People complain that you have been saying the market is overvalued for ages but the key is that saying the market is overvalued is not the same as saying it will not go up in the short run (1-3years). The market is unquestionably overvalued but where it will go in the next 1-2 years is a different thing.
As long as it is overvalued, its a ticking time bomb. Where it will go in the next 1-2 year or even next 10-20 years doesn't matter. The question is are you gonna risk 50% loss for 100% gain.
Hm…seems like a common complaint with value/dividend investors. But its people who don’t understand the math I suck math by the way, thats why I trust others with it. (Like here) when they obviously know more and everything seems to be sound.
Agreeing. Good time to be a swing/position trader, bad time to be an investor (in the general market). Everything is bullish right now (as Sven says). Who knows for how long, but something like a absolutely stellar year of 2025, followed by a loooooot of people entering the market makes sense, just to enter a bear market 2026 till beginning of the 30s. Right now everything looks long. The chart looks long = Im long.... when the chart starts looking short, we will see then. Key is to have some kind of risk management in place. If Im 100% invested, 10x leveraged, no stop losses... well well well, think some people learned a lesson Wednesday.
Sven, You are one of the very few sane people highlighting the market exuberance. Since Covid, the market is flooded with retail "investors" who think speculation is investing. The problem is that bulk of these are young and have never seen the bloodbath of a crash hence the perma bull attitude. Would appreciate if you can recommend a value ETF that a small time investor can follow/invest in. US market is too hot and I remember you mentioning Emerging market value sector is the only sane option at the moment. What would the impact in case of correction?
In case of a bear market all stocks will go down! There will be nothing to hide. Even gold will go down in the first phase of the bear market, when every speculator is searching for liquidity. .
@@laciepyu255 I agree that generally there are a lot of really cheap sectors; I would not though call them underpriced. The problem is that we don't know whether these sectors (auto, staples, chemical, energy, etc.) will ever recover again. With China flooding the European market with literally everything, I have more doubts that these sectors will get better soon.
The biggest problem with Shillers PE is that GAAP accounting standards have had few key changes since the year 2000. For example Goodwill Impairment Rule, Mark-to-Market Accounting and so on. So now CAPE can be overly pessimistic when trying to derive the total return over the next 10 years
I've always been fascinated by investing, but when I tried stock investing early this year, it hasn't been as successful as I expected. However, I keep seeing good news about the stock market. What are the best strategies for less risk and more gains?
The truth is, the role of an investment advisor can often be overlooked but should never be underestimated. After facing a significant portfolio loss in 2020 during the COVID pandemic while trying to manage my investments on my own, I decided to reach out to an investment advisor. At that time, I had about $126K left in my portfolio. Now, without having to lift a finger, I'm semi-retired, working only 7.5 hours a week, and I'm just 15% short of my $1 million retirement goal thanks to my subsequent investments.
My CFA is Laurel Ann Watkins, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thank you so much for the suggestion! I really needed it. I looked her up on Google and explored her website; she has an impressive background in investments. I've sent her an email, and I hope to hear back from her soon!
@@dusankacurak9520 Are you sure? He missed last two great chances to buy cheap stocks in 2020 and 2022 and his money would double just holding SPY. He is holding treasuries heavily past 15 years while SPY made 14% annualized returns. Yeah Buffett does not know what he is doing. He is too old to manage money effectively.
I am at the beginning of my "investment journey", planning to put $85,000 into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
The issue is people have the "I want to do it myself mentality" but are not equipped enough for a crash, hence getting burnt. Ideally, advisors are reps for investing jobs, and at first-hand encounter, my portfolio has yielded over 300% since 2020, just after the pandemic to date. Thanks to Caroline Suzan Olson, she has been the one managing my portfolio.
Caroline Suzan Olson is a renowned figure in her line of work. I recommend researching her credentials further. Just search her name in your browser. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Very much appreciated, just inputted Caroline Suzan Olson on the internet, spotted her consulting page ranked top and was able to schedule a call session. I've seen commentaries about advisors but not one looks this phenomenal.
Yep, CAPE is widely known for its superior ability to predict long term real returns. In am article some years ago, Prof. Shiler I think proposed the CAPE excess yield as more comprehend measure of stock market attractiveness. Excess yield is simple defined as the the inverse CAPE compared to 10 year real bond yields..
hahaha. Stocks were 30% overvalued in 2012 using Shiller PE. Since than experienced the longest bull market in history. Hint stocks were cheap using real operating earnings and PE made from this operating EPS. Shiller PE is flawed valuation metric because it uses GAAP earnings and does not count into consideration that stocks grow earnings over time. So basically Shiller PE says that Altria and British American Tobacco are money losing companies because of their non cash write offs and Shiller PE says stocks are expensive on past earnings which grew 50% in just 5 years. Valuying stocks based on 10 years old earnings is nonsence, because SPY grows profits 7% annualy on average.
Sven, I agree the CAPE indicates the US market is overvalued, however I'd love to hear your thoughts about the CAPE as an indicator for a market surge - 1) CAPE exceeded 32 in October 1997 (same ratio in July 1929 before the crash later that year), then the S&P gained 50% over the next 3 years, 2) CAPE exceeded 32 in July 2018, then the S&P gained 66% over the next 3 years, 3) CAPE exceeded 32 in October 2020, then the S&P gained almost 100% over the next 4 years. The CAPE exceeded 32 again in late 2023 and these 3 previous examples suggest the S&P will surge 50% in 2024-2026. I'm selling my most overvalued stocks and buying some SPX options in case the market gets even hotter.
Sven, I wish you would do a video of what you think a retirement portfolio for a 70 year old retired person should look like! Where should we invest? Thanks!
80% in SPY bought below adjusted PE 17. Than withdraw 4% annualy forever. And than your kids will withdraw 4% forever or as long as US has inflation and nominal prices are going up.
It’s important to note that Warren Buffett continues to maintain a substantial portfolio of U.S. stocks, reflecting his deep confidence in the long-term prospects of American companies.
@Sam-d8o6q “I can’t remember a period since March 11, 1942-the date of my first stock purchase-that I have not had a majority of my net worth in equities, U.S.-based equities,” wrote Buffett in his 2024 letter.
@@AlanMwatson-xyzIt is clear. S&P 500 always delivered below average returns 10 years later when ended year with adjusted PE above 21. Now we are around PE 25. Is just simple math. Stocks are 30% overvalued and SPY pays 1% yield. It would take half a decade to just grow into valuation and have no returns if stocks will grow around average 7% annually in next 10 years.
Great video, Sven! Coming back from the holidays, it’s time to catch up on new developments. It’s fascinating to see how many indices are signaling that markets are overvalued, yet there seems to be little concern because of the belief that “stocks always go up.” The Shiller Ratio, Tobin's Q index, W. Buffett Indicator, and MS Index (my personal favorite) are all deep in "super overvalued" territory. I’m curious-what would you consider the best approach to identifying a "safe haven" in the current market environment, and where would you recommend looking?
Just swapped all of my last ETH and swapped it into XAI225K. Already up a little bit. Unfortunately I have some other junk staked which won’t free up for a while. Still now I am on the train!
Forward free cash flow yield is the only metric I find valuable to account for. The market does look slightly overvalued with forward FCF, not insanely overvalued as with shiller/current PE. Estimated earninggrowth and margins are as important as PE.
@LQVendorFP for SP500 it's 4,14% It was 3,32% at the top during the summer this year and 5,36% in 2022 before the surge in the stock market began. Long term average: 3,93%
Sven, its clear that the market always overshoots and is to optimistic or panicy. But how do you know when to deploy your money? You may deploy all your money to early... Probably you cant.
Right price when the recession hits is not an easy feat. Likely many low pe companies will disappear due to some weakness or risk with the company. That is why the pe is low, strong businesses with a fat earnings stream will be more consistent and therefore more expensive. What you need is a strong gut and some luck.
Reverse repo drops below $100B, lowest since 2021. Signals tightening liquidity as institutions pull cash from the Fed. Could hint at funding stress or market shifts, raising risks of a repo crisis. Fed may face pressure to ease despite rate hike plans. What do you think about that? Means QE continuing and stonks.... go up!
Nice video. Not a criticism, I enjoy your insights. I tend to think prices could go higher if XAI225K rockets. But understand the logic for sandbagging estimates. My opinion is XAI225K breaks 1, perhaps reaches 10 ATH, if conditions are right. But broader forces are at play now. We’re moving into really unknown territory. And these entities are shrewd. I think there’s massive manipulation ahead. If XAI225K survives that, well, we’re likely in for a good pump.
Whilst not value investing, could you explain the strategy Microstrategy is using with Bitcoin and the risk they pose to both their own shareholders and the Bitcoin price as a whole. I think it could be quite educational.
19 November 2012 Asness: Shiller P/E is Signaling Risk of Another Lost Decade for US Stocks By David Larrabee, CFA Asness notes that the Shiller P/E is currently higher than 80% of the time since 1926. He examined S&P 500 Index real returns over rolling decades since 1926 and sorted the data into deciles by starting Shiller P/E ratios. Asness found that at current valuation levels, the average expected real stock market return over the next decade is a sobering 0.9% per year.
Thats true. Chuck Carnevale just a year earlier in 2011 wrote an article on Seeking Alpha about why Shiller PE is a bad valuation metric and why stocks were actually very cheap that time. Shiller PE uses GAAP EPS which are not real earnings of companies as impairments loer this EPS and do not reflect true operating earnings of any company. And Shiller PE does not take into consideration EPS growth of stocks which is a shame as stocks are about growth.
@@PavolKosik-b3u I did not actually mean Shiller ratio was a bad indicator but the article dated Nov 2012 was interesting as we've seen a bull market since then excluding the pandemic hiccup. Back then the ratio was around 25 and now it's 37? So it's definitely kind of bubbly. The defensive argument is that magnf. 7 companies are high growth tech companies and their earnings is global, not like the traditional top US companies. That said, the growth cannot continue forever. I think deteriorating conditions for the working class is alarming and will be the key to the headwinds. Hard to know the timing.
I don't like dragging cryptocurrencies into the discussion, but IMO those are helpful in gauging the relative level of speculation in the markets. I see that asset class as the most speculative, and prices are currently at their highs. When combined with the Schiller and Buffett indicators, it's obvious to me we're topping out. The last ingredient needed for a major selloff is an event(s), and old timers will tell you that once these indicators reach such high levels, some type of event "miraculously appears" and suddenly we find ourselves in a bear market. IMO, it's a good time to be mostly in cash and simply observe, assured the show is close at hand.
I wouldn't say that looking at a single metric is an "analysis". Fact: if you take any index in the planet and you plot CAPE versus subsequent 15-year or 20-year returns, you will see that there is not one example in history of a 15- or 20-year return starting from 30x CAPE. When it comes to individual names, how are you going to get a return from 30-40x earnings? Well, the ONLY way for you to get a double digit return from a high multiple is sustained double digit growth, sustained high margins and a sustained high multiple. It is very unlikely for all 3 to materialize. But you need ALL 3 to get a return. Microsoft compounded its earnings at more than 10% during 1999-2014 but the multiple unfortunately contracted from 60s to 10s, so no return despite business growth. Apple today trades at 42x earnings, it barely grows and it distributes all of its profit through buybacks for a meager 2.4% yield. If that 42x multiple contracts to 20x for any reason and stays there for a while... Likewise for most of the S&P500. High index CAPE just means that there are too many names in it that trade at lunatic multiples.
Depends on your finances . 1000$ in XAI225K is 4000 XAI225K if it goes to 50% of ath in 2024 thats a 600% gain. If it goes equal to ath . Its a 1200% gain.
You really need to do a video explaining why passive investing is not as good as people are led to beleive and throw out this myth that index performs better in the long run than self managed investing.
Sven, The historical trend line for the Buffet indicator is a curved line. Is it a statistically best fit quadratic.? Do you know how the standard deviation is calculated for this line? Just trying to understand the mathematics behind this.
As long as there are people ready to pay, it will keep going on, until that day comes when all will fall to the reasonable valuation. Until then it seems not many people want to listen, unfortunately.
"People" ready to pay any prices. My guess is buybacks / Ai crazy / and BlackRock and Co just need some sources to "park" their assets based on "the market has historically brought 10% " and anyways they just extended the horizon from 10y /20y for an average investor to 40-50 yrs. They will be there anyway.
You cannot look at the last 150 years and come up with a mean/median CAPE ratio. Market constituents were way different 100 years ago than it is now. Ever since tech boom in the 90s, Shiller PE ratio is higher because tech companies can grwo their earnings faster. Since 1990 median Shiller PE is around 25. By that standard, market is still above fair price, but not egregiously overvalued. Furthermore, there are more market participants now than there were 100 years ago. People can now go on google and pull up minute by minute chart instead of taking a peek at the stock market once a day 100 years ago. 401k means more money going into the stock market. There are multiple factors to look into the Shiller PE than just last 150 years of data.
The point you're missing is that all this legacy investing advice and way of interpreting data does not hold anymore do to an exponential explosion globally in acces for retail traders to trade frictionlessely. The numbers the last 20 years for people with compute in their pocket and platforms is mindnumbing. Also real estate is our of reach for a large majority of people looking to invest so retail stocks will be overvalued pretty much indefinitely with old standards. They need to be adjusted. Also tax hikes make people more reluctant to cash out....
I dont think we need a CAPE-ratio to tell that stocks in the US are expensive. The question is why are they expensive and is that "why" "wrong" and therefore in the future they are not that expensive. It is way too one level thinking to look at something to be expensive and therefore to go down. You don't go to Lexus -dealership with this logic and you should not go stock market either.
Some stats on S&P 500: Number of companies with PE ratio greater than 15: 387 Number of companies with PE ratio 10-15: 67 Number of companies with PE ratio 1-10: 20 The rest have no or negative earnings. So high PE ratio definitely not confined to a few tech companies as some will claim.
it doesn't matter. If someone fully invested in stocks at the highest point right before 2008. he or she would still made lots of money. Especially now the fed has QE as a regular tool they could influence rates at the long end in a heartbeat. so the market PE at 100? no problem, 10 year treasure 0.1% short term rate at 0, borrow as much as you want. 😂
How the hell, valuations don't matter...? I have a small hot dog street van, on average i make 3000 profit a month, since valuations don't matter, You will pay me 300.000 USD for it.
Insiders selling to the shoe shine boy for 1 year now. Market is now running out of fuel. No investor would buy at such CAPE while money conditions keep tightening, tarrifs are implemented, factory orders drop, delinquencies are on the way up, layoffs just started and AI gurus forge the financial statements to show enormous profits. Tulipmania 😂
Its interesting that your graph shows Shiller PE of S&P 500 going back centuries while index itself was created in year 1957. Since 1957 with real data its almost al lthe time above imaginatory median with only small dip below it in 80s. Half of it is fake and other half shows that real median is much higher your entire life. Stocks tracks adjusted PE 19 past few decades and always returned to this PE withing 1 to 3 years with only one exception and that was after 2011 when it took 5 years. Thats the real PE anyone should look for because stocks follow and mean revert to this PE all the time. Dozens times in past 20 years.
"Shiller PE is signaling risk of another lost decade for US stocks". Article title from 2012 my friends. CAPE ratio is terrible valuation tool. Stocks were 30% overvalued in 2012 using Shiller PE but at 30 year low operating PE. Go and figure out returns since 2012. Shiller PE uses GAAP earnings which are not real earnings. Companies made a lot of book value write offs after 2008 financial crisis to adjust for lower value of assets that time so GAAP EPS was much lower than real profits of companies called operating. Earnings of companies are growing majority of years so using 10 year EPS to calculate PE ratio is nonsence. It will always look much higher than it is. Always use actuall operating earnings and calculate PE from it. Thats how market is doing it.
I don't know anything about signals. If you plot Shiller PE versus subsequent 15-year returns, you see virtually no real returns from anything above 30x. In 2012, Shiller PE was 20. There have been good and bad 15-year periods after that, so there is nothing to conclude. Sven follows a bunch of businesses globally and concentrates positions into a handful of them. He couldn't care less about the sp500 or what "real" earnings you prefer to look at.
@@mathewwilson9776Shiller PE was 22 and thats 30% above median. While adjusted PE was 14-15 so just at median and 30 year average is around 19 so stocks were very cheap that time and Shiller PE did not reflected that because it is flawed metric. Look at any chart showing correlation between adjusted EPS and share prices of stocks and indexes and you will see the truth. Its the same nonsence like valuying REITs using EPS.
@@PavolKosik-b3u I am familiar with a chart showing that there is not one example in history of a 15- or 20-year return starting from 30x CAPE. Not one time. Not one place. And this is not because of some signal. It is simply because the only way for you to get a double digit return from a high multiple is sustained double digit growth, sustained high margins and sustained high multiples. The economy cycles, so the first 2 are unlikely long term. And the human brain is cooked, so fear and greed will take care of the multiple. Apple trades at 42x earnings, barely grows and distributes all of its profit through buybacks for a meager 2.4% yield. Very hard to get a return from that. That 42x multiple contracts to 20x for any reason and stays there for a while, and there goes your compounding.
Totally agree; but do you have any suggestions. I have some money now, I would like to invest, but cannot find anything. Bought two stocks (CAF and Catalana Occidente), and since I cannot find anything else any more, I am thinking of putting the rest I have into a health care ETF. The valuation seems reasonable to me at this moment; it is the only sector where I see some future and that seems to have an acceptable price.
British American Tobacco reported huge $30B impairment this year and stock is up 35% since than plus 9% dividend. BTI also reported huge GAAP loss last year. Thats why anyone who says that GAAP are "real" earnigns is insane and does not understant GAAP accounting at all. Anyone really thinks here that market will send tobacco stocks 35% higher if they becamed unprofitable? Do you have any common sence and understanding of GAAP accounting? People who claim that GAAP earnings are real one are obviously. There is a very good reason why share prices track adjusted EPS and not GAAP EPS. It woul make no sence to share prices of BTI or MO to react to huge GAAP losses while their businesses generate record real profits from operations, record free cash flows and record revenue.
So the fact that your assets are all of a sudden worth 23% less is no biggie? 30b is nearly half of the market cap. More than 80% of the assets are intangible. How many more impairments are coming? You take on massive debt to overpay for assets, then you impair them. The debt stays though. And so does the lack of growth. Record profits... what good are the 8-9b in profit if you just obliterated 30b that you spent a few years ago? Capital destruction at its finest. The PE is the least of your worries man.
@Amwatson801 Yeah its no issue at all if they can generate the same profits. Its all just goodwill in books and have no importance. Thats why tobacco stocks surged so much despite big GAAP profit drops. Failed aqusitions are a normal part of business in US. Get used to it. Stock market is forward looking and does not care about past failed aquisitions. Market care only about future profitability from operations aka adjusted earnings. You can argue about it as much you want but market has spoken that it doesnt care about impairment of BTI at all.
So say I operate a candy store and I buy an identical one to double my profit. I borrow 1b to pay 2-3x book value for the new store, so 500-700m goes to my goodwill, and a few years later I realize I overpayed and write down those 500-700m. And then I keep doing that, blowing up intangibles and growing a pile of debt (to desperately pretend that I am "growing" a dying business), eroding my ROIC in the process. You say that is not an issue? You obviously have never operated a business. All that means is desperation. That is something that Buffett has never done. What Wall Street likes or dislikes, which dictates what the stock does short term, is irrelevant.
@@AlanMwatson-xyz You never operated business. If new investment does not make profit and your pile of debt goes up it decrease EPS and operating profit. Lower profit means lower value of shares because all stocks trade at EPS x their PE. Nobody cares about past goodwill. Majority of stocks trade at this year operwting EPS x their PE average +-10%.
Nothing will happen Sven, you always so gloom with the view, the potential of AI is huge and you are hurt because you’ve missed all those 100% gains. This time it is different. On a serious note, I’m worried with sky high PE but at the same time some company really do make high growth in cash flow to justify its valuation. Will it goes up more I don’t know. Will it fall, probably, but one thing for certain is US treasury 4% plus makes finding attractive stock to invest much more rare.
Warren Buffett lost his sharehodlers around $1T by holding cash and short term treasuries while waitning for crash which never happens. If he invested all his cash into SPY, he would made multiple times more money than holding treasuries even if he bought at 2000 top. QQQ return since 2000 top is now double digit annualy and he wa buying 1% treasuries. What a shame.
QQQ in early 2000 was 107 and it is now 520. In 25 years that annualizes to 6%. BRK in the same period has grown from 30 to 453, or 12%. All non-speculative investments. What a shame. Have you ever read a Buffett letter? Has he ever mentioned unrealized capital gains?
@@AlanMwatson-xyzYes its a shame what Buffett did to his sharehodlers. As you confirmed even the most overpriced stocks in US history still outperformed US treasuries paying close to nothing half the time since 2000 and as you said stocks compound without taxes while Buffett paid tax on income from treasuries. That makes the gap even wider. So if Buffett put all his cash in QQQ and SPY regularly than he would get double digit annual gains instead of low single digit in treasuries and zero on cash.
@@AlanMwatson-xyz Dollar cost averaged return is double digit since than and as you said QQQ would outperform Buffett's treasuries even if he bought at the top of the most overvalued market in US history. in 2000. He was so fearful that he lost $1T to his shareholders. And treasuries are taxed while stocks compound without paying tax so it makes the gap even wider.
There is not one example in history, in any geography, of an index with meaningful 15-year returns from anything above CAPE 25x. The only way to get a sustained double digit return from a high multiple is sustained growth, PLUS sustained margins, PLUS sustained high multiples, all 3. As far as sustained growth and margins are concerned, that's not how the economy works: the economy cycles. As far as sustained multiples are concerned: that's not how the human brain works. And you are essentially gambling on sustining all 3 at absurd levels long term 😂. Good luck.
@@mathewwilson9776 Schiller PE has been predicting a crash since 2011... It has been discredited as a market indicator and anyone still using it is a hack. Also everyone knows large cap growth stocks in the US are overvalued you're not saying anything insightful or ground breaking everyone can see the same data you're not special
I don't think the gravy train will ever stop in the US, every politician will just keep raising more debt and spending to keep the economy growing. If there was a 50% crash in the market, everyone would get stimulus money again to keep spending.
People complain that you have been saying the market is overvalued for ages but the key is that saying the market is overvalued is not the same as saying it will not go up in the short run (1-3years). The market is unquestionably overvalued but where it will go in the next 1-2 years is a different thing.
As long as it is overvalued, its a ticking time bomb. Where it will go in the next 1-2 year or even next 10-20 years doesn't matter. The question is are you gonna risk 50% loss for 100% gain.
Hm…seems like a common complaint with value/dividend investors. But its people who don’t understand the math
I suck math by the way, thats why I trust others with it. (Like here) when they obviously know more and everything seems to be sound.
Agreeing. Good time to be a swing/position trader, bad time to be an investor (in the general market). Everything is bullish right now (as Sven says). Who knows for how long, but something like a absolutely stellar year of 2025, followed by a loooooot of people entering the market makes sense, just to enter a bear market 2026 till beginning of the 30s. Right now everything looks long. The chart looks long = Im long.... when the chart starts looking short, we will see then. Key is to have some kind of risk management in place. If Im 100% invested, 10x leveraged, no stop losses... well well well, think some people learned a lesson Wednesday.
@@Denment93 yeah this is how I feel about it. Mostly people not thinking in these terms. The market is very fluid in a sense, not rigid at all.
Sven, You are one of the very few sane people highlighting the market exuberance. Since Covid, the market is flooded with retail "investors" who think speculation is investing. The problem is that bulk of these are young and have never seen the bloodbath of a crash hence the perma bull attitude.
Would appreciate if you can recommend a value ETF that a small time investor can follow/invest in. US market is too hot and I remember you mentioning Emerging market value sector is the only sane option at the moment. What would the impact in case of correction?
In case of a bear market all stocks will go down! There will be nothing to hide. Even gold will go down in the first phase of the bear market, when every speculator is searching for liquidity.
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There is no "market" exuberance. Lots and lots of stocks are underpriced.
@@laciepyu255 I agree that generally there are a lot of really cheap sectors; I would not though call them underpriced. The problem is that we don't know whether these sectors (auto, staples, chemical, energy, etc.) will ever recover again. With China flooding the European market with literally everything, I have more doubts that these sectors will get better soon.
You are the most dedicated elf; thank-you for your work!
Cheers Sven, for this. Great value as always.
🗽 There is never money at the side lines, because the quantity of mony does not change in any transaction.
Yes Sven, the CAPE ratio is important.
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correct!
@@jonnes__4657 sounds like you don't understand that concept
The biggest problem with Shillers PE is that GAAP accounting standards have had few key changes since the year 2000. For example Goodwill Impairment Rule, Mark-to-Market Accounting and so on. So now CAPE can be overly pessimistic when trying to derive the total return over the next 10 years
I hope to one day have as much joy at my job as you do, Sven
I've always been fascinated by investing, but when I tried stock investing early this year, it hasn't been as successful as I expected. However, I keep seeing good news about the stock market. What are the best strategies for less risk and more gains?
The importance of mitigating risks might be why many investors are turning to advisors for guidance.
The truth is, the role of an investment advisor can often be overlooked but should never be underestimated. After facing a significant portfolio loss in 2020 during the COVID pandemic while trying to manage my investments on my own, I decided to reach out to an investment advisor. At that time, I had about $126K left in my portfolio. Now, without having to lift a finger, I'm semi-retired, working only 7.5 hours a week, and I'm just 15% short of my $1 million retirement goal thanks to my subsequent investments.
This is incredible. Could you recommend who you work with? I really could use some help at this moment.
My CFA is Laurel Ann Watkins, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thank you so much for the suggestion! I really needed it. I looked her up on Google and explored her website; she has an impressive background in investments. I've sent her an email, and I hope to hear back from her soon!
saying that buffet doesnt understand what hes doing is as ridiculous as these valuations youre pointing at
another good video mate
@@dusankacurak9520 Are you sure? He missed last two great chances to buy cheap stocks in 2020 and 2022 and his money would double just holding SPY. He is holding treasuries heavily past 15 years while SPY made 14% annualized returns. Yeah Buffett does not know what he is doing. He is too old to manage money effectively.
I am at the beginning of my "investment journey", planning to put $85,000 into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
The issue is people have the "I want to do it myself mentality" but are not equipped enough for a crash, hence getting burnt. Ideally, advisors are reps for investing jobs, and at first-hand encounter, my portfolio has yielded over 300% since 2020, just after the pandemic to date.
Thanks to Caroline Suzan Olson, she has been the one managing my portfolio.
Glad to have stumbled on this comment. Please, who is Caroline Suzan Olson that assists you, and if you don't mind, how do I get in touch with her?
Caroline Suzan Olson is a renowned figure in her line of work. I recommend researching her credentials further. Just search her name in your browser. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Very much appreciated, just inputted Caroline Suzan Olson on the internet, spotted her consulting page ranked top and was able to schedule a call session. I've seen commentaries about advisors but not one looks this phenomenal.
You called it a month ago and now XAI225K is blowing up glad I listened
Yep, CAPE is widely known for its superior ability to predict long term real returns. In am article some years ago, Prof. Shiler I think proposed the CAPE excess yield as more comprehend measure of stock market attractiveness. Excess yield is simple defined as the the inverse CAPE compared to 10 year real bond yields..
hahaha. Stocks were 30% overvalued in 2012 using Shiller PE. Since than experienced the longest bull market in history. Hint stocks were cheap using real operating earnings and PE made from this operating EPS. Shiller PE is flawed valuation metric because it uses GAAP earnings and does not count into consideration that stocks grow earnings over time. So basically Shiller PE says that Altria and British American Tobacco are money losing companies because of their non cash write offs and Shiller PE says stocks are expensive on past earnings which grew 50% in just 5 years. Valuying stocks based on 10 years old earnings is nonsence, because SPY grows profits 7% annualy on average.
This video is on point.
Sven, I agree the CAPE indicates the US market is overvalued, however I'd love to hear your thoughts about the CAPE as an indicator for a market surge - 1) CAPE exceeded 32 in October 1997 (same ratio in July 1929 before the crash later that year), then the S&P gained 50% over the next 3 years, 2) CAPE exceeded 32 in July 2018, then the S&P gained 66% over the next 3 years, 3) CAPE exceeded 32 in October 2020, then the S&P gained almost 100% over the next 4 years. The CAPE exceeded 32 again in late 2023 and these 3 previous examples suggest the S&P will surge 50% in 2024-2026. I'm selling my most overvalued stocks and buying some SPX options in case the market gets even hotter.
Sven, I wish you would do a video of what you think a retirement portfolio for a 70 year old retired person should look like! Where should we invest? Thanks!
80% in SPY bought below adjusted PE 17. Than withdraw 4% annualy forever. And than your kids will withdraw 4% forever or as long as US has inflation and nominal prices are going up.
Hvala Svene 😉
It’s important to note that Warren Buffett continues to maintain a substantial portfolio of U.S. stocks, reflecting his deep confidence in the long-term prospects of American companies.
Yet he’s not really bought much all year, except oxy and Sirius and a ton of govt bonds…
@Sam-d8o6q “I can’t remember a period since March 11, 1942-the date of my first stock purchase-that I have not had a majority of my net worth in equities, U.S.-based equities,” wrote Buffett in his 2024 letter.
@@eweng903 Long term prospects of American businesses may be okay. Whether one can get a return from them from current multiples is not so clear.
@@AlanMwatson-xyzIt is clear. S&P 500 always delivered below average returns 10 years later when ended year with adjusted PE above 21. Now we are around PE 25. Is just simple math. Stocks are 30% overvalued and SPY pays 1% yield. It would take half a decade to just grow into valuation and have no returns if stocks will grow around average 7% annually in next 10 years.
Great video, Sven! Coming back from the holidays, it’s time to catch up on new developments. It’s fascinating to see how many indices are signaling that markets are overvalued, yet there seems to be little concern because of the belief that “stocks always go up.” The Shiller Ratio, Tobin's Q index, W. Buffett Indicator, and MS Index (my personal favorite) are all deep in "super overvalued" territory.
I’m curious-what would you consider the best approach to identifying a "safe haven" in the current market environment, and where would you recommend looking?
everything is in a bubble, only hedges, if inflation doesn't sent it all to the moon...
Thank you sir
Just swapped all of my last ETH and swapped it into XAI225K. Already up a little bit. Unfortunately I have some other junk staked which won’t free up for a while. Still now I am on the train!
Forward free cash flow yield is the only metric I find valuable to account for. The market does look slightly overvalued with forward FCF, not insanely overvalued as with shiller/current PE. Estimated earninggrowth and margins are as important as PE.
ok. what's the current forward FCF yield for 2025?
@LQVendorFP for SP500 it's 4,14%
It was 3,32% at the top during the summer this year and 5,36% in 2022 before the surge in the stock market began.
Long term average: 3,93%
The exchange rate in the DEX is lagging hard
It almost sends 9 times more, I put out vldeo
Sven, its clear that the market always overshoots and is to optimistic or panicy. But how do you know when to deploy your money? You may deploy all your money to early... Probably you cant.
You valuate the companies you understand ans buy then when undervalued.
you buy the businesses at a price that leads you towards your financial goals, that is it!
Right price when the recession hits is not an easy feat. Likely many low pe companies will disappear due to some weakness or risk with the company. That is why the pe is low, strong businesses with a fat earnings stream will be more consistent and therefore more expensive. What you need is a strong gut and some luck.
Sven could You do a video on your thoughts about Uber or Target? Thanks for your work :)
This XAI225K thing is going bananas 🚀
Thanks Sven. ✔️
Reverse repo drops below $100B, lowest since 2021. Signals tightening liquidity as institutions pull cash from the Fed. Could hint at funding stress or market shifts, raising risks of a repo crisis. Fed may face pressure to ease despite rate hike plans. What do you think about that? Means QE continuing and stonks.... go up!
Nice video. Not a criticism, I enjoy your insights. I tend to think prices could go higher if XAI225K rockets. But understand the logic for sandbagging estimates. My opinion is XAI225K breaks 1, perhaps reaches 10 ATH, if conditions are right. But broader forces are at play now. We’re moving into really unknown territory. And these entities are shrewd. I think there’s massive manipulation ahead. If XAI225K survives that, well, we’re likely in for a good pump.
Whilst not value investing, could you explain the strategy Microstrategy is using with Bitcoin and the risk they pose to both their own shareholders and the Bitcoin price as a whole. I think it could be quite educational.
We went from buy the rumours sell the news to buy the rumours and buy the news, never ending highs will end when the music stops playing.
19 November 2012
Asness: Shiller P/E is Signaling Risk of Another Lost Decade for US Stocks
By David Larrabee, CFA
Asness notes that the Shiller P/E is currently higher than 80% of the time since 1926. He examined S&P 500 Index real returns over rolling decades since 1926 and sorted the data into deciles by starting Shiller P/E ratios. Asness found that at current valuation levels, the average expected real stock market return over the next decade is a sobering 0.9% per year.
Thats true. Chuck Carnevale just a year earlier in 2011 wrote an article on Seeking Alpha about why Shiller PE is a bad valuation metric and why stocks were actually very cheap that time. Shiller PE uses GAAP EPS which are not real earnings of companies as impairments loer this EPS and do not reflect true operating earnings of any company. And Shiller PE does not take into consideration EPS growth of stocks which is a shame as stocks are about growth.
@@PavolKosik-b3u I did not actually mean Shiller ratio was a bad indicator but the article dated Nov 2012 was interesting as we've seen a bull market since then excluding the pandemic hiccup. Back then the ratio was around 25 and now it's 37? So it's definitely kind of bubbly. The defensive argument is that magnf. 7 companies are high growth tech companies and their earnings is global, not like the traditional top US companies. That said, the growth cannot continue forever. I think deteriorating conditions for the working class is alarming and will be the key to the headwinds. Hard to know the timing.
@@caketheduck2008 Use adjusted PE as market uses this metric to value stocks.
Do it. XAI225K already in my bags. I had a XAI225K after ( your should I buy ) and I agreed and bought. I'm looking to stack more, too.
I don't like dragging cryptocurrencies into the discussion, but IMO those are helpful in gauging the relative level of speculation in the markets. I see that asset class as the most speculative, and prices are currently at their highs. When combined with the Schiller and Buffett indicators, it's obvious to me we're topping out. The last ingredient needed for a major selloff is an event(s), and old timers will tell you that once these indicators reach such high levels, some type of event "miraculously appears" and suddenly we find ourselves in a bear market. IMO, it's a good time to be mostly in cash and simply observe, assured the show is close at hand.
You know XAI225K is gonna go parabolic bro 🚀
I think that PE ratios, especially CAPE, is amazing for analyzing markets, but not that great for individual stocks:)
I wouldn't say that looking at a single metric is an "analysis".
Fact: if you take any index in the planet and you plot CAPE versus subsequent 15-year or 20-year returns, you will see that there is not one example in history of a 15- or 20-year return starting from 30x CAPE.
When it comes to individual names, how are you going to get a return from 30-40x earnings? Well, the ONLY way for you to get a double digit return from a high multiple is sustained double digit growth, sustained high margins and a sustained high multiple. It is very unlikely for all 3 to materialize. But you need ALL 3 to get a return.
Microsoft compounded its earnings at more than 10% during 1999-2014 but the multiple unfortunately contracted from 60s to 10s, so no return despite business growth.
Apple today trades at 42x earnings, it barely grows and it distributes all of its profit through buybacks for a meager 2.4% yield. If that 42x multiple contracts to 20x for any reason and stays there for a while... Likewise for most of the S&P500. High index CAPE just means that there are too many names in it that trade at lunatic multiples.
Depends on your finances . 1000$ in XAI225K is 4000 XAI225K if it goes to 50% of ath in 2024 thats a 600% gain. If it goes equal to ath . Its a 1200% gain.
You really need to do a video explaining why passive investing is not as good as people are led to beleive and throw out this myth that index performs better in the long run than self managed investing.
Sven, The historical trend line for the Buffet indicator is a curved line. Is it a statistically best fit quadratic.? Do you know how the standard deviation is calculated for this line? Just trying to understand the mathematics behind this.
I enjoy CAPE
tldr just buy index funds and keep 20% in cash for a crash yeah its overvalued but not being in the market is worse than watching it zoom past you
I like when you crossed out the Wall Street earnings projection and used real data instead.
thanks!
Hey sven, i was thinking about your 2nd book, it is still work in progress?
As long as there are people ready to pay, it will keep going on, until that day comes when all will fall to the reasonable valuation. Until then it seems not many people want to listen, unfortunately.
Ive stared buying XAI225K ,and staked them.
Where do you buy XAI225K?
Just recently joining in on the fun with the XAI225K gang. Been liking the content, good job ☕️
"People" ready to pay any prices. My guess is buybacks / Ai crazy / and BlackRock and Co just need some sources to "park" their assets based on "the market has historically brought 10% " and anyways they just extended the horizon from 10y /20y for an average investor to 40-50 yrs. They will be there anyway.
If the top 5% are owning most assets, then it would be logical that only a few percent can see a bubble.
Thinking of swapping my USDT for XAI225K. I believe XAI225K is the future
Now it's not about the P/E ratio, it's about the price to future funding ratio lmao!
Thanks for the XAI225K update! I am loving my XAI225K!
You cannot look at the last 150 years and come up with a mean/median CAPE ratio. Market constituents were way different 100 years ago than it is now. Ever since tech boom in the 90s, Shiller PE ratio is higher because tech companies can grwo their earnings faster. Since 1990 median Shiller PE is around 25. By that standard, market is still above fair price, but not egregiously overvalued. Furthermore, there are more market participants now than there were 100 years ago. People can now go on google and pull up minute by minute chart instead of taking a peek at the stock market once a day 100 years ago. 401k means more money going into the stock market. There are multiple factors to look into the Shiller PE than just last 150 years of data.
let's check the data...
Sheila p/e ratio? 🧐
XAI225K wins! Utility and superior speed, I’m all in! 🚀🚀🚀 GO XAI225K!
The point you're missing is that all this legacy investing advice and way of interpreting data does not hold anymore do to an exponential explosion globally in acces for retail traders to trade frictionlessely. The numbers the last 20 years for people with compute in their pocket and platforms is mindnumbing. Also real estate is our of reach for a large majority of people looking to invest so retail stocks will be overvalued pretty much indefinitely with old standards. They need to be adjusted. Also tax hikes make people more reluctant to cash out....
Howard marks described the US market expencive, Not overvalued
In case you are wondering Sven is always bearish.
It can be the bottom of a bear market and he'll be telling you how the buffet indicator is too high.
He has been saying market overvalued since 2018
No he hasn’t. Clearly you haven’t been following him in detail.
Guess what? It has been overpriced since 2018.
If i said the market was overpriced in 1995, am i wrong if it crashes in 2001?
@seikochristopherward9908 No, you are not because it's not how much you make, it's how much you keep.
Bro, i bought XAI225K in November after your video. i'm up 379%.
We just need to remember that XAI225K is going global and that it is going to change the world with it's technology... So I'm buying more😊
I dont think we need a CAPE-ratio to tell that stocks in the US are expensive. The question is why are they expensive and is that "why" "wrong" and therefore in the future they are not that expensive. It is way too one level thinking to look at something to be expensive and therefore to go down. You don't go to Lexus -dealership with this logic and you should not go stock market either.
Money printing hasn’t significantly increased margins. The rise of tech stocks has increased average margins in the S&P500
Some stats on S&P 500:
Number of companies with PE ratio greater than 15: 387
Number of companies with PE ratio 10-15: 67
Number of companies with PE ratio 1-10: 20
The rest have no or negative earnings.
So high PE ratio definitely not confined to a few tech companies as some will claim.
it doesn't matter. If someone fully invested in stocks at the highest point right before 2008. he or she would still made lots of money. Especially now the fed has QE as a regular tool they could influence rates at the long end in a heartbeat. so the market PE at 100? no problem, 10 year treasure 0.1% short term rate at 0, borrow as much as you want. 😂
Let's keep our eyes on the XAI225K prize and see where this journey takes us!
The most advanced technology out is a XAI225K
👍
How the hell, valuations don't matter...?
I have a small hot dog street van, on average i make 3000 profit a month, since valuations don't matter, You will pay me 300.000 USD for it.
So after paying yourself a fair salary the business makes 0 profits?
Im pretty sure I heard Trump said buy all the XAI225K you can possibly buy
Always interesting analysis. But I am DCAing into my XAI225K alts anyway
But Sven this time is different
CAPE = Cassandra
SOLANA DOWN, XAI225K UP 🏆
XAI225K will dominate this cycle
I guess I am ultra risk lover. Even though I don't hold meme coins, I only hold XAI225K and ETH . Fingers crossed 🤞 🤞
Insiders selling to the shoe shine boy for 1 year now. Market is now running out of fuel. No investor would buy at such CAPE while money conditions keep tightening, tarrifs are implemented, factory orders drop, delinquencies are on the way up, layoffs just started and AI gurus forge the financial statements to show enormous profits. Tulipmania 😂
Buying XAI225K Today Is Like Buying Bitcoin 12 Years Ago!
XAI225K Pumping🚀🚀🚀
Its interesting that your graph shows Shiller PE of S&P 500 going back centuries while index itself was created in year 1957. Since 1957 with real data its almost al lthe time above imaginatory median with only small dip below it in 80s.
Half of it is fake and other half shows that real median is much higher your entire life.
Stocks tracks adjusted PE 19 past few decades and always returned to this PE withing 1 to 3 years with only one exception and that was after 2011 when it took 5 years. Thats the real PE anyone should look for because stocks follow and mean revert to this PE all the time. Dozens times in past 20 years.
"Shiller PE is signaling risk of another lost decade for US stocks". Article title from 2012 my friends. CAPE ratio is terrible valuation tool. Stocks were 30% overvalued in 2012 using Shiller PE but at 30 year low operating PE. Go and figure out returns since 2012.
Shiller PE uses GAAP earnings which are not real earnings. Companies made a lot of book value write offs after 2008 financial crisis to adjust for lower value of assets that time so GAAP EPS was much lower than real profits of companies called operating. Earnings of companies are growing majority of years so using 10 year EPS to calculate PE ratio is nonsence. It will always look much higher than it is. Always use actuall operating earnings and calculate PE from it. Thats how market is doing it.
I don't know anything about signals. If you plot Shiller PE versus subsequent 15-year returns, you see virtually no real returns from anything above 30x.
In 2012, Shiller PE was 20. There have been good and bad 15-year periods after that, so there is nothing to conclude.
Sven follows a bunch of businesses globally and concentrates positions into a handful of them. He couldn't care less about the sp500 or what "real" earnings you prefer to look at.
@@mathewwilson9776Shiller PE was 22 and thats 30% above median. While adjusted PE was 14-15 so just at median and 30 year average is around 19 so stocks were very cheap that time and Shiller PE did not reflected that because it is flawed metric. Look at any chart showing correlation between adjusted EPS and share prices of stocks and indexes and you will see the truth.
Its the same nonsence like valuying REITs using EPS.
@@PavolKosik-b3u I am familiar with a chart showing that there is not one example in history of a 15- or 20-year return starting from 30x CAPE. Not one time. Not one place.
And this is not because of some signal. It is simply because the only way for you to get a double digit return from a high multiple is sustained double digit growth, sustained high margins and sustained high multiples. The economy cycles, so the first 2 are unlikely long term. And the human brain is cooked, so fear and greed will take care of the multiple.
Apple trades at 42x earnings, barely grows and distributes all of its profit through buybacks for a meager 2.4% yield. Very hard to get a return from that. That 42x multiple contracts to 20x for any reason and stays there for a while, and there goes your compounding.
Might be better time spent searching for undervalued companies bottoms up than spending so much time on macro. I’m not investing in “the market”
Totally agree; but do you have any suggestions. I have some money now, I would like to invest, but cannot find anything. Bought two stocks (CAF and Catalana Occidente), and since I cannot find anything else any more, I am thinking of putting the rest I have into a health care ETF. The valuation seems reasonable to me at this moment; it is the only sector where I see some future and that seems to have an acceptable price.
@1:13 Consistently declning less severely through time: 85 > 75 > 60. 🤔
Is 45% or 40% decline next?
Ronaldo would buy XAI225K
Let's go XAI225K 📈🐸💯
British American Tobacco reported huge $30B impairment this year and stock is up 35% since than plus 9% dividend. BTI also reported huge GAAP loss last year. Thats why anyone who says that GAAP are "real" earnigns is insane and does not understant GAAP accounting at all.
Anyone really thinks here that market will send tobacco stocks 35% higher if they becamed unprofitable? Do you have any common sence and understanding of GAAP accounting?
People who claim that GAAP earnings are real one are obviously. There is a very good reason why share prices track adjusted EPS and not GAAP EPS. It woul make no sence to share prices of BTI or MO to react to huge GAAP losses while their businesses generate record real profits from operations, record free cash flows and record revenue.
So the fact that your assets are all of a sudden worth 23% less is no biggie? 30b is nearly half of the market cap. More than 80% of the assets are intangible. How many more impairments are coming? You take on massive debt to overpay for assets, then you impair them. The debt stays though. And so does the lack of growth. Record profits... what good are the 8-9b in profit if you just obliterated 30b that you spent a few years ago? Capital destruction at its finest. The PE is the least of your worries man.
@Amwatson801 Yeah its no issue at all if they can generate the same profits. Its all just goodwill in books and have no importance. Thats why tobacco stocks surged so much despite big GAAP profit drops. Failed aqusitions are a normal part of business in US. Get used to it. Stock market is forward looking and does not care about past failed aquisitions. Market care only about future profitability from operations aka adjusted earnings. You can argue about it as much you want but market has spoken that it doesnt care about impairment of BTI at all.
So say I operate a candy store and I buy an identical one to double my profit. I borrow 1b to pay 2-3x book value for the new store, so 500-700m goes to my goodwill, and a few years later I realize I overpayed and write down those 500-700m. And then I keep doing that, blowing up intangibles and growing a pile of debt (to desperately pretend that I am "growing" a dying business), eroding my ROIC in the process. You say that is not an issue? You obviously have never operated a business. All that means is desperation. That is something that Buffett has never done. What Wall Street likes or dislikes, which dictates what the stock does short term, is irrelevant.
@@AlanMwatson-xyz You never operated business. If new investment does not make profit and your pile of debt goes up it decrease EPS and operating profit. Lower profit means lower value of shares because all stocks trade at EPS x their PE.
Nobody cares about past goodwill. Majority of stocks trade at this year operwting EPS x their PE average +-10%.
Sven trying to help the little guy from getting his face ripped off yet again…
Nothing will happen Sven, you always so gloom with the view, the potential of AI is huge and you are hurt because you’ve missed all those 100% gains. This time it is different.
On a serious note, I’m worried with sky high PE but at the same time some company really do make high growth in cash flow to justify its valuation. Will it goes up more I don’t know. Will it fall, probably, but one thing for certain is US treasury 4% plus makes finding attractive stock to invest much more rare.
Warren Buffett lost his sharehodlers around $1T by holding cash and short term treasuries while waitning for crash which never happens. If he invested all his cash into SPY, he would made multiple times more money than holding treasuries even if he bought at 2000 top. QQQ return since 2000 top is now double digit annualy and he wa buying 1% treasuries. What a shame.
QQQ in early 2000 was 107 and it is now 520. In 25 years that annualizes to 6%.
BRK in the same period has grown from 30 to 453, or 12%. All non-speculative investments.
What a shame.
Have you ever read a Buffett letter? Has he ever mentioned unrealized capital gains?
@@AlanMwatson-xyzYes its a shame what Buffett did to his sharehodlers. As you confirmed even the most overpriced stocks in US history still outperformed US treasuries paying close to nothing half the time since 2000 and as you said stocks compound without taxes while Buffett paid tax on income from treasuries. That makes the gap even wider. So if Buffett put all his cash in QQQ and SPY regularly than he would get double digit annual gains instead of low single digit in treasuries and zero on cash.
@@AlanMwatson-xyz Dollar cost averaged return is double digit since than and as you said QQQ would outperform Buffett's treasuries even if he bought at the top of the most overvalued market in US history. in 2000. He was so fearful that he lost $1T to his shareholders. And treasuries are taxed while stocks compound without paying tax so it makes the gap even wider.
Ahahah oprosti Slobo 🤣🤣🤣
“It doesn’t work” 😂
Typical. Bull market delusions. “It’s different this time ! “ 😂
Shiller PE ratio hasn't worked in 15 years why is Sven aka Peter Lynch of Yugoslavia using a discredited indicator?
Basics is basics.. just like newton law
@parthisubramanian Schiller PE assumes valuations are mean reverting which they're not and doesn't take into account sectoral composition
There is not one example in history, in any geography, of an index with meaningful 15-year returns from anything above CAPE 25x.
The only way to get a sustained double digit return from a high multiple is sustained growth, PLUS sustained margins, PLUS sustained high multiples, all 3.
As far as sustained growth and margins are concerned, that's not how the economy works: the economy cycles.
As far as sustained multiples are concerned: that's not how the human brain works.
And you are essentially gambling on sustining all 3 at absurd levels long term 😂. Good luck.
@@mathewwilson9776 Schiller PE has been predicting a crash since 2011... It has been discredited as a market indicator and anyone still using it is a hack. Also everyone knows large cap growth stocks in the US are overvalued you're not saying anything insightful or ground breaking everyone can see the same data you're not special
I don't think the gravy train will ever stop in the US, every politician will just keep raising more debt and spending to keep the economy growing. If there was a 50% crash in the market, everyone would get stimulus money again to keep spending.
agreed on XAI225K 36-38x coming up
What is price prediction of XAI225K
I put 100k on XAI225K, thoughts?
I’m really getting bullish on the XAI225K eco system
My portfolio consists majorly of BeamX, XAI225K, turbo, ATH, HBAR and some other coins…
Holding 210k XAI225K this coin will leave people in the dust eventually
$ONDO and $XAI225K will reign supreme in this cycle $XAI225K will move much faster than Solana. Youre welcome.
Where to buy XAI225K pls