Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-11-2014, 06:23 PM   #41
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,071
Quote:
Originally Posted by dallas27 View Post
Taking it further, i ask myself is firecalc even valid since it focuses on us data only, the most successful country in the last century. Theres no reason to assume the USA will be the most successful in the future, or that the average of global stocks will match what the US did the last hundred.

People will scoff at that. Doesn't make it wrong, or right.
Doesn't matter. There's an asteroid out there with our name on it...
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-11-2014, 07:46 PM   #42
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Quote:
Originally Posted by REWahoo View Post
Doesn't matter. There's an asteroid out there with our name on it...

I don't think thats exactly the same thing, not even probabilistically.




Sent from my iPhone using Early Retirement Forum
__________________

__________________
dallas27 is offline   Reply With Quote
Old 08-11-2014, 07:54 PM   #43
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,071
Quote:
Originally Posted by dallas27 View Post
I don't think thats exactly the same thing, not even probabilistically.
You absolutely certain of that?
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 08-11-2014, 09:51 PM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,252
Quote:
Originally Posted by dallas27 View Post
Taking it further, i ask myself is firecalc even valid since it focuses on us data only, the most successful country in the last century. Theres no reason to assume the USA will be the most successful in the future, or that the average of global stocks will match what the US did the last hundred.

People will scoff at that. Doesn't make it wrong, or right.


Sent from my iPhone using Early Retirement Forum

The US might not be the most successful country if measured by stock returns... but I think that it will be a huge force in the world economy as long as you and I are alive....

We are so much larger than a lot of other countries... it would take many many years of decline on our part added to unbelievable gains on theirs... this might happen over a couple of hundred years.... but not the next 30 to 50...

Of course an asteroid can come crashing down in the middle of the country and speed up the decline... but I am not going to worry about that one...
__________________
Texas Proud is offline   Reply With Quote
Old 08-11-2014, 10:10 PM   #45
Thinks s/he gets paid by the post
Htown Harry's Avatar
 
Join Date: May 2007
Posts: 1,516
Here's an interesting chart on the US economy relative to other countries. The total area for each slice represents the country's GDP. The U.S. is indeed the world's largest economy on both an aggregate and per capita basis, with China following as second largest in aggregate.

Hard to say if it proves or disproves Texas Proud's hypothesis...

The World Bank summed up the entire global economy in one chart - Vox
__________________
No doubt a continuous prosperity, though spendthrift, is preferable to an economy thriftily moral, though lean. Nevertheless, that prosperity would seem more soundly shored if, by a saving grace, more of us had the grace to save.

Life Magazine editorial, 1956
Htown Harry is offline   Reply With Quote
Old 08-11-2014, 10:35 PM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,252
That is per capita... here is total.. China will pass us by in total sometime, but I do not think they will come close to per capita...

Also,

Gross domestic product 2013
(millions of
Ranking
Economy
US dollars)
1
United States
16,800,000
2
China
9,240,270
3
Japan
4,901,530
4
Germany
3,634,823
5
France
2,734,949
6
United Kingdom
2,522,261
7
Brazil
2,245,673
8
Russian Federation
2,096,777
9
Italy
2,071,307
10
India
1,876,797
11
Canada
1,825,096
12
Australia
1,560,597
13
Spain
1,358,263
14
Korea, Rep.
1,304,554
15
Mexico
1,260,915
16
Indonesia
868,346
17
Turkey
820,207
18
Netherlands
800,173
19
Saudi Arabia
745,273
20
Switzerland
650,782
21
Argentina
611,755
22
Sweden
557,938
23
Nigeria
522,638
24
Poland
517,543
25
Norway
512,580
California would rank 10th

Texas would rank 16th
__________________
Texas Proud is offline   Reply With Quote
Old 08-12-2014, 12:09 AM   #47
Full time employment: Posting here.
CaliforniaMan's Avatar
 
Join Date: Dec 2013
Location: San Diego
Posts: 846
A couple of books I have read recently which get to the heart of the question of the American decline, "The Upside of Down" Charles Kenny talks about why the rise of the rest of the world does not equate to any required fall in the growth or standard of living in t he U.S. As an example look at the standard of living for the masses in the U.K. now vs. when they were masters of the world.

Another is Kurtzman's "Unleashing the Second American Century." His four points of why America will likely remain on top: 1) Soaring levels of creativity, 2) Massive new energy reserves, 3) Gigantic amounts of capital, 4) Unrivaled manufacturing depth.

Lots more in both of those books, good reads that I would recommend.

Since the beginning of the republic there have been predictions of America's eminent decline. My bet is that there is still a lot of life left in the old gal, it is not even certain that we have seen the best yet. And given the degree of risk in investing elsewhere, investing in the U.S. still seems to be a pretty good bet to me.

And as Texas Proud points out, worst case, our size and inertia should keep things going for the next few decades at least.
__________________
Merrily, merrily, merrily, merrily,
Life is but a dream.
CaliforniaMan is offline   Reply With Quote
Old 08-12-2014, 06:46 PM   #48
Recycles dryer sheets
 
Join Date: Apr 2008
Posts: 223
I would use the PE10 to decide where in the world to invest, as a comparison, but there is not accurate publicly available data on companies outside the US, thus making it very difficult to come up with PE10 numbers. Even if you look at websites like Yahoo and Morningstar, you get different numbers when look at such data on different countries. Plus there is some strange calculations by some data providers in which negative earnings are treated as positive earnings, which really skews the results.
__________________
inquisitive is offline   Reply With Quote
Old 08-12-2014, 08:53 PM   #49
Confused about dryer sheets
 
Join Date: Jul 2014
Location: jersey city
Posts: 4
For your reference, CAPE Ratio this website provides shiller PE for individual US stocks and the newsletter gives list of best 25 stocks, as in with the lowest Shiller PE.
__________________
nm796 is offline   Reply With Quote
Old 08-22-2014, 01:19 PM   #50
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,705
I meant to post this link earlier. It lists CAPE for various countries. Food for thought, I suppose.
http://www.starcapital.de/research/stockmarketvaluation
__________________
target2019 is offline   Reply With Quote
Old 08-22-2014, 02:13 PM   #51
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Does the cape ratio hold water in non-us markets?


Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 08-22-2014, 03:55 PM   #52
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,818
Quote:
Originally Posted by target2019 View Post
I meant to post this link earlier. It lists CAPE for various countries. Food for thought, I suppose.
Global Stock Market Valuation Ratios (Shiller PE, CAPE, PB...)
Excellent addition to the non-US angle in this thread. Thanks!
__________________
sengsational is offline   Reply With Quote
Old 08-23-2014, 09:02 AM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,252
I think that the biggest problem I have with this method is that it is using the last 10 years of profits to 'predict' the next 10 or more... I just do not see how they are correlated....


Using the work CAPE ratio.... the best country to invest in now is Russia.... how many people are going to take THAT advice


Edit... opps... missed Greece which has the lowest number... but still same question
__________________
Texas Proud is offline   Reply With Quote
Old 08-23-2014, 09:29 AM   #54
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Quote:
Originally Posted by Texas Proud View Post
I think that the biggest problem I have with this method is that it is using the last 10 years of profits to 'predict' the next 10 or more... I just do not see how they are correlated....


Using the work CAPE ratio.... the best country to invest in now is Russia.... how many people are going to take THAT advice


Edit... opps... missed Greece which has the lowest number... but still same question
Greece, (and italy) have terrible markets right now. I would absolutely invest in them. I am exposed through broad ETF's already, but I would place a extra bet if the right, low cost ETF were available. High unemployment, many friends in the EU, and access the Med see and EU markets. Rebound is inevitable.

Russia is a different story, as you have a political uncertainty that is highly volatile and makes a long term bet much more risky than greece. That said, I am exposed to russia as well.
__________________
dallas27 is offline   Reply With Quote
Old 08-23-2014, 09:52 AM   #55
Full time employment: Posting here.
 
Join Date: Jan 2013
Posts: 660
Quote:
Originally Posted by target2019 View Post
I meant to post this link earlier. It lists CAPE for various countries. Food for thought, I suppose.
Thanks for the link. I have seen similar country by country comparisons before. They were one of the factors that convinced me to increase my international exposure, especially to emerging markets, earlier this year. It's not at all clear that this is the right move, but it's my attempt to find relative bargains at a time when there are so many warnings about extremely high prices in both U.S. equity and bond markets.
__________________
karluk is offline   Reply With Quote
Old 08-23-2014, 05:33 PM   #56
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,705
If you look at CAPE for foreign markets, or even PE, keep in mind the wide disparity in how companies report earnings.
__________________
target2019 is offline   Reply With Quote
Old 08-23-2014, 08:55 PM   #57
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,673
Quote:
Originally Posted by target2019 View Post
If you look at CAPE for foreign markets, or even PE, keep in mind the wide disparity in how companies report earnings.
Right! Single data points in time are not enough. What about country inflation? Unemployment? Relative interest rates, etc.
__________________
Lsbcal is online now   Reply With Quote
Old 08-23-2014, 09:55 PM   #58
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 924
https://www.gmo.com/America/CMSAttac...8UAGtIt6BuU%3d

Above is a Feb 2014 article from GMO, basically concluding that CAPE has been a way to determine valuations, and that the US markets are in overvalued territory, European and especially Emerging offer better value.

While CAPE doesn't predict what the market will do in the near term, it has had a pretty good record at helping figure out the probabilities of what my biggest concern is at this point in my life, suffering a significant "drawdown". Low CAPE, very low chance of a big decline, high CAPE...




Sent from my iPad using Early Retirement Forum
__________________
In theory, there's no difference between theory and practice. In practice, there is. YB
gcgang is offline   Reply With Quote
Old 08-25-2014, 05:44 AM   #59
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,705
Quote:
Originally Posted by gcgang View Post
https://www.gmo.com/America/CMSAttac...8UAGtIt6BuU%3d

Above is a Feb 2014 article from GMO, basically concluding that CAPE has been a way to determine valuations, and that the US markets are in overvalued territory, European and especially Emerging offer better value.

While CAPE doesn't predict what the market will do in the near term, it has had a pretty good record at helping figure out the probabilities of what my biggest concern is at this point in my life, suffering a significant "drawdown". Low CAPE, very low chance of a big decline, high CAPE...




Sent from my iPad using Early Retirement Forum
Is that the article, "A CAPE Crusader?"
__________________
target2019 is offline   Reply With Quote
Using Shiller PE to Time the Market
Old 08-25-2014, 02:35 PM   #60
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 924
Using Shiller PE to Time the Market

Yes, that's the title, A Cape Crusader a Defence Against the Dark Arts.


Sent from my iPad using Early Retirement Forum
__________________

__________________
In theory, there's no difference between theory and practice. In practice, there is. YB
gcgang is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What Do Tobin's Q and Shiller's CAPE Say About Current S&P Valuations? haha FIRE and Money 50 01-17-2010 04:13 PM
Shiller on the housing bubble twaddle FIRE and Money 18 09-06-2007 06:49 PM
Shiller - "We now have a Real Estate Bubble"...... Cut-Throat FIRE and Money 29 04-11-2005 06:20 PM
Shiller Questions Bush Plan on Soc. Security intercst FIRE and Money 4 03-25-2005 06:08 AM
Shiller Data bongo2 FIRE and Money 5 06-23-2004 12:50 PM

 

 
All times are GMT -6. The time now is 01:39 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.