Search found 4400 matches

by grayfox
Mon Feb 20, 2017 1:15 pm
Forum: Investing - Help with Personal Investments
Topic: Once having achieved 30X -- share your strategy?
Replies: 42
Views: 3897

Re: Once having achieved 30X -- share your strategy?

Thanks "grayfox" Okay. Light bulbs going on here. You have my attention. :shock: Why TIPS vs TIPS Funds? CD's as in ladder CD's? What is STRIPS? Is Short-Term investment grade funds (VFSUX) considered "floor income"? Is Intermediate Term Treasury Fund (VFIUX) considered "fl...
by grayfox
Mon Feb 20, 2017 12:22 pm
Forum: Investing - Help with Personal Investments
Topic: Once having achieved 30X -- share your strategy?
Replies: 42
Views: 3897

Re: Once having achieved 30X -- share your strategy?

What is your strategy now that you have "made your number, made the 30x, "won the game" (per swedroe, bernstein, etc)? 1 Levels vs. Flows. Number 1 is think in terms of income (flow) rather than balance (level). Level is an amount, like $1,000,000. Flow is a rate, like $6,000 per mon...
by grayfox
Sat Feb 18, 2017 1:10 pm
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS Auction Feb 16: real yield 1.1%?
Replies: 40
Views: 3907

Re: 30 yr TIPS Auction Feb 16: real yield 1.1%?

As far as I understand, the purchases at the 30-year TIPS auction will settle on 2-28-2017. But according to Vanguard, I am already ahead on the TIPS purchase. They list the current value for one bond at $989.86. Does that mean that the 2047 TIPS is already trading on the secondary market? The total...
by grayfox
Fri Feb 17, 2017 3:42 pm
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS Auction Feb 16: real yield 1.1%?
Replies: 40
Views: 3907

Re: 30 yr TIPS Auction Feb 16: real yield 1.1%?

I don't actually view TIPS as investing. It is simply to preserve the value of what you already have. As long as YTM is 0% or higher, It's like cash without inflation. If you have $10,000 and want to be able to buy $10,000 worth of stuff in 30 years, put it into TIPS. [OT comment removed by admin La...
by grayfox
Wed Feb 15, 2017 1:14 pm
Forum: Personal Finance (Not Investing)
Topic: Using PE10 to limit withdrawal rate
Replies: 8
Views: 847

Re: Using PE10 to limit withdrawal rate

I've been toying with the idea to use the retiree's current investment balance, the equities allocation percent, and also the current market's PE10 / CAPE, all to calculate a withdrawal rate. The idea is that if the market is in the "historically high" range, and you're heavy in equities,...
by grayfox
Wed Feb 15, 2017 12:57 pm
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS Auction Feb 16: real yield 1.1%?
Replies: 40
Views: 3907

Re: 30 yr TIPS Auction Feb 16: real yield 1.1%?

We have had very low inflation for a while 2016 1.26% 2015 0.12% 2014 1.62% 2013 1.47% 2012 2.07% 2011 3.16% 2010 1.64% 2009 -0.34% 2008 3.85% 2007 2.85% 2006 3.24% 2005 3.39% 2004 2.68% 2003 2.27% 2002 1.59% 2001 2.83% 2000 3.38% But it sounds to me that people in the know are expecting higher infl...
by grayfox
Wed Feb 15, 2017 12:49 pm
Forum: Investing - Theory, News & General
Topic: Valuation does not matter (may be)
Replies: 55
Views: 3642

Re: Valuation does not matter (may be)

I have to comment here because this looks like a huge misunderstanding. First he writes valuation changes : Over shorter time horizons, valuation changes start to dominate returns: Valuation Changes (40%) Dividends (25%) Inflation (21%) Earnings Growth (15%) So far so good. Then he pulls the old swi...
by grayfox
Sat Feb 04, 2017 2:56 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

What I find hilarious is how the option to buy an Inflation-Indexed SPIA just quietly disappeared. Did any retirement expert say if you were planning to buy one you better get it before they run out? There was no announcement by anyone that a deadline was coming up. Nope, just suddenly one day the q...
by grayfox
Fri Feb 03, 2017 5:48 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

I don't get why anyone likes TIPS. They guarantee you a 0% real return. That's only slightly better than a savings account. Granted, it's a guarantee, but it's a guarantee to never get ahead. Beyond 2023, they offer higher yield than 0%. See WSJ TIPS Jan-2025 0.350% Apr-2032 0.638% Feb-2044 1.019% ...
by grayfox
Fri Feb 03, 2017 5:37 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

Well i'm not sure. My "back up the truck" call was when 30 year tips were at like 2.125%. Now they are at 1%. I'm mostly sticking to my annual Tips purchase plan. But i am going to buy a bit extra to redeploy some funds that have been sitting in cds. Yes, I bought TIPS at that time with h...
by grayfox
Fri Feb 03, 2017 5:12 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

The downside is that it doesn't work :twisted: . Just do the math to see that. According to Schwab's annuity quote a $10,000 nominal annuity gets you $624 a year: 6.24%. grayfox says that a 3% increase (not even true CPI-U) costs an extra +42%. So to get $624 you need to pay $14,200: 4.3% So you sp...
by grayfox
Thu Feb 02, 2017 7:34 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

How much should you pay for each one? Age Fixed +3% Adjustment 60 $12,000.00 $12,000.00 61 $12,000.00 $12,360.00 62 $12,000.00 $12,730.80 63 $12,000.00 $13,112.72 64 $12,000.00 $13,506.10 65 $12,000.00 $13,911.28 66 $12,000.00 $14,328.62 67 $12,000.00 $14,758.48 68 $12,000.00 $15,201.23 69 $12,000....
by grayfox
Thu Feb 02, 2017 3:07 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

It seems to me that Insurers would price CPIU-Adjusted SPIA based on how much inflation they expect. The higher the expectation, the higher the price compared to a fixed annuity. E.g. 2% inflation expect, maybe +40% higher price, 3% inflation expected, maybe 50% higher price. Something like that, Bu...
by grayfox
Thu Feb 02, 2017 2:40 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

It's easy enough to do modest additional annuitizations every so often to combat inflation. In fact, that's what I'm planning myself for later this year, four years into retirement. ... The simplest solution is a CPIU-Adjusted SPIA. That is close to making one decision now and you are done. But if ...
by grayfox
Thu Feb 02, 2017 1:04 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

I am impressed that a 3% annual is only 40-some percent more than a fixed payout. What age did you use? Rule of 72 suggests that the payout doubles in 24 years. If you were 100% certain that inflation was going to be 3%, how would you price $1,000 p.m. + 3% Adjustment, compared to fixed $1,000 p.m....
by grayfox
Thu Feb 02, 2017 12:45 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

Re: No Inflation-Adjusted SPIAs at Vanguard

Why would you want an inflation adjusted SPIA ? Wouldn't a variable annuity that beats inflation be better :idea: ? We are talking about Income from annuities, are we not :?: ? So what is wrong with Vanguard's branded VA's? YMMV These discussion is only about Guaranteed Income, which would be used ...
by grayfox
Thu Feb 02, 2017 12:06 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5259

No Inflation-Adjusted SPIAs at Vanguard

:!: No Inflation-Adjusted Annuity at Vanguard! Vanguard has price quotes from 5 insurance companies: Company (Moody's, S&P, A.M. Best) Symmetry (A2, A, A) AIG (A2, A+, A) Mutual of Omaha (A1, AA-, A+) Lincoln Financial Group (A1, AA-, A+) Principle (A1, A+, A+) For Single-Life Only Annuity: 3 qu...
by grayfox
Mon Jan 09, 2017 1:56 pm
Forum: Investing - Theory, News & General
Topic: Over what time period should stocks NOT lose money
Replies: 50
Views: 4103

Re: Over what time period should stocks NOT lose money

https://s23.postimg.org/8pjm4w4zv/S_P500_Monte_Carlo_since_1871.jpg I saw that image bandied about on these forums a couple of months ago. Ostensibly, it is a Monte Carlo simulation of the S&P 500 since 1871. I confess I'm a little leery of it, since that particular index has not been around ne...
by grayfox
Sun Jan 08, 2017 11:05 pm
Forum: Investing - Theory, News & General
Topic: Over what time period should stocks NOT lose money
Replies: 50
Views: 4103

Re: Over what time period should stocks NOT lose money

Hello, While there are no certainties, bogleheads clearly believe that over time, staying invested is a prudent investment. Time is your friend. If forced to answer "over what time period will stocks NOT lose money....in real terms, what would you say?". If forced to give an answer on thi...
by grayfox
Thu Jan 05, 2017 9:54 pm
Forum: Investing - Theory, News & General
Topic: GDP vs Market Return
Replies: 32
Views: 1551

Re: GDP vs Market Return

The great virtue and great sin of the DDM is that it is one of the simplest models out there. It is a great model to introduce beginners with but worthless when it comes to the real world. You need a more sophisticated model and those models rely on earnings, not dividends. That's probably true, bu...
by grayfox
Thu Jan 05, 2017 9:41 pm
Forum: Investing - Theory, News & General
Topic: GDP vs Market Return
Replies: 32
Views: 1551

Re: GDP vs Market Return

What!?! You disagree with the Dividend discount model (DDM) . The DDM equation can also be understood to state simply that a stock's total return equals the sum of its income and capital gains. P = D / (r - g) is rearranged to give (D / P) + g = r Dividend Yield (D/P) plus Growth (g) equal Cost of E...
by grayfox
Thu Jan 05, 2017 8:39 pm
Forum: Investing - Theory, News & General
Topic: GDP vs Market Return
Replies: 32
Views: 1551

Re: GDP vs Market Return

Ok, this is another my newbie questions, but a search didn't give me many answers. The US GDP growth is about less than 3% per year, average of annual Total Market Index returns at least doubles that. So why is there such a big difference? Where did the extra market value come from? Easy to explain...
by grayfox
Thu Jan 05, 2017 7:46 pm
Forum: Investing - Theory, News & General
Topic: Skeptical of the hidden risk in Value - convince me
Replies: 37
Views: 2500

Re: Skeptical of the hidden risk in Value - convince me

It looks like Value has less variance than Growth AND has higher returns, no mater what the size. Which is why the options (a) and (d) in my second post are legitimately worth considering. I would go with a) Value outperforms not because it's more risky than growth but because it's less risky. That...
by grayfox
Thu Jan 05, 2017 7:24 pm
Forum: Investing - Theory, News & General
Topic: Skeptical of the hidden risk in Value - convince me
Replies: 37
Views: 2500

Re: Skeptical of the hidden risk in Value - convince me

You compared an index value fund vs. an actively-managed growth fund. I think the growth index fund you want is VMGIX. If you compare like vs. like, value is less volatile than growth for this example (with not that much history). https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timeP...
by grayfox
Thu Jan 05, 2017 4:29 pm
Forum: Investing - Theory, News & General
Topic: Skeptical of the hidden risk in Value - convince me
Replies: 37
Views: 2500

Re: Skeptical of the hidden risk in Value - convince me

Those Average ROEs are a simple average that ignores the vastly different equity in the 10 firms. That's gotta overweight the heck out of Home Depot. 6 giants are 34 feet tall and 1 giant is 116 feet tall. What's the average height? Is it (34+116)/2 ??? What if the six are called Apple and the one ...
by grayfox
Thu Jan 05, 2017 2:25 pm
Forum: Investing - Theory, News & General
Topic: Skeptical of the hidden risk in Value - convince me
Replies: 37
Views: 2500

Re: Skeptical of the hidden risk in Value - convince me

Assuming that you have thought about how much of premium investors might be willing to pay for stocks with higher Return-on-Equity ROE, what does that have to do with the price of eggs? Everything. So-called growth stocks have higher ROE than so-called Value stocks. If Company A and B, with ROE 10% ...
by grayfox
Thu Jan 05, 2017 12:49 pm
Forum: Investing - Theory, News & General
Topic: Skeptical of the hidden risk in Value - convince me
Replies: 37
Views: 2500

Re: Skeptical of the hidden risk in Value - convince me

:?: In other words, how much more should investors be willing to pay for a business with higher ROE? Here's my answer. :arrow: It depends on how long you are willing to wait to break even. If you pay P/B=1, your return will be ROE from the first year. If you pay a premium, i.e. P/B > 1, you start i...
by grayfox
Thu Jan 05, 2017 12:12 pm
Forum: Investing - Theory, News & General
Topic: Skeptical of the hidden risk in Value - convince me
Replies: 37
Views: 2500

Re: Skeptical of the hidden risk in Value - convince me

Suppose there were two businesses that you could invest in, A and B. ROE(A) = 10% and ROE(B) = 30%. Simplifying assumption: ROE's are constant forever. No risk. If you could buy each one at P/B=1, A would return 10% pa and B would return 30% pa. Obviously you would choose to invest in B. Now let the...
by grayfox
Wed Jan 04, 2017 11:50 am
Forum: Personal Finance (Not Investing)
Topic: Study on SWR rates for Early Retirement
Replies: 63
Views: 6036

Re: Study on SWR rates for Early Retirement

If you're looking at SWR for the very young, then you might look at "perpetual withdrawal rates" I found this paper by Otar to be very interesting: http://retirementoptimizer.com/Whitepapers/PerpDist.pdf For those looking at super-early retirement, I think it's worth thinking about this a...
by grayfox
Wed Jan 04, 2017 10:58 am
Forum: Personal Finance (Not Investing)
Topic: Study on SWR rates for Early Retirement
Replies: 63
Views: 6036

Re: Study on SWR rates for Early Retirement

Is it actually possible to buy a deferred inflation-adjusted annuity? For that matter, is it actually possible to buy any inflation adjusted annuity? There used to be three companies that sold immediate inflation adjusted annuities, but I can no longer find any. The closest I can find are some that...
by grayfox
Tue Jan 03, 2017 8:42 pm
Forum: Personal Finance (Not Investing)
Topic: Study on SWR rates for Early Retirement
Replies: 63
Views: 6036

Re: Study on SWR rates for Early Retirement

Unfortunately the funding ratio is based on funding retirement with a TIPS ladder which is going to be very tough with a 60 year horizon. Right, that is the problem with calculating Present Values. Which discount rate should be used? The spreadsheet uses a 1% discount rate, which is about the 30-ye...
by grayfox
Tue Jan 03, 2017 8:10 pm
Forum: Personal Finance (Not Investing)
Topic: Study on SWR rates for Early Retirement
Replies: 63
Views: 6036

Re: Study on SWR rates for Early Retirement

There was another thread about calculating the Funding Ratio FR = PV(Assets) / PV(Liabilities) Fully funded would have a Funding Ratio of 1.00. I believe this is what many Financial Economists would look at to determine if a Pension Plan has enough assets to meet its obligations. It would probably b...
by grayfox
Tue Jan 03, 2017 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Study on SWR rates for Early Retirement
Replies: 63
Views: 6036

Re: Study on SWR rates for Early Retirement

Suppose you are 40-year Male old living in California. You will retire immediately and expect to live to 100, a 60 year retirement. You need inflation-adjusted $1,000 per month, or $12,000 per year. How much will it cost to fund you retirement? Based on TIPS prices as of 7/29/2016, can buy a 30-Year...
by grayfox
Sun Jan 01, 2017 1:44 pm
Forum: Investing - Theory, News & General
Topic: A look at funds managed by the Vanguard Quantitative Equity Group (VUVLX, VSEQX, VSTCX, VMNFX, VMNVX, VASFX, VPGDX)
Replies: 19
Views: 2322

Re: A look at funds managed by the Vanguard Quantitative Equity Group (VUVLX, VSEQX, VSTCX, VMNFX, VMNVX, VASFX, VPGDX)

Vanguard Global Minimum Volatility (VMVFX, VMNVX) $3k min, $50k min investment; ER = 0.27%, 0.21% $1.6 billion AUM, 57% turnover Inception December 12, 2013 Managers Michael R. Roach, Binbin Guo, Anatoly Shtekhman Managed since inception by Vanguard, starting with Roach. Vanguard Global Minimum Vol...
by grayfox
Mon Nov 07, 2016 10:23 pm
Forum: Investing - Theory, News & General
Topic: House Price = 150 X Monthly Rent
Replies: 16
Views: 2957

Re: House Price = 150 X Monthly Rent

The great radio host Bruce Williams used to have a quick rule of thumb that monthly rent should be at least 1% of purchase price to be considered. E.g. if purchase price is $100,000, the rent income should be at least $1,000 per month. This was specifically for someone looking to buy a rental house ...
by grayfox
Sat Oct 29, 2016 12:55 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

That's what some others have asked for (error bars), but not what I really had in mind. Here is what I'm looking for. We can't come up with all possible situations, but let's come up with several: --The really bad outcome where the market ends up 50% lower 10 years from now --The case where there i...
by grayfox
Fri Oct 28, 2016 6:48 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

There are not enough data points for anyone to be able to say with certainty that the 10-year expected real returns has a 90% chance of being in between -2.6% and 4.8%. There's not even enough data points to be able to be 100% sure it's a normal distribution. I understand the PhDs want to quantify ...
by grayfox
Fri Oct 28, 2016 11:17 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

Have you seen https://www.researchaffiliates.com/en_us/asset-allocation.html Selecting Emerging Markets, for instance, will show why they estimate a 10-yr expected real return of 7.3% They also state by their model that there is a: 95% chance of 1.5% (or higher) 75% chance of 4.9% 50% chance of 7.3...
by grayfox
Fri Oct 28, 2016 10:57 am
Forum: Investing - Theory, News & General
Topic: Warren Buffett(himself) has never invested in an Index fund, WHY?
Replies: 32
Views: 4136

Re: Warren Buffett(himself) has never invested in an Index fund, WHY?

In his annual letter to shareholders, Warren Buffet uses the S&P500 as a benchmark. Berkshire's Performance vs the S&P 500 Compounded Annual Gain 1965-2015 S&P 500 with Dividends 9.7% Per-Share Book Value of BH 19.2% Per-Share Market Value of BH 20.8% He don't need no stinkin' S&P500...
by grayfox
Thu Oct 27, 2016 8:40 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

In 2010 E10/P annualized growth rate was about about 1.5% and dividend growth was about 1.15%. Now they're about 1.7% and 1.5% respectively. Go back to 1995 and E10/P growth was lower at about 1.3%, but dividend growth was about the same at about 1.2%. In this post, did you mean "In 2010 E10 a...
by grayfox
Thu Oct 27, 2016 8:22 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

Here is a comparison of the 'Swedroe' (1.1/CAPE) model (red line) with the regular 1/CAPE model (purple line) to the Forward-10 'actuals' model (orange line). Unsurprisingly, the Swedroe model basically hovers on top of the 1/CAPE model (by 10%). And the match with the actuals looks pretty poor. Ho...
by grayfox
Thu Oct 27, 2016 11:28 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

No, I don't believe the valuation "argument" has been resolved, nor will it ever be. I'm on the other side of the fence (with Homer and maybe a few others, but it is pretty sparse over here) in that I just can't embrace an approach that ignores so many real world variables and admits that...
by grayfox
Wed Oct 26, 2016 12:31 pm
Forum: Investing - Theory, News & General
Topic: Expected Returns Spreadsheet (DDM, 1/PE and more)
Replies: 27
Views: 3272

Re: Expected Returns Spreadsheet (DDM, 1/PE and more)

https://lh6.googleusercontent.com/-Rb4tKPDzcKg/VOItZjrpJ5I/AAAAAAAALM8/kq_1vGjnTLw/s1200/Expected%2520Returns%2520-%2520Chart.jpg If the orange line, S&P 500 Fwd-Rolling Actuals 10+, is intended to represent the actual 10-year real return annualized, it doesn't look right. I think that the retu...
by grayfox
Wed Oct 26, 2016 9:32 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

Yes, but why annual or annualized? (I'm questioning the choice of time period, not how it's calculated, although that's certainly an important matter.) Why not semi-annually, quarterly, monthly, daily, or bi-annually? A year is the traditional time period, but other than perhaps relevance to how ac...
by grayfox
Tue Oct 25, 2016 1:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 30387

Re: Larry Swedroe's latest market returns forecast

Also dividend payouts much lower now and have much more corporate buybacks so think 2% is reasonable estimate, <snip> Yeah, that's been my understanding as well, but it actually looks like real dividends (not dividend yield) have spiked in recent years, so this has me scratching my head a bit. Of c...
by grayfox
Tue Oct 25, 2016 12:27 pm
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3541

Re: CAPE, SCHMAPE? WSJ piece raises questions

In round numbers, call it -4% to +10% real return for likely range of growth and valuation. I wonder how much research and time and PhDs granted have been wasted determining a formula that tells us long-term real returns are likely to be in the -4% to 10% range? I took a class in Stocks and Bonds w...
by grayfox
Tue Oct 25, 2016 11:37 am
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3541

Re: CAPE, SCHMAPE? WSJ piece raises questions

Here is the output my E10/P based cashflow model results for the likely range of valuations and growth in earnings. P/E10(2026) 18.53 27.10 35.67 G.E10.10 (2016-2026) -2.63% -3.92 -0.62 1.90 -0.50% -1.82 1.56 4.13 +1.63% 0.41 3.78 6.36 +3.76% 2.38 5.91 8.59 +5.89% 4.49 8.08 10.82 P/E10 = Shiller Cap...
by grayfox
Tue Oct 25, 2016 10:49 am
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3541

Re: CAPE, SCHMAPE? WSJ piece raises questions

So can valuation 10-years out be predicted? The answer is obviously yes. Anyone can make a prediction about anything. But how accurate will the predictions be. In other words, how wide are the error bars? Maybe I can say that, with >99% confidence, in 10-years, PE10 will be in the range 5 to 50. Hig...
by grayfox
Mon Oct 24, 2016 11:19 am
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3541

Re: CAPE, SCHMAPE? WSJ piece raises questions

OK, I looked at how much PE10 has changed over 10-year periods. I got the Shiller PE Ratio by Year from multiple.com. Here are some stats: Change-in-Valuation over 10-years PE10 Delta-PE10 Percent-Change MIN 5.12 -25.40 -63.5% MEAN 16.81 +0.54 +17.9% MEDIAN 15.99 +0.58 +6.9% MAX 43.77 +26.72 +344.3%...
by grayfox
Mon Oct 24, 2016 10:20 am
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3541

Re: CAPE, SCHMAPE? WSJ piece raises questions

So the idea of Valuation not changing over 10 years is a "simplifying assumption" that doesn't really hold in the real world. This. It appears insane to me that anyone is making investing decisions based on an academic formula that starts off with this "simplifying assumption". ...

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