It may or may not be obvious, but I live in Australia. Right now, I am watching the ASX All Ords Index being propelled by BHP and RIO, up over 2.5% each. Yesterday it was the major banks.
Considering that we all expect a domestic and China economy downturn and a weakening AUD, this is a most unusual outcome. We do not have QE, so there is but one conclusion...The boom is on.
Federal Budget Continues To Improve [View article]
You will soon be saving zillions with the end of overseas wars don't forget, and getting increased taxes from oil and gas production within the US. I think someone in Government has it all figured out.
The One Thing You Must Remember Before You Buy Another Stock [View article]
Here is my two bobs worth of thoughts. The situation in 2007 was markedly worse than now. The money tap was an unsustainable flow of debt backed by mortgage borrowing on homes. The business practices in the finance sector were mildly shocking as we now know.
Nothing in 2007 was sustainable, but the situation was able to be hidden. The current situation, in my view, is a stabilisation exercise designed to overcome the problems of 2007. Without that stabilisation, things really would be bad.
Is it bad..no it isn't. Look at Europe today and compare that to 1945, 1956, 1980. I will take today any-time.
Dead right IT. These guys are complaining about the burden of looking after the Baby Boomers as they increasingly draw on welfare, and at the same time planning to wipe out their ability to look after themselves by diminishing their savings.
How to deal with this? I can't believe it, but borrowing to the max to buy houses seems one way...just exactly the same thing that started the crisis in the first place.
Positioning Yourself For Higher Valuations With Quality Improvers [View article]
From my incomplete perspective, this articles identifies a trend which has been a prime mover of the markets for the past month. Plenty yet to run I am sure.
The strategy is also a consistent source of alpha, just hard to identify because gathering the data is so time consuming.
Robert Shiller: Don't Invest In Housing [View article]
just to round off, I think inflation is very important in this equation. rent will always increase, and interest payments on a mortgage might vary, but generally decreases. My view, and from experience, life-cycle expenses favour the house buying route.
Lets face it, house maintenance is trivial compared to all other expenses required to bring up a family. That why it goes unrecorded.
Market Timing, Part I: Can It Be Done? [View article]
The idea that a monkey throwing darts can beat a fund is very believable, not because the fund is stupid, but because out of and index comprising say 2000 eligible stocks, 500 easily outperform the index. So the dart has a good chance of hitting winners.
i have never seen an attribution analysis of where things go wrong in timing systems. But take this last 6% move. If you missed it, then in the next investing period, you have to outperform by 6% just to breakeven. Given that you have just made a major mistake, how likely is it that you will outperform every other investor in the next period.
While past returns may not predict future returns better than 50/50, the odds of a person oscillating between bad and fantastic are nil.
Robert Shiller: Don't Invest In Housing [View article]
Renting at 30 with peak earnings in front of you is a vastly different prospect to renting at 70, after inflation has ravaged your savings. So there is no doubt that Shiller is wrong and you Cullen are right.
And of course for many, your home is a part of your persona while a rental property is not, so two strikes for home ownership.
If there was a lot of money, ie lots of liquidity, would it go into the market if investors were not bullish? Just because you have lots of money does not mean you are inclined to waste it.
It has to be bulls...and there is data to support the view that things are getting better for now. The other issue is that financial risk, for now, is decreasing, and with it the likelihood of a large and widespread drop in equities.
"As an aggregator of information, the market generates noise and a signal. We suspect the flare up in political tensions is noise". I think that is a great point for quant style investors to consider in general.
I am not advocating a wish list here, I am merely pointing out that high medical costs are an acknowledged drain on any economy, any visitor to the US must take additional insurance to cover against a medical event because that event may bankrupt him, and the reason for that is that medical charges in the US are out of proportion compared to the rest of the world.
But, instead of taking a Porshe off a doctor and giving a biscuit to a labourer, the opposite seems to be policy in the US, and there are economic consequences, which if the truth be known, are probably negative.
Exactly SP, why are medical costs ignored in economic discussions when in fact they are a huge drain on the community. it seems someone gladly pays medicos $10,000 for nothing, yet fights tooth and nail to avoid paying SS to someone who lost his job due to a Wall Street fraud for which he had no knowledge and no responsibility.
Forecasting The Market: A Thought Experiment Revisited [View article]
On that score, I have plotted PE versus 1 year returns on numerous occasions, and I cannot conclude other than, PE is of no use in predicting future returns. However, there may well be more sophisticated calculations which give better results.
The One Thing You Must Remember Before You Buy Another Stock [View article]
Considering that we all expect a domestic and China economy downturn and a weakening AUD, this is a most unusual outcome. We do not have QE, so there is but one conclusion...The boom is on.
How is that for making one think?
Federal Budget Continues To Improve [View article]
The One Thing You Must Remember Before You Buy Another Stock [View article]
Nothing in 2007 was sustainable, but the situation was able to be hidden. The current situation, in my view, is a stabilisation exercise designed to overcome the problems of 2007. Without that stabilisation, things really would be bad.
Is it bad..no it isn't. Look at Europe today and compare that to 1945, 1956, 1980. I will take today any-time.
Limits On The 500-Pound Gorilla [View article]
How to deal with this? I can't believe it, but borrowing to the max to buy houses seems one way...just exactly the same thing that started the crisis in the first place.
Is Now The Time To Buy Stocks? [View article]
Positioning Yourself For Higher Valuations With Quality Improvers [View article]
The strategy is also a consistent source of alpha, just hard to identify because gathering the data is so time consuming.
Robert Shiller: Don't Invest In Housing [View article]
Lets face it, house maintenance is trivial compared to all other expenses required to bring up a family. That why it goes unrecorded.
Market Timing, Part I: Can It Be Done? [View article]
i have never seen an attribution analysis of where things go wrong in timing systems. But take this last 6% move. If you missed it, then in the next investing period, you have to outperform by 6% just to breakeven. Given that you have just made a major mistake, how likely is it that you will outperform every other investor in the next period.
While past returns may not predict future returns better than 50/50, the odds of a person oscillating between bad and fantastic are nil.
Robert Shiller: Don't Invest In Housing [View article]
And of course for many, your home is a part of your persona while a rental property is not, so two strikes for home ownership.
Bulls Remain Determined [View article]
If there was a lot of money, ie lots of liquidity, would it go into the market if investors were not bullish? Just because you have lots of money does not mean you are inclined to waste it.
It has to be bulls...and there is data to support the view that things are getting better for now. The other issue is that financial risk, for now, is decreasing, and with it the likelihood of a large and widespread drop in equities.
Spain: No Mas [View article]
"As an aggregator of information, the market generates noise and a signal. We suspect the flare up in political tensions is noise". I think that is a great point for quant style investors to consider in general.
Spain: No Mas [View article]
is that palatable or palpable?
Starting The Month With A Bang [View article]
I am not advocating a wish list here, I am merely pointing out that high medical costs are an acknowledged drain on any economy, any visitor to the US must take additional insurance to cover against a medical event because that event may bankrupt him, and the reason for that is that medical charges in the US are out of proportion compared to the rest of the world.
But, instead of taking a Porshe off a doctor and giving a biscuit to a labourer, the opposite seems to be policy in the US, and there are economic consequences, which if the truth be known, are probably negative.
Starting The Month With A Bang [View article]
Its sort of insane really!