Loved the Salmon picture, by the way.
Chuck-Lyn had this post on Gordon Equation from another thread:
<beginning of quote> checked the link you provided above. It states that
real dividend growth is roughly 2-3% per year. If
we use 2.5% real then the Gordon model projects
1.56% + 2.5% = 4.06% real for TSM, or about 7%
if you add back in inflation at 3%. The earnings
model cited in your link projects 4.7% real or about
7.7% with inflation. Both numbers suck but we have
to live with them, I suppose. <end of quote>
That falls in line with what I use, and I got it from Warren Buffet a few years ago -- basically 7% nominal, 4% real returns from equities. I do have value and small tilts, along with international (plenty of emerging markets) so I give myself a bit of a bump from these sometimes hard-to-accept numbers.
Now are we optimists, realists, curmudgeons or pessimists for using these projections?