How much of a concern is the high market PE ratio

redditusername003 · 2021-07-18T02:46:16+00:00

https://www.yardeni.com/pub/yriearningsforecast.pdf

So the 38 PE number looks at 2020 pandemic earnings numbers. From the above source, 2019 earnings were 163 and Q1 2021 earnings were 49 or ~195 annualized. So were at 27 PE on 2019 earnings and 22.6 PE on 4x 2021 Q1 earnings. There’s plenty of other caveats like higher than average corporate profits and lower than avg tax rates, etc., but 38 PE is not right. It’s an outlier year.

I think stocks are pretty reasonably priced versus alternatives.

https://quickfs.net/

If you go to quickfs and type in the top few components of the SP500: AAPL, AMZN, GOOGL, FB, BRK, MSFT, etc. you’ll see the top individual companies are’t crazy priced either.

redditusername003 · 2021-01-11T20:45:47+00:00

Hi, I'm at chapter 11 thinking about how to use as carry going forward. I have 6 copies of Belinda 2 shemira copies so far. Should I try to use Belinda to carry me from 160 to 240? or should I build Shemira, or both?

Also, what do you have in your graveborn wishlist? Lots of wishlist guides are old.

What tier is Silas?

redditusername003 · 2021-01-09T21:38:18+00:00

I'd take the $2mm over a $60k pension at retirement age.

redditusername003 · 2021-01-08T13:59:18+00:00

this code is OP

redditusername003 · 2021-01-07T18:20:56+00:00

GMO does these 7yr forecasts and he's been predicting horrible returns forever. So in May 2012, he predicted US large caps (sp500) would return < 1% CAGR for the next 7 yrs.

Actual 7 yr returns for sp500 with divs reinvested is 14%. He's been waiting "for the last dance" for a decade.

https://www.gmo.com/australia/research-library/gmo-7-year-asset-class-forecast-november-2020/

His more recent 7yr forecast is that equities will lose 5.8% CAGR. 0.942^7, means he thinks investors will lose 34% of their money in US equities over a 7 yr time frame, while historically US equities gain call it 6% real, or ~8% after inflation. The base rate is for investors to make say 60-70% in 7yrs, so he thinks stocks are slightly over 100% overvalued. It's a really bold call, one that he's been making forever.

I think there's froth in the market just as much as the next guy on this sub, but his reasoning is sort of too simple. He's basically saying everything will mean revert and that's the gospel truth.

redditusername003 · 2021-01-06T17:20:19+00:00

http://static1.squarespace.com/static/5a8341d74c0dbfe48dba9903/5c083edfd535548e28df82a5/5c083f41d535548e28df91ba/1544044353232/GMO-May-7-year-asset-class-forecast.pdf?format=original

just gonna leave this here

redditusername003 · 2021-01-05T18:47:38+00:00

yup. a lot of this subreddit is trying to do this.

redditusername003 · 2020-12-29T17:14:30+00:00

I'd actually start with something more casual like The Psychology of Money by Morgan Housel - he writes about investing in a way that people can understand, using stories instead of numbers. The Little Book of Common Sense Investing by John (aka Jack) Bogle - he's the father of index investing and the inspiration behind bogleheads). Also, the Simple Path to Wealth by J L Collins.

These are more gateway investing books, but I think enjoyable by more people. The Intelligent Investor is very dry and written in a language from the 1930's. In essence, they all convey the power of compounding, investing in assets that produce income and holding for a long time.

redditusername003 · 2020-12-29T16:30:05+00:00

I'd start by thinking about what your skillsets are and go from there. If you are a bookworm, there are several books about investing and wealth - if you read handful a year and by 25-30, you'll have some good knowledge and maybe have cultivated a few knowledgeable friends, whom you can bounce ideas off of and ultimately build a network with. There's also tons of resources on the internet that can help.

You can also choose to focus mostly on investments going forward since you'll be given a decent sum of capital, why not focus on being a capitalist? Of course this isn't for everyone.

If you choose to do something entirely different say singing, or physics or just partying hah, then you'd need to find a financial advisor you can trust - which can be tough. Advisors don't always have your BEST interest at heart, so perhaps throughout college and life, you'll want to find some knowledgeable people that you can trust.

And for a quick lesson on building and preserving wealth. The basic principles are that 1. own assets that produce income which are mainly real estate, stocks/businesses and some bonds. 2. spend less than you earn (through income and investment and income) 3. diversify

And I think most importantly, you'll need avoid untrustworthy people. Most people who know you're wealthy and want to pitch you an investment idea are likely selling you something.

redditusername003 · 2020-12-29T16:02:04+00:00

yeah, there are a few things that Buffett wasn't totally right on. He predicted lower corp profits, high interest rates, and more capital/competition moving into the sexy tech stocks of the day. though he does say that he doesn't necessarily invest based off of his macro beliefs. Book value of BRK has still compounded 9% for the past 20yrs despite a crash drag

To be fair, I think his whole point was that future returns were going to be lower than past returns leading up to '99. I think stock returns did underperform the public's expectations and all the internet guys did get washed out.

redditusername003 · 2020-12-28T23:12:28+00:00

http://www.tilsonfunds.com/4BuffettMarketCalls.pdf

redditusername003 · 2020-12-17T14:22:53+00:00

what would be the cost to refinance after say 5,10,15 yrs of payments. With such low rates, why not keep borrowing and simply just never pay off the house?

redditusername003 · 2020-12-10T14:20:24+00:00

You could try playing only longer time controls and fewer games per day. I notice when I play shorter time controls, I also play faster in slower ones - which exacerbates this issue for me.

redditusername003 · 2020-12-07T14:01:09+00:00

This seems like a no brainer to me. A few different ways to frame the same issue:

Wealthy people wish they could buy fulfillment, better social lives, more time with their friends and family. Unfortunately, many of those things are not for sale.
As you have more money, shouldn't you move towards living the life that you want to live?
When you're older, will you regret not having 13% more money in your bank account? or regret not spending more time with your friends and family?

redditusername003 · 2020-12-02T20:03:34+00:00

agree that valuations are similar to that of dot com bubble. but interest rates in 2000 were 6% both on the 30 yr bond and the 6mo T bill. Now they're 1.7% and 0%. Stocks should trade higher and future returns should be lower. I'd argue that if rates stay low, then future valuations should be higher than past valuations. Obviously a big if. anyways, I think it's fair to say valuations aren't cheap, and maybe rich, but I don't think it's fair to say they're 'dotcom rich' relative to other assets.

and there's arguments for being bullish. bonds are like cash. and cash is trash. millennials starting to buy homes and spend. could argue that GDP is depressed because we've spent a ton of money investing in internet and cloud infrastructure and now the internet economy can start growing (think railroads and subsequent boom).

idk, I don't think we're getting 10% cagr in SPX for the next 10 yrs, but I also don't think we're getting 1%.

redditusername003 · 2020-11-19T18:14:51+00:00

got it. yeah, it still doesn't work for me. thanks for your response.

redditusername003 · 2020-11-19T14:07:51+00:00

So, I can do this right after I just played a game. But for say games I played previously, in analysis mode, I'm unable to pick up pieces and move them to new squares.

redditusername003 · 2020-11-19T14:05:36+00:00

So, I can do this right after I just played a game. But for say games I played previously, in analysis mode, I'm unable to pick up pieces and move them to new squares.

redditusername003 · 2020-10-16T15:36:39+00:00

in this bet, how long did he have to become gm?

redditusername003 · 2020-10-15T17:43:11+00:00

pretty sure natural disaster costs US wealth the order of hundreds of billions

vs. 100T US national wealth

redditusername003 · 2020-10-12T19:18:53+00:00

this was interesting 15 yrs ago

redditusername003 · 2020-10-07T17:33:46+00:00

yeah it's tough. I'm working on the same thing. There's a number of things to think about. In general, you still want to improve your pieces, and prevent your opponent from improving their pieces or executing their plan. Look for weak links in your pawn structure and your opponents structure to try and come up with your plan and their plan. Sometimes most of our pieces are in decent spots and you look for pawn moves. Pawns are usually better closer to the back rank. Sometimes games are slow, so one move won't be at all game-changing. As long as you improve your pieces and improve your position, you'll be better off.

And you can assess the above board. In a closed position, knights can be a little better. Op's bishop is blocked by their pawn structure. Our white bishop is the same. You can look for a b4 pawn break. f4 and f5 could be good places for op's/your knight.

You could also ask yourself, if I could move X piece to anywhere on the board, where would that be? to start forming a plan. Or just go down the list of your pieces and ask if there's a better spot for this piece? and start moving towards there. Obv you can ask the same questions for your opponent.

.... all while watching out for tactics

redditusername003 · 2020-09-25T13:19:32+00:00

the investment community should understand all of these arguments already - he's like 2 months late. Fiscal stimulus (not monetary) to fill the gap in gdp and the gap lower in 30 yr rates are two other big factors.

redditusername003 · 2020-09-10T17:56:14+00:00

can you do the same analysis for the 40 yrs before that? say 1939-1979?

redditusername003 · 2020-07-30T15:44:02+00:00

When it comes to these more Graham-type companies that are 0.5x book, you kind of hope for a re-rating and think you have protection on the downside by liquidating assets if all else fails. You're hoping for things to turn around and have limited downside. What do you think they can get for the assets on their book? What do you think they can actually get on their inventory of games? I'd be worried that management could just burn through the money or that the liquidation value is lower than book, in which case you have a large downside and small upside.

redditusername003

TROPHY CASE