Search found 4383 matches

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: 3981

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: 3981

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: 1520

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: 1520

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: 1520

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: 2451

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: 2451

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: 2451

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: 2451

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: 2451

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: 2451

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: 5904

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: 5904

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: 5904

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: 5904

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: 5904

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: 2160

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: 2880

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: 29704

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: 29704

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: 29704

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: 4095

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: 29704

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: 29704

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: 29704

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: 26
Views: 3085

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: 29704

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: 29704

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: 3454

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: 3454

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: 3454

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: 3454

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: 3454

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". ...
by grayfox
Mon Oct 24, 2016 10:13 am
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3454

Re: CAPE, SCHMAPE? WSJ piece raises questions

I was looking at how actual returns deviate from the return predicted by the simple E10/P model. As stated above, the usually unstated assumptions, i.e. implicit inputs, in the E10/P model are: 1. Earnings Growth will be about average 2. No change in Valuation So I created a model that has explicit ...
by grayfox
Mon Oct 24, 2016 9:38 am
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3454

Re: CAPE, SCHMAPE? WSJ piece raises questions

Note: I moved this from the other thread because it seems more on topic here. It looks to me like this simple E10/P forecast has some built-in assumptions that earnings growth will be average and valuations won't change. If actual earnings growth G deviates from the average, and/or valuations chang...
by grayfox
Sun Oct 23, 2016 9:10 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 29704

Re: Larry Swedroe's latest market returns forecast

The Schiller CAPE 10 (invented in 1988) has been absolutely terrible at forecasting returns almost immediately after its invention. In 1996, Schiller used his model to forecast 0% long-term real returns. Instead they have been 7%-8%. How many decades can a model fail before one begins to question t...
by grayfox
Sat Oct 22, 2016 1:34 pm
Forum: Investing - Theory, News & General
Topic: CAPE, SCHMAPE? WSJ piece raises questions
Replies: 38
Views: 3454

Re: CAPE, SCHMAPE? WSJ piece raises questions

I don't know about using P/E10 for market timing. But I find that P/E10 is quite useful for forecasting S&P 500 returns. :?: E.g., if you put $10,000 into S&P 500 yesterday, how much will you have in 10 years? I set up a spreadsheet with a simple cashflow model that uses IRR function to calc...
by grayfox
Wed Oct 19, 2016 7:54 pm
Forum: Investing - Theory, News & General
Topic: P/E Ratio and E/P Ratio
Replies: 47
Views: 3024

Re: P/E Ratio and E/P Ratio

Yes, what I meant to say was the Total Return would be expected to be 6.67% I was confused how Retained earnings were going to increase future earnings but I understand that part now. And yes, I can see how in an example with no price growth a return can be 10% in dividends Larry mentioned above th...
by grayfox
Wed Oct 19, 2016 6:44 pm
Forum: Investing - Theory, News & General
Topic: P/E Ratio and E/P Ratio
Replies: 47
Views: 3024

Re: P/E Ratio and E/P Ratio

Hypothetically speaking, if a stock has a P/E ratio of 15, the earnings yield is then 6.67%. Does this mean that the stock price is expected to increase at a rate of 6.67% ? I know that it doesn't happen this way in the short term. But since in the long term prices do follow earnings and the earnin...
by grayfox
Fri Oct 14, 2016 8:47 am
Forum: Personal Finance (Not Investing)
Topic: lump sum or 100%contingent annuity
Replies: 9
Views: 996

Re: lump sum or 100%contingent annuity

I will be collecting my work pension on 01/01/2017. The options I am considering are lump sum ($500,000) or 100% annuity ($2600 a month). No COLA. I am 65 my wife is 63. We are both in excellent health. I am leaning heavily towards the lifetime income. What factors should I consider when making thi...
by grayfox
Wed Oct 12, 2016 9:23 am
Forum: Investing - Help with Personal Investments
Topic: Montecarlo simulation for retirement savings rate, second post of a young investor
Replies: 42
Views: 2744

Re: Montecarlo simulation for retirement savings rate, second post of a young investor

Here are some numbers I was considering. Suppose you are age 27 and require inflation-adjusted $60,000 per year income for life. To make it simple, let's say for 80 years, until age 107. [All numbers in 2016 dollars.] If you had 0% real return (RR), to retire at age 27, you would need 80*$60,000 = $...
by grayfox
Wed Oct 12, 2016 9:03 am
Forum: Investing - Help with Personal Investments
Topic: Montecarlo simulation for retirement savings rate, second post of a young investor
Replies: 42
Views: 2744

Re: Montecarlo simulation for retirement savings rate, second post of a young investor

I invite your correction if I am wrong, but for instance, vanguard total stock, according to "Simba's backtesting spreadsheet" (available on bogleheads forum) is projected to have something like an average return of 10.3% total return, which adjusted for inflation becomes more like 7%. Su...
by grayfox
Tue Oct 11, 2016 11:02 am
Forum: Investing - Help with Personal Investments
Topic: Montecarlo simulation for retirement savings rate, second post of a young investor
Replies: 42
Views: 2744

Re: Montecarlo simulation for retirement savings rate, second post of a young investor

I don't know your income, but 36k/year into retirement savings seems better than average. Suggested retirement funding is 10-15% of annual income. The money you put into tax-advantaged accounts when your young is worth more than what you put in later because of the power of compounding over time. P...
by grayfox
Tue Oct 11, 2016 9:33 am
Forum: Investing - Help with Personal Investments
Topic: Montecarlo simulation for retirement savings rate, second post of a young investor
Replies: 42
Views: 2744

Re: Montecarlo simulation for retirement savings rate, second post of a young investor

I don't know your income, but 36k/year into retirement savings seems better than average. Suggested retirement funding is 10-15% of annual income. The money you put into tax-advantaged accounts when your young is worth more than what you put in later because of the power of compounding over time. P...
by grayfox
Mon Oct 10, 2016 10:08 am
Forum: Investing - Help with Personal Investments
Topic: A Retiree's Conundrum - Can you help?
Replies: 21
Views: 3736

Re: A Retiree's Conundrum - Can you help?

I would also mention that there are many variations on the Floor + Upside Theme. For example, instead of a full 30-year TIPS Ladder, one could have a ladder that only goes to age 75 or 80 (10 or 15 years), plus an inflation-indexed Deferred Income Annuity (DIA) that starts paying at the end of the T...
by grayfox
Mon Oct 10, 2016 9:33 am
Forum: Investing - Help with Personal Investments
Topic: A Retiree's Conundrum - Can you help?
Replies: 21
Views: 3736

Re: A Retiree's Conundrum - Can you help?

$4 million; ..... I can meet my expenses with social security + 1% from portfolio. ..... I probably (?) should increase my stocks if I want the portfolio to last 30 years. My conundrum is that I am a conservative investor, maybe too conservative. There is a school of thought that says, "Once y...
by grayfox
Sun Oct 09, 2016 5:12 am
Forum: Investing - Theory, News & General
Topic: Can You Rely on Dividends for Income?
Replies: 43
Views: 5596

Re: Can You Rely on Dividends for Income?

cjking's 30-year chart is very helpful and most relevant. In decided investment strategies, I did some research on dividend income with a standard buy-and-hold portfolio and came to the conclusion that as long as you have a highly diversified portfolio with low-withdrawal-expectations early in reti...
by grayfox
Sun Oct 09, 2016 4:45 am
Forum: Investing - Theory, News & General
Topic: Can You Rely on Dividends for Income?
Replies: 43
Views: 5596

Re: Can You Rely on Dividends for Income?

multpl has a chart for real dividend per share (click on "Chart"). This is what they show: https://monosnap.com/file/NbGkuYymEJO05d0bW7VXHuQmkE0Bha.png Not sure why it differs from yours, though. They show substantially more volatility, which is the opposite of what dividend investors say...
by grayfox
Mon Oct 03, 2016 1:46 am
Forum: Investing - Theory, News & General
Topic: Sustainable dividend yield
Replies: 10
Views: 1338

Re: Sustainable dividend yield

I am trying to find an estimate for the long-run dividend yield. In my quest for this I read Litterman's "Modern Investment Management - An Equilibrium Approach". In the book he argues that the equil. DY should be equal to the real earnings growth rate: "In fact, there is an equilibr...

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