Search Results for: return on equity

The following chart shows the distribution of future return assumptions that state and local pension funds were using to value their liabilities as of February 2017: The average expected return was around 7.5%. How can any large fund, much less … Continue reading →

In late December of 2010, with the S&P 500 pushing through the mid 1200s on the heels of QE2 exuberance, my favorite financial economist–the great Robert Shiller–made what will likely turn out to be a very inaccurate prediction.  To be … Continue reading →

Of all the arguments for a significantly bearish outlook, I find John Hussman’s chart of estimated future equity returns, shown below, to be among the most compelling.  I’ve spent a lot of time trying to figure out what is going … Continue reading →

The following chart shows nominal total equity returns in local currency terms for select developed market countries from the beginning of January 1970 through the end of August 2013. The UK is way out ahead of the pack, almost doubling … Continue reading →

If you had invested $100,000 in Altria Group ($MO) on March 31st, 1980, and reinvested the dividends, the position today would be worth $93.6MM–a 21.0% annualized return. If you had invested the same amount in Berkshire Hathaway ($BRK-A), the position … Continue reading →

From January of 1933 through July of this year, beer companies produced a real, inflation-adjusted total return of 10% per year. Steel companies, in contrast, produced a return of 5%.  This difference in performance, spread out over 82 years, is enormous–the … Continue reading →

In this piece, I’m going to do five things: First, I’m going to clarify the purpose of Total Return EPS, what it’s trying to accomplish.  In a single sentence, the purpose of Total Return EPS is to convert dividends into … Continue reading →

In this piece, I’m going to present and explain a simple, easy-to-understand method of forecasting stock market returns on the basis of valuation.  I’m then going to insert the popular Shiller CAPE into the method to assess how well the historical predictions … Continue reading →

In prior pieces, I’ve stated that I think the S&P 500 at around 1775 can return between 5% and 6% per year over the next 10 years, a number that is significantly more attractive than the yield offered by the 10 year … Continue reading →