Search found 2853 matches

by SimpleGift
Thu Apr 19, 2018 9:47 am
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

The same graphic is available as a very neat interactive chart (and more of those) on gapminder.org Very cool interactive chart, thanks for the link. It really gives one a sense of the rapid momentum toward higher incomes in the emerging economies in just the last two decades. In 2000, only 26% of ...
by SimpleGift
Wed Apr 18, 2018 9:56 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

I don't need to look again. There's multiple DM charts and I don't see why you insist on looking at that one in isolation. You're cherry picking the DM data. Poster columbia was asking, to quote, "if there was a high correlation between GDP growth and market returns." The only DMS chart that compar...
by SimpleGift
Wed Apr 18, 2018 9:29 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

The aggregate GDP growth was only associated with higher returns, if the country had a fast growing population. Look again at the Dimson, Marsh & Staunton chart upthread. It compares aggregate equity returns with aggregate GDP growth, with a positive R^2 of 0.51. There's no mention or consideration...
by SimpleGift
Wed Apr 18, 2018 8:54 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

The relationship between gdp per capita and returns was negative. Yes, but why are you comparing per-capita GDP growth with aggregate equity returns? Why not use per-capita equity returns? This is a common mistake that has confounded this kind of research for years. Comparing aggregate values for b...
by SimpleGift
Wed Apr 18, 2018 8:06 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

Therefore, my concern is that people may be putting too much faith in declining consumption in the West being compensated by increasing consumption elsewhere. Finally found the data below, which shows the emerging markets' share of total world consumption (not just middle class consumption). It app...
by SimpleGift
Wed Apr 18, 2018 6:26 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

As an investor, these dynamics would only seem to matter if there were a high correlation between GDP growth and market returns. I don’t *think* that is the case. According to Dimson, Marsh & Staunton, in their global database of 21 countries from 1900-2013, the correlation between real total equit...
by SimpleGift
Wed Apr 18, 2018 5:04 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

The problem is that PPP is not really a good tool for comparing money in different locations. It will tend to overestimate the value of money in poor economies for the same reason why long-term inflation compensation for data from different times generally fails. One can certainly quibble with shor...
by SimpleGift
Wed Apr 18, 2018 4:33 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

The loss of people with disposable income in the $50/70k range, cannot be compensated by a tenfold number of people going from $500 to $5,000/yr. Those will still not buy cars priced as much as their income over their entire life, nor will they stay at a Hilton property, leave $20 tips, etc. This i...
by SimpleGift
Wed Apr 18, 2018 1:59 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

Re: The World in 2050 — An Emergent Middle Class

If interested in reading more on this topic, this research paper is the best that I've run across:

The Future of Worldwide Income Distribution
by SimpleGift
Wed Apr 18, 2018 12:37 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — An Emergent Middle Class
Replies: 35
Views: 3868

The World in 2050 — An Emergent Middle Class

This is the second (and last) post about the future, following: The World in 2050 — GDP & Stock Market Capitalization . In order to have earnings, companies need to have sales — and to have sales, companies need to have customers with sufficient income to purchase their products. This post includes ...
by SimpleGift
Tue Apr 17, 2018 11:23 pm
Forum: Investing - Theory, News & General
Topic: CAPE mean reversion: country specific or to the global average?
Replies: 23
Views: 1589

Re: CAPE mean reversion: country specific or to the global average?

My understanding is that people are not always willing to pay the same price for stocks; rather, there are moments of optimism when people believe there's going to be high growth, so they are willing to pay more and more, they get euphoric and then eventually there's disappointment and people pay l...
by SimpleGift
Tue Apr 17, 2018 5:03 pm
Forum: Investing - Theory, News & General
Topic: CAPE mean reversion: country specific or to the global average?
Replies: 23
Views: 1589

Re: CAPE mean reversion: country specific or to the global average?

As noted above, valuations are not reliably mean reverting . Amen. It's puzzling why folks would think that there's a golden mean value at which stocks are destined to trade. I'm not aware of any economic or financial theory that would support this idea. Clearly, from the historical record, folks a...
by SimpleGift
Tue Apr 17, 2018 4:43 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

^ Just to add a chart showing how emerging markets indexes can have huge bouts of outperformance relative to developed markets — despite massive share dilution — then languish in the doldrums for years. It's an investment like most other equities where one has to have a long time horizon, plus the p...
by SimpleGift
Tue Apr 17, 2018 1:10 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

My fear has always been the public stock market and its inability to capture global GDP growth. If all the capital is going into private hands or the very rich, the public stands to lose greatly in the growth of wealth. Thanks for the insight. Your fear is well-grounded in fast-growing emerging mar...
by SimpleGift
Tue Apr 17, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Exclude Emerging Markets
Replies: 30
Views: 3070

Re: Larry Swedroe: Don’t Exclude Emerging Markets

The purpose of the exercise is to determine the total emerging market revenue exposure of an All-World Stock Market Index, by using a weighted-average of all the regional indexes for which we have revenue data. There's nothing tricky about the math... I didn't say I thought the math was tricky. I u...
by SimpleGift
Tue Apr 17, 2018 11:20 am
Forum: Investing - Theory, News & General
Topic: Emerging Markets - Extending historical returns
Replies: 22
Views: 2924

Re: Emerging Markets - Extending historical returns

Trying to reach a conclusion on this... It seems to me that the Pros outweigh the Cons. Agree? Disagree? The question seems to be: Is increasing the coverage by an additional 10 years back to 1976 worth the less than perfect data? Reading a little about the history of the IFC index, it sounds to me...
by SimpleGift
Tue Apr 17, 2018 10:21 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Exclude Emerging Markets
Replies: 30
Views: 3070

Re: Larry Swedroe: Don’t Exclude Emerging Markets

The justification for indexing depends on a theorem in financial economics about the characteristics of the market portfolio (the set of all assets owned within a market), and it points to indexing by cap-weight within the market. It of course depends on all kinds of assumptions, but arguments for ...
by SimpleGift
Tue Apr 17, 2018 9:17 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Exclude Emerging Markets
Replies: 30
Views: 3070

Re: Larry Swedroe: Don’t Exclude Emerging Markets

...Viewed from this perspective, an All-World Stock Index has about a 25% exposure to emerging markets today. It is not obvious to me that adding up column (c) is a legitimate exercise. The purpose of the exercise is to determine the total emerging market revenue exposure of an All-World Stock Mark...
by SimpleGift
Tue Apr 17, 2018 1:10 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Exclude Emerging Markets
Replies: 30
Views: 3070

Re: Larry Swedroe: Don’t Exclude Emerging Markets

Vanguard, using a wider definition of emerging markets, says that Total World is 10.3% emerging markets. Country-of-domicile may increasingly be a misleading measure of emerging market exposure in an All-World Stock Index, especially in a era of expanding globalization. A more accurate gauge, in my...
by SimpleGift
Mon Apr 16, 2018 9:21 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

Implicit to your argument is that Chinese firms will sell to Chinese customers, Indian firms to Indian customers, etc. I'm not entirely convinced as to how much that will actually happen....Firms from developed nations might capture the majority of the 'new growth' in these markets or at least enou...
by SimpleGift
Mon Apr 16, 2018 8:48 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

We don't have to rely on forecasts of the next 30 year to get a sense of the future. We can also look back at the last thirty years and use our common sense about what is coming down the road. Since 1988, over 1 billion people worldwide have moved out of poverty (chart below). Yes, the vast majority...
by SimpleGift
Mon Apr 16, 2018 11:19 am
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

Then if investing by global market cap, I would invest in the country with the most public companies (US) but not necessarily in the countries which might have a better potential for growth going forward. An underappreciated point. An argument can be made that the global, cap-weighted index itself ...
by SimpleGift
Mon Apr 16, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 3704

Re: How accurately can we measure INFLATION?

One thing I have never understood. When inflation numbers are presented, they are usually presented with this caveat, "....these numbers strip out food and energy, because of their volatility", or something to that effect. My question is why strip out Food and Energy? My understanding is that it is...
by SimpleGift
Sun Apr 15, 2018 4:31 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

The US market has tracked GDP but very irregularly. The DJIA has increase 100x since 1930 while the real GDP has increased about 17x and nominal GDP has increased 162x from 1930 to 2017 ($0.105 trillion to $17.096 trillion). Yes, in fact in a PM this afternoon, a Forum member asked for more backgro...
by SimpleGift
Sun Apr 15, 2018 2:50 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

So you assume today's growth rates for emerging markets will persist (on average) for the next 30yrs? I think there are a lot of things that can derail a high growth rate as emerging economies "mature". No, most of the future GDP growth projections I've seen for emerging markets do not assume a lin...
by SimpleGift
Sun Apr 15, 2018 2:42 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

Re: The World in 2050 — GDP & Stock Market Capitalization

I'm befuddled. Didn't you just use a bunch of charts and rough data to make a conventional and simple BH argument? In the long run stocks go up, but it is a fool's errand to pick specific companies, so invest in the stock market as broadly as you can with index funds? You predict people will object...
by SimpleGift
Sun Apr 15, 2018 12:54 pm
Forum: Investing - Theory, News & General
Topic: The World in 2050 — GDP & Stock Market Capitalization
Replies: 64
Views: 4867

The World in 2050 — GDP & Stock Market Capitalization

It is far better to foresee, even without certainty, than not to foresee at all. ~ Henri Poincare, French scientist (1854-1912) We spend a great deal of time on the Forum looking backwards, analyzing the history of asset returns and financial data, so a couple of posts may be in order that glance t...
by SimpleGift
Sun Apr 15, 2018 10:21 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Underestimate Buyback Power
Replies: 12
Views: 2345

Re: Larry Swedroe: Don’t Underestimate Buyback Power

For the moment I am wondering how this fits in with Jack Bogle's way of estimating future returs (somewhat related to the Gordon equation) which goes: Future Market Returns = Dividend Yield + Earnings Growth per Share +/- Change in P/E Ratio Any ideas/comments welcome Just to point out that if one ...
by SimpleGift
Sun Apr 15, 2018 10:00 am
Forum: Investing - Theory, News & General
Topic: You, Too, Can Predict Stock Market Returns
Replies: 63
Views: 6872

Re: You, Too, Can Predict Stock Market Returns

I know this is an old thread but just wondering how this model takes buybacks into account (in the light of the most recent thread on Swedroe) Hi Lauretta, Yes, you've stumbled on an old thread from 6 years ago, discussing a paper that backtested the Gordon Equation, to see how well it would have p...
by SimpleGift
Sat Apr 14, 2018 4:21 pm
Forum: Investing - Theory, News & General
Topic: NAESX - is not really Small Cap?!
Replies: 36
Views: 2215

Re: NAESX - is not really Small Cap?!

RamblinDoc wrote:
Sat Apr 14, 2018 4:15 pm
I suspect you put VTMSX in your taxable account?
Yes. But even so, you may want to check out its long-term record. Even before taxes, it's been a fairly consistent outperformer in the small cap space over the last 15 years (versus its category average).
by SimpleGift
Sat Apr 14, 2018 4:05 pm
Forum: Investing - Theory, News & General
Topic: NAESX - is not really Small Cap?!
Replies: 36
Views: 2215

Re: NAESX - is not really Small Cap?!

Also, is there a better Vanguard fund that focuses on Small Cap blend if I want that tilt? You might check out Vanguard's Tax-managed Small Cap Fund (VTMSX). It's a true small cap fund, based on the S&P Small Cap 600 Index. The only drawback is that it's just offered in Admiral Shares now with a $1...
by SimpleGift
Sat Apr 14, 2018 2:17 pm
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

So, this is "fantasy football," in that someone has, somehow, tried to classify companies in 1850 according to categories that were not codified until 1999. Could be an issue post-1900 — but probably not much of one before 1900, when the researchers were dealing at most with several dozen bank, rai...
by SimpleGift
Sat Apr 14, 2018 1:56 pm
Forum: Investing - Theory, News & General
Topic: Unimpressive category averages of managed futures, multialternative, market neutral, etc.
Replies: 82
Views: 5129

Re: Unimpressive category averages of managed futures, multialternative, market neutral, etc.

It probably isn't too much of a mystery why the category-average returns of the four "alternative" asset classes examined by nisiprius in the OP have underperformed the more traditional stock & bond asset classes. A look at their category-average expense ratios (from Morningstar): Managed Futures St...
by SimpleGift
Fri Apr 13, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

After comparing that to the end of the chart, is there a convincing reason to consider any of the chart data as being visually accurate? Jalbert, you may want to take this up with the chart creators, Global Financial Data, who discuss the historical background of this chart and their industry secto...
by SimpleGift
Fri Apr 13, 2018 1:26 pm
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

It'd be interesting to compare the Shiller annual data vs. the Wilson-Jones data to see how large these differences are. Check this thread ... Thank you, siamond. You just saved me from going down the rabbit hole of comparing the Shiller data set with the Wilson-Jones series. It appears that you an...
by SimpleGift
Fri Apr 13, 2018 8:47 am
Forum: Investing - Theory, News & General
Topic: Emerging Markets - Extending historical returns
Replies: 22
Views: 2924

Re: Emerging Markets - Extending historical returns

Hi Simplegift - There are a number of them out there. One I've used quite a bit is https://apps.automeris.io/wpd/ And here's a site with a bunch of them compared http://connectedresearchers.com/graph-digitizer-comparison-16-ways-to-digitize-your-data/ Appreciate the links, decabler. I never knew su...
by SimpleGift
Fri Apr 13, 2018 12:08 am
Forum: Investing - Theory, News & General
Topic: Emerging Markets - Extending historical returns
Replies: 22
Views: 2924

Re: Emerging Markets - Extending historical returns

siamond wrote:
Thu Apr 12, 2018 11:04 pm
It turns out that some online tools are able to extract fairly precise data from such a graph.
Fascinating work, siamond. Can you expand on what these tools are and where they might be found online? Can they be used by the not particularly tech-savvy amateur? Thank you.
by SimpleGift
Thu Apr 12, 2018 11:33 pm
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

Reading this thread, plus several of the linked papers, my initial skepticism about the accuracy of the early U.S. stock index data has only grown. Which made me wonder: What early index data do Dimson, Marsh and Staunton (arguably the best global data series today, unfortunately commerical) use for...
by SimpleGift
Thu Apr 12, 2018 7:07 pm
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

It's a pity S&P didn't stick to only publishing an index with dividends included, it could have prevented so many people being misinformed about historical returns. Instead, today we have the endless running battle of people posting price charts of the S&P 500 and Dow to "prove" how bad stocks have...
by SimpleGift
Thu Apr 12, 2018 3:40 pm
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

P.S. I don't think "S&P 90" index is right, by the way. I've been trying to unscramble this story for some time but still don't quite have it. There was a "Standard & Poor's Composite Index" that was calculated daily, and at some point another one with several hundreds that was calculated weekly. I...
by SimpleGift
Thu Apr 12, 2018 1:23 pm
Forum: Investing - Theory, News & General
Topic: Questions about Benjamin Graham
Replies: 19
Views: 1610

Re: Questions about Benjamin Graham

So, Im reading the intelligent investor right now and I have a few questions. I am on Chapter 10 and overall the detail in the book is really good. However, I feel at times alot of the information in this book does not apply to me. Right. In reading Graham, one FIRST needs to heed his distinction a...
by SimpleGift
Thu Apr 12, 2018 12:59 pm
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

People often seem unaware of the original meaning of "bull" and "bear." It didn't mean "optimist" and "pessimist." Before the SEC, stock market manipulation was assumed . It was what the stock market was about. "Bulls" mean people who were trying to make stocks go up, "bears" meant people who were ...
by SimpleGift
Thu Apr 12, 2018 10:32 am
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Re: Two Centuries of U.S. Stock Market Indexes, 1802-2017

Markets are markets. Sure, it's relevant. A couple of concerns: • As I understand it, there was no such thing as "the U.S. stock market" prior to about 1900. There were just regional stock exchanges in the major cities around the country that traded a handful of regional stocks — which were nearly ...
by SimpleGift
Thu Apr 12, 2018 9:12 am
Forum: Investing - Theory, News & General
Topic: Two Centuries of U.S. Stock Market Indexes, 1802-2017
Replies: 47
Views: 3720

Two Centuries of U.S. Stock Market Indexes, 1802-2017

A fellow chart enthusiast recently sent me the graphic below, which was just published by Global Financial Data. It shows the historical breakdown of the U.S. stock market into 12 industry sectors over two centuries since 1800 — to which I've added the relevant U.S. stock market indexes at the top, ...
by SimpleGift
Wed Apr 11, 2018 11:29 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets tilt
Replies: 37
Views: 3095

Re: Emerging markets tilt

In a PM this evening, a Forum member asked what portion of U.S. companies' revenues today are from emerging markets — and I thought I'd also post the information that I have in this thread. As of the end of 2016, it looks like about 18% of MSCI USA Index companies' revenues came from emerging market...
by SimpleGift
Wed Apr 11, 2018 4:23 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets tilt
Replies: 37
Views: 3095

Re: Emerging markets tilt

Equities are split 60% U.S. and 40% international. International equities are one-half developed markets and one-half emerging markets, both with a modest small-cap tilt. I've had about the same international allocation for two decades, ever since Vanguard started their Emerging Markets Index Fund i...
by SimpleGift
Tue Apr 10, 2018 2:42 pm
Forum: Investing - Theory, News & General
Topic: The Slings and Arrows of Passive Fortune
Replies: 4
Views: 1195

Re: The Slings and Arrows of Passive Fortune

^ This is the best researched, most clearly argued 18 pages on the real facts about passive investing that I've seen. This write-up serves as a strong antidote to all the scare articles one sees in the financial press — and should be recommended in every future Forum thread about the "dangers" of pa...
by SimpleGift
Tue Apr 10, 2018 1:21 pm
Forum: Investing - Theory, News & General
Topic: How Often Do Stocks & Bonds Suffer Concurrent Losses?
Replies: 30
Views: 2450

Re: How Often Do Stocks & Bonds Suffer Concurrent Losses?

Which is to say, I would be interested to know if there are any two or three year periods where both have produced negative returns. Am I correct in reading this that '44-'47 would be the only one? We can smooth out the data a bit, and look at 3-year rolling averages of the stock and bond returns, ...
by SimpleGift
Tue Apr 10, 2018 11:57 am
Forum: Investing - Theory, News & General
Topic: How Often Do Stocks & Bonds Suffer Concurrent Losses?
Replies: 30
Views: 2450

Re: How Often Do Stocks & Bonds Suffer Concurrent Losses?

I would like to see if the relationship holds or is amelliorated for globally diversified stocks and bonds. Are there data sources available for that? The only freely-available global data series that I'm aware of go back to 1970 for global stocks and back to just 1985 for global bonds (both includ...
by SimpleGift
Tue Apr 10, 2018 9:27 am
Forum: Investing - Theory, News & General
Topic: How Often Do Stocks & Bonds Suffer Concurrent Losses?
Replies: 30
Views: 2450

Re: How Often Do Stocks & Bonds Suffer Concurrent Losses?

Would it be possible to compare against a larger bond universe than just 10-year Treasuries? You;re comparing 500 (non-government) stocks versus one (government) bond. Corporate bond funds pay higher rates than Treasuries and lack the "full faith and credit" guarantee, just like stocks. The only co...