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Category: Markets

“Lower interest rates justify a higher than average price-earnings valuation.” – Pundit You’ve heard the story before: Equity valuations are high… Interest rates are low…. Data sources for all charts/tables herein: Robert Shiller (http://www.econ.yale.edu/~shiller/data.htm) Ergo, high valuations are “justified” by lower interest rates. Why? Some argue that because stocks are the present value of future cash […]

Gold Bugs vs. Stock Market Bulls

Which is the better investment: Gold or Stocks? It’s a battle as old as markets. Gold Bugs and Stock Market Bulls are equally fervent about their investment of choice, often with complete disdain for the other side. The story (since the gold standard was completely abandoned in 1971) goes something like this… 1972-1980 Gold Return: […]

Records Are Made to Be Broken

  • Markets
  • Charlie Bilello

Viewing the New York City skyline from afar last month, I noticed something strange. I could no longer name a number of the tallest buildings. The Empire State Building, the Chrysler Building, and the World Trade Center were readily identifiable. But a new crop of skyscrapers had emerged from the shadows, seemingly overnight. After doing some […]

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The Next 7 Years

What returns are you expecting from stocks and bonds over the next 7 years? This is a question that GMO (one of the largest and most respected asset managers) attempts to answer on a quarterly basis. Their most recent forecast was downright depressing: -2.2% per year from large cap U.S. stocks and +1.9% per year […]

Moving Averages and Volatility

The Dow closed below its 200-day moving average this week for the first time in two years. That ended the longest streak above the 200-day moving average since 1987. At 501 trading days, it was the seventh longest run in history. Data Source for all charts/tables herein: Bloomberg, YCharts, Stockcharts.com. Note: all data in this […]