Buffett interview Monday 2/27

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bzargarcia
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Buffett interview Monday 2/27

Post by bzargarcia » Sun Feb 26, 2017 3:23 pm

Warren Buffett will be interviewed Monday 2/27 on CNBC's Squawk Box. These are usually very long interviews that last a significant portion of the entire broadcast. They are also requesting questions being sent in using #AskWarren hashtag.

I would expect them to get into his comments about John Bogle...hopefully. Maybe someone can get the answer to the S&P500 vs. Total Stock :happy

http://www.cnbc.com/2017/02/24/askwarre ... rview.html

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Re: Buffett interview Monday 2/27

Post by knpstr » Sun Feb 26, 2017 3:50 pm

Post your questions to Facebook or Twitter using #AskWarren

I don't have Facebook or Twitter :annoyed
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Re: Buffett interview Monday 2/27

Post by jhfenton » Sun Feb 26, 2017 4:25 pm

knpstr wrote:Post your questions to Facebook or Twitter using #AskWarren

I don't have Facebook or Twitter :annoyed
I'm sure one of us can loan you a Twitter if you want to ask a question. :beer

Or you can create a dummy Twitter account just for the purpose. They need not be personal like Facebook.

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Re: Buffett interview Monday 2/27

Post by triceratop » Sun Feb 26, 2017 7:26 pm

jhfenton wrote:
knpstr wrote:Post your questions to Facebook or Twitter using #AskWarren

I don't have Facebook or Twitter :annoyed
I'm sure one of us can loan you a Twitter if you want to ask a question. :beer

Or you can create a dummy Twitter account just for the purpose. They need not be personal like Facebook.
I see a dummy account already asked the most interesting questions :)

I doubt they'll be chosen, though.
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stemikger
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Re: Buffett interview Monday 2/27

Post by stemikger » Sun Feb 26, 2017 8:10 pm

Thanks for the Info.

I just submitted a question via Facebook. There are numerous questions about his index fund recommendations. I asked why he doesn't think it is a good idea to hold a portion in bonds to protect yourself from bad markets and behavioral mistakes.
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Re: Buffett interview Monday 2/27

Post by Paul K » Mon Feb 27, 2017 1:14 am

Are these interviews usually posted somewhere afterwards? Preferably the whole thing, not just the highlight reel.

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Re: Buffett interview Monday 2/27

Post by triceratop » Mon Feb 27, 2017 1:44 am

stemikger wrote:Thanks for the Info.

I just submitted a question via Facebook. There are numerous questions about his index fund recommendations. I asked why he doesn't think it is a good idea to hold a portion in bonds to protect yourself from bad markets and behavioral mistakes.
Has he said this somewhere for the general investor? Many people I see who attribute this to Buffett are referring to his statements that he will recommend a 90/10 S&P500/cash for his wife after he passes. But most people are not Warren Buffett's wife.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Buffett interview Monday 2/27

Post by JoMoney » Mon Feb 27, 2017 1:52 am

triceratop wrote:
stemikger wrote:Thanks for the Info.

I just submitted a question via Facebook. There are numerous questions about his index fund recommendations. I asked why he doesn't think it is a good idea to hold a portion in bonds to protect yourself from bad markets and behavioral mistakes.
Has he said this somewhere for the general investor? Many people I see who attribute this to Buffett are referring to his statements that he will recommend a 90/10 S&P500/cash for his wife after he passes. But most people are not Warren Buffett's wife.
Not the specific 90/10 allocation, but similar things several times, telling typcial people to have enough in cash/bonds that "they feel comfortable"
https://www.youtube.com/watch?v=1N3g47P-iRc&t=2s
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Re: Buffett interview Monday 2/27

Post by triceratop » Mon Feb 27, 2017 2:03 am

JoMoney wrote:
triceratop wrote:
stemikger wrote:Thanks for the Info.

I just submitted a question via Facebook. There are numerous questions about his index fund recommendations. I asked why he doesn't think it is a good idea to hold a portion in bonds to protect yourself from bad markets and behavioral mistakes.
Has he said this somewhere for the general investor? Many people I see who attribute this to Buffett are referring to his statements that he will recommend a 90/10 S&P500/cash for his wife after he passes. But most people are not Warren Buffett's wife.
Not the specific 90/10 allocation, but similar things several times, telling typcial people to have enough in cash/bonds that "they feel comfortable"
https://www.youtube.com/watch?v=1N3g47P-iRc&t=2s
Yeah, but he's talking about the historically low interest rates here; he is clear that his advice would be far different in a different interest rate environment. He says he has favored bonds in some interest rate environments.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Buffett interview Monday 2/27

Post by minesweep » Mon Feb 27, 2017 9:02 am

Berkshire Hathaway chairman Warren Buffett says stocks are comparatively cheap based on where interest rates are.
BUFFETT: Stocks are not in bubble territory

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Re: Buffett interview Monday 2/27

Post by malabargold » Mon Feb 27, 2017 10:10 am

triceratop wrote:
JoMoney wrote:
triceratop wrote:
stemikger wrote:Thanks for the Info.

I just submitted a question via Facebook. There are numerous questions about his index fund recommendations. I asked why he doesn't think it is a good idea to hold a portion in bonds to protect yourself from bad markets and behavioral mistakes.
Has he said this somewhere for the general investor? Many people I see who attribute this to Buffett are referring to his statements that he will recommend a 90/10 S&P500/cash for his wife after he passes. But most people are not Warren Buffett's wife.
Not the specific 90/10 allocation, but similar things several times, telling typcial people to have enough in cash/bonds that "they feel comfortable"
https://www.youtube.com/watch?v=1N3g47P-iRc&t=2s
Yeah, but he's talking about the historically low interest rates here; he is clear that his advice would be far different in a different interest rate environment. He says he has favored bonds in some interest rate environments.


Yes. Specifically when rates are 15% or more!

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Re: Buffett interview Monday 2/27

Post by misterno » Mon Feb 27, 2017 10:21 am

I heard he is heavily invested in Apple

Either he is very smart or I am really stupid

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Re: Buffett interview Monday 2/27

Post by Toons » Mon Feb 27, 2017 10:26 am

misterno wrote:I heard he is heavily invested in Apple

Either he is very smart or I am really stupid
From Annual Report
Shares 61,242,652 Apple Inc.
:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Buffett interview Monday 2/27

Post by user5027 » Mon Feb 27, 2017 10:38 am

On his index investing bet, it was just to show an index fund will outperform active managers ... "I mean the amount of money that people have wasted on getting investment advice is just ridiculous in this country."

It is at 2:37:35 on my recording of Squawkbox.

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Re: Buffett interview Monday 2/27

Post by Flymore » Mon Feb 27, 2017 10:39 am

misterno wrote:I heard he is heavily invested in Apple

Either he is very smart or I am really stupid

Ditto!!! :oops:

To me, all their stuff is way overpriced and the smartphone is a commodity now, prices going down!
He's basing his investment on the phone the kids he takes to dairy queen carry! :shock: :oops: :shock: :oops:
If it works, ok with me Apple is well represented in the ETF's I have. :beer

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Re: Buffett interview Monday 2/27

Post by jhfenton » Mon Feb 27, 2017 10:42 am

Toons wrote:
misterno wrote:I heard he is heavily invested in Apple

Either he is very smart or I am really stupid
From Annual Report
Shares 61,242,652 Apple Inc.
:mrgreen:
Early in the show this morning, he revealed that number more than doubled in January. He said that it's more like 140 million shares, all purchased prior to the earnings report. They're not buying now, so he didn't mind talking about it.

They said that the new shares made Apple essentially tied with Coke as Berkshire's second-largest holding.

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Re: Buffett interview Monday 2/27

Post by Toons » Mon Feb 27, 2017 10:46 am

jhfenton wrote:
Toons wrote:
misterno wrote:I heard he is heavily invested in Apple

Either he is very smart or I am really stupid
From Annual Report
Shares 61,242,652 Apple Inc.
:mrgreen:
Early in the show this morning, he revealed that number more than doubled in January. He said that it's more like 140 million shares, all purchased prior to the earnings report. They're not buying now, so he didn't mind talking about it.

They said that the new shares made Apple essentially tied with Coke as Berkshire's second-largest holding.
+1
Just read it and came back to "update" my post :happy
On Monday morning, Buffett told CNBC's Becky Quick Berkshire Hathaway doubled its Apple investment to 133 million shares in the first quarter,
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Buffett interview Monday 2/27

Post by Flymore » Mon Feb 27, 2017 10:50 am

Buffett had a prescient comment on interest rates, that it's like gravity to the stock market. Meaning with low-interest rates the market will rise. When there was high interest rates, it pulled on the market.

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Re: Buffett interview Monday 2/27

Post by jacoavlu » Mon Feb 27, 2017 11:13 am

is there anywhere to watch the full interview online?

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Re: Buffett interview Monday 2/27

Post by stemikger » Mon Feb 27, 2017 11:14 am

Flymore wrote:Buffett had a prescient comment on interest rates, that it's like gravity to the stock market. Meaning with low-interest rates the market will rise. When there was high interest rates, it pulled on the market.
I also saw this. What confused me is, last year he said it's not if interest rates rise, it's when. In that case wouldn't it be good for bonds (intermediate duration).
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Re: Buffett interview Monday 2/27

Post by stemikger » Mon Feb 27, 2017 11:15 am

jacoavlu wrote:is there anywhere to watch the full interview online?
I'm streaming it on my roku on the CNBC channel which is free. However, it's in short clips. It will probably appear on Youtube tomorrow or sometime this week.
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Re: Buffett interview Monday 2/27

Post by JoMoney » Mon Feb 27, 2017 3:52 pm

stemikger wrote:
jacoavlu wrote:is there anywhere to watch the full interview online?
I'm streaming it on my roku on the CNBC channel which is free. However, it's in short clips. It will probably appear on Youtube tomorrow or sometime this week.
https://www.youtube.com/user/cnbc/search?query=Buffett
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Re: Buffett interview Monday 2/27

Post by jacoavlu » Mon Feb 27, 2017 4:22 pm

^^^
thanks
I was hoping to find a source to watch the full length interview, in one piece

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Re: Buffett interview Monday 2/27

Post by Stormbringer » Mon Feb 27, 2017 6:44 pm

One point he made that really got me thinking was that 10-year bonds sell for 40 times earnings, with no potential for earnings growth. That really makes stocks seem cheap on a relative valuation basis.
"Compound interest is the most powerful force in the universe." - Albert Einstein

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Re: Buffett interview Monday 2/27

Post by triceratop » Mon Feb 27, 2017 8:10 pm

"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Buffett interview Monday 2/27

Post by JoMoney » Mon Feb 27, 2017 10:10 pm

Stormbringer wrote:One point he made that really got me thinking was that 10-year bonds sell for 40 times earnings, with no potential for earnings growth. That really makes stocks seem cheap on a relative valuation basis.
Yeah, but at the same time, a bond sells for 1x "Book Value" and principal is guaranteed to be there in 10 years. While the market is selling at about 2.9x "Book Value". The book value multiple dropped to 1.8x at the end of 2008, if the P/B multiple heads down that direction, you would need almost 5% annualized growth and dividends just to get back to even.
I have no idea what direction price multiples will go in over the next 10 years (2.9x book value is the 'median' from the past 20 years listed in Vanguard annual reports for VFINX). I also don't know how much (if any) growth we'll see over the next 10 years, but I'm hopeful. :beer
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Re: Buffett interview Monday 2/27

Post by boglephreak » Tue Feb 28, 2017 3:44 am

i read the entire transcript. i do not think we are the target audience for that interview. a few interesting tidbits around the end and the statement regarding the market not being overvalued, but i wouldnt recommend it to anyone.

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Re: Buffett interview Monday 2/27

Post by sambb » Tue Feb 28, 2017 5:07 am

isnt buffet a very senior individual who is still a stock picker and active manager?He market times also? I will pass on his interviews.

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Re: Buffett interview Monday 2/27

Post by lazyday » Tue Feb 28, 2017 5:47 am

Thanks.

A few quotes on the expensive US stock market and interest rates, from throughout the interview:

--------------------------------------

And we are not in a bubble territory or anything of the sort. Now, if interest rates were 7 or 8 percent then these prices would look exceptionally high. But you have to measure, you know, you measure everything against: interest rates, basically, and interest rates act like gravity on valuation. So when interest rates were 15 percent in 1982 they'd pull down the value of any asset. So, what's the sense of buying a farm on a 4 percent yield basis if you can get 15 percent in government's? But measured against interest rates, stocks actually are on the cheap side compared to historic valuations. But the risk always is, is that — that interest rates go up a lot, and that brings stocks down. But I would say this, if the ten-year stays at 230, and they would stay there for ten years, you would regret very much not having bought stocks now.

[we're getting into a position where the Fed could raise rates rapidly or not?]
Well, I don't really know. But what I do know that when you've got Europe and Japan with the rates they have, and particularly Europe, I mean, it's – the spread gets – you've got to be thinking about the spread. You're not have 8 percent rates in the United States and 1 percent rates in Europe or something of the sort. So Europe is a big factor. And you know, you widen it out, the dollar gets stronger, that hurts export. I mean, there's a lot of consequences to everything. You never can do just one thing in economics, you always have to say, "And then what?" And if I were the Fed, I'd probably be saying, "And then what?" if I got too big a spread against Europe.

Well, it's not like during the internet boom or – and there have been various real peaks – I've written a couple of times when I thought things were getting out of hand on the high side. And-that's not now. Now, if interest rates dramatically upward, then these valuations would come down, in my view. But I don't see the games being played on a big scale that you had in the late '60s or that you had around the internet time, you know. I don't see lots of just fallacies being promoted. Or games being built on accounting tricks and that sort of thing.

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Re: Buffett interview Monday 2/27

Post by friar1610 » Tue Feb 28, 2017 7:11 am

sambb wrote:isnt buffet a very senior individual who is still a stock picker and active manager?He market times also? I will pass on his interviews.
Hey! A lot of us BHs are "very senior individuals".
:beer
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Re: Buffett interview Monday 2/27

Post by jainn » Tue Feb 28, 2017 8:25 am

http://www.cnbc.com/2017/02/27/billiona ... k-box.html


Quick: You know, there are a lot of people who think you need to be balanced. If you're going to be in stocks, you also need to have balanced in bond. Maybe 60/40 or 80/20 or whatever it may be. I have money in Fidelity Retirement. I have everything in S&P 500 index funds like you've written, like you've told people to do with the exception of Comcast shares, which I own. But everything else is in S&P 500 index funds. And I get a red signal back from Comcast – from Fidelity saying, "This is dangerous. You should not be invested in stocks." Are they right to warn me off?

Buffett: No, I think that's totally wrong. I mean, it depends – obviously, you shouldn't be invested in stocks with money you might need to use in the next –

Quick: It's a retirement fund.

Buffett: Yeah. But if you're going to need – you shouldn't borrow money against stocks. And you shouldn't – if you're going to need some money for college or something in a year, you don't want to be in stocks because you don't have any idea what stocks are going to sell for in a year. It's inappropriate. But stocks are safe for the long run and they're very unsafe for tomorrow. If you call unsafe being will you be bothered by a decline in market prices. But Berkshire, three times since I took over, has gone down roughly 50 percent. Did I feel poor then? No, not at all. I mean, you know, but I didn't owe it on borrowed money. I knew it was going to be worth more over time. American business is going to be worth more over time. You know, that's what you're buying, is a business. You're not buying a stock, you're buying a piece of a whole bunch of businesses. Are those businesses going to be worth more ten or 20 or 30 years from now? Of course, they are. But if you think you can jump in and out or that you know the time to come in, then I think you're making a mistake.

Quick: In my lifetime, you said, you wouldn't be surprised to see the DOW go to 100,000?

Buffett: Yeah, well, you're probably, what, 30, 35 and you got another 50 years or 60 years left—

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Re: Buffett interview Monday 2/27

Post by linenfort » Tue Feb 28, 2017 11:50 am

One takeaway form this interview is that Becky Quick, who has to talk about individual stocks and ephemeral events all day on CNBC, buys the S&P index fund and not much else.
misterno wrote:I heard he is heavily invested in Apple
Either he is very smart or I am really stupid
Well, those two things aren't mutually exclusive. :wink:

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Re: Buffett interview Monday 2/27

Post by james22 » Mon Mar 06, 2017 5:09 am

Last week, Warren Buffett himself made the jaw-dropping suggestion that the market was “cheap relative to interest rates.” Now, if you understand a century of market history, and Buffett’s own investment decisions over time, the most obvious conclusion is that Warren has been abducted and replaced by either an imposter or a highly sophisticated yet folksy robot.

My friend Jesse Felder has a simpler explanation, which is that Buffett strongly prefers not to disrupt the markets to the downside. In a piece titled Why Warren Buffett is So Reluctant to Call Stocks a ‘Bubble’ Jesse mentions the 2001 Fortune article and writes, “What you need to know about Mr. Buffett, though, is that he was eager to share this warning signal with investors only well after stocks had peaked. In fact, the Nasdaq Composite had already crashed by more than 70% before the words above were published.

It’s true that he did make an earlier warning in Fortune but both articles were the products of the enterprising (or kindhearted - I’ll let you choose) reporter Carol Loomis who learned of Buffett’s private worries about the stock market and convinced him to make them public.”

Two years ago, as the broad market was about 10% below current levels, Alice Schroeder, who authored a book on Buffett titled The Snowball, also observed, “in private he has been more negative, at least with me, about the economy, money-printing, employment, than he is in public.”

Buffett has always expressed an admiration for the U.S. economy, and for long-term investment in the equity market. Knowing that every share of stock outstanding has to be held by someone at every point in time, he undoubtedly recognizes that there is no way for investors, in aggregate, to avoid market risk. My impression is that he has decided that he’s not going to be the guy who busts their bubble.

To the extent that Buffett is now in the commendable process of divesting his holdings for the benefit of charity, one might even view his reluctance to rock this boat to be protective of that legacy - provided that investors aren’t encouraged by his words to take investment positions they can’t tolerate holding over the completion of this market cycle and for a very, very, long time thereafter.


https://www.hussmanfunds.com/wmc/wmc170306.htm

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Re: Buffett interview Monday 2/27

Post by lazyday » Mon Mar 06, 2017 5:34 am

james22 wrote:[Jesse Felder]What you need to know about Mr. Buffett, though, is that he was eager to share this warning signal with investors only well after stocks had peaked. In fact, the Nasdaq Composite had already crashed by more than 70% before the words above were published.
Did Buffett really not warn on the bubble in the late 1990s?

If you haven't read the interview, here's my post from a few days ago quoting him on the not-bubble and interest rates: viewtopic.php?f=10&t=212218#p3259292

I can see how if you think interest rates will stay low, then it could make sense to stay invested in the stock market. Without RTM, US market could return over 4% real according to AQR's estimate. Long TIPS are under 1%. So nearly 3.5% real risk premium. Expensive, but still worthwhile returns? Of course there is high risk of RTM.

At the 2000 peak, I guess a similar estimate would have been something like, what, 3% real for S&P 500? But long TIPS were around 4%! A negative real risk premium.

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Re: Buffett interview Monday 2/27

Post by james22 » Mon Mar 06, 2017 5:53 am

With RTM (Bogle's 'Iron Law of investing'), "...we expect the S&P 500 total return to underperform Treasury yields by about -2% annually over the coming 12-year horizon." https://www.hussmanfunds.com/wmc/wmc170306.htm

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Re: Buffett interview Monday 2/27

Post by james22 » Mon Mar 06, 2017 6:12 am

November 22, 1999 Buffett warned:

Investors in stocks these days are expecting far too much, and I'm going to explain why.

...

Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like--anything like--they've performed in the past 17.

If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate--repeat, aggregate--would earn in a world of constant interest rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%.

If you strip out the inflation component from this nominal return (which you would need to do however inflation fluctuates), that's 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more.


http://archive.fortune.com/magazines/fo ... /index.htm

Linked from: https://www.thefelderreport.com/2017/03 ... -a-bubble/

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Re: Buffett interview Monday 2/27

Post by lazyday » Mon Mar 06, 2017 8:04 am

james22 wrote:With RTM (Bogle's 'Iron Law of investing'), "...we expect the S&P 500 total return to underperform Treasury yields by about -2% annually over the coming 12-year horizon." https://www.hussmanfunds.com/wmc/wmc170306.htm
I like RA’s estimate methodology. They include 50% RTM of PE10 in 10 years, but unfortunately don’t address profit margins. January’s RA return estimate was 0.8% real for US Large.

GMO includes some margin RTM but of course they don’t share much methodolgy.

Thanks for the Buffet link. He also talks about profit ratios, though he uses profit/GDP instead of profit/sales. I guess they each have their problems. GDP excludes foreign profits, and perhaps margins should be higher in an information economy.

Both are very high today. Here’s profit/gdp: https://fred.stlouisfed.org/graph/?g=1Pik

By the way, that 4% Buffet estimate from sometime in 1999 seems to remove 1% for expenses. Some of those are unavoidable today, such as underwriting secondary offerings. But most are avoided by investing directly in Vanguard index funds.

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Re: Buffett interview Monday 2/27

Post by lsp12 » Mon Mar 06, 2017 11:58 am

james22 wrote:November 22, 1999 Buffett warned:

Investors in stocks these days are expecting far too much, and I'm going to explain why.

...

Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like--anything like--they've performed in the past 17.

If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate--repeat, aggregate--would earn in a world of constant interest rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%.

If you strip out the inflation component from this nominal return (which you would need to do however inflation fluctuates), that's 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more.


http://archive.fortune.com/magazines/fo ... /index.htm

Linked from: https://www.thefelderreport.com/2017/03 ... -a-bubble/
Pretty accurate forecast. People today focus on recent returns but seem to forget the poor returns in the first part of the century, plus of course the 2008 - 2009 crash.

S&P return, nominal, including reinvested dividends: Nov 1999 - Feb 2017: 4.972%
in real terms: 2.798%

using this calculator: https://dqydj.com/sp-500-return-calculator/

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Re: Buffett interview Monday 2/27

Post by james22 » Wed Mar 08, 2017 12:50 am

lsp12 wrote:S&P return, nominal, including reinvested dividends: Nov 1999 - Feb 2017: 4.972%
in real terms: 2.798%
Crazy talk in November 1999.

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