P/E vs S&P 500 (50 Years)

Take a look at this great chart of P/E versus the S&P 500.  It does a wonderful job of setting up the valuation question.  You can see what is wrong with it, even without looking for a better model.  The trailing P/E ratio method is poor both descriptively and prescriptivey — the two reasons we […]

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Don’t Fret the Inverted Yield Curve

For those interested in the complete text of the David Malpass report I mentioned yesterday, you can find it here, along with a lot of other good reading in the section on markets. Link: Don’t Fret the Inverted Yield Curve. David is one of the world’s best economists. Following by David Malpass, Cheif Economist, Bear […]

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Dr. John Rutledge on the Inverted Yield Curve

John Rutledge’s experience combines a strong academic background and front-line investment experience.  His writing is authoritative and persuasive.  If you missed him on CNBC, you can read his explanation here.  My readers will find both the argument and the implications for stocks to be familiar.  The explanation of the need to understand "why" is especially […]

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Hussman: Fed Action Won’t Boost Stocks

The problem with the comparisons John makes is that all of his "price/peak earnings" periods are not equal.  A valuation approach that completely omits interest rates leaves out the biggest asset allocation comparison faced by both managers and individuals.  Here’s the story, then I’ll elaborate. Link: Hussman: Fed Action Won’t Boost Stocks. Excerpt from John […]

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