Chart of the Day

[NW-Bound]

It is true that dividend yield after the crash of 1929 was a lot higher, at around 5% on the average. The P/E was also lower, at around 15.

The P/E expansion that pushes the P/E to its value of 45 right now also depresses the dividend yield to 1.36%.

Even if the P/E contracts, there's hope that companies will not cut dividends. You can then ignore the value of your investments, and just live off the dividend.

Say hello to the WR of 1.36% of your current stash.

If the stash shrinks to 1/2, then the same dividend becomes 2.72%. Or if the P/E drops from 45 to 15, the stash becomes 33c on the dollar, and the dividend yield becomes 4.08%. That puts us back to the way things used to be.

I don't think this will happen overnight. It would cause a fatal shock to the system. If it took 20 years (1980-2000) for the P/E to expand, it hopefully will not contract suddenly. It will be gradual, so people have time to adjust, and to tighten their belt.

 

[Running_Man]

It is true that dividend yield after the crash of 1929 was a lot higher, at around 5% on the average. The P/E was also lower, at around 15.

The P/E expansion that pushes the P/E to its value of 45 right now also depresses the dividend yield to 1.36%.

Even if the P/E contracts, there's hope that companies will not cut dividends. You can then ignore the value of your investments, and just live off the dividend.

Say hello to the WR of 1.36% of your current stash.

If the stash shrinks to 1/2, then the same dividend becomes 2.72%. Or if the P/E drops from 45 to 15, the stash becomes 33c on the dollar, and the dividend yield becomes 4.08%. That puts us back to the way things used to be.

I don't think this will happen overnight. It would cause a fatal shock to the system. If it took 20 years (1980-2000) for the P/E to expand, it hopefully will not contract suddenly. It will be gradual, so people have time to adjust, and to tighten their belt.

These are all excellent points and you hopefully are right if this turns out badly, but I think the ability of an economy to withstand a major economic contraction and still go forward is underestimated.

 

[Running_Man]

 

[jschner]

In Jan 2021 things seemed to rotate from tech to value stocks. Now it appears some are rotating back into tech. One stock in particular that I have been accumulating a lot of shares of is $ENPH. If the last 4 years are an indicator of things to come, possible good things ahead. Bouncing off the 200 again, but watch the gap above the 50.

 

[Running_Man]

 

[target2019]

Growth and Value became disconnected in this recession. Do I have that correct?

 

[Running_Man]

Growth and Value became disconnected in this recession. Do I have that correct?

Not exactly, directionally they move the same, intensity is great than the displacement in dot com boom by a factor of two.

 

[Running_Man]

 

[Running_Man]

https://alfred.stlouisfed.org/series?seid=RRPONTSYD&utm_source=series_page&utm_medium=related_content&utm_term=related_resources&utm_campaign=alfred

When do Repurchase Agreements get to 2 trillion?

 

[Running_Man]

 

[Running_Man]

 

[Running_Man]

 

[aja8888]

Even though I don't see the chart, I did try to quote you and saw the image file. Nuts on the call options...wow.

 

[aja8888]

Try this one on for size:

 

[Running_Man]

https://pbs.twimg.com/media/FEvM01ZWUAMKAOe?format=png&name=medium

Spain is paying 236 Euros per MWH for their electricity tomorrow for the spot market for anyone short on Electricity to meet contracted demand.

 

[aja8888]

https://pbs.twimg.com/media/FEvM01ZWUAMKAOe?format=png&name=medium

Spain is paying 236 Euros per MWH for their electricity tomorrow for the spot market for anyone short on Electricity to meet contracted demand.

Wow!

 

[Running_Man]

Try this one on for size:

View attachment 40955

It is truly unbelievable to see nearly a trillion in Margin debt but I would suppose this is what happens when the market explodes from 15 trillion to 50 trillion.

 

[aja8888]

It is truly unbelievable to see nearly a trillion in Margin debt but I would suppose this is what happens when the market explodes from 15 trillion to 50 trillion.

This is going to be something to see when everyone starts running for the exits at the same time.

 

[pb4uski]

Isn't that along the lines of what happened during the Great Depression?

 

[Running_Man]

Isn't that along the lines of what happened during the Great Depression?

Margin Debt topped at 8 % of GDP in 1929 which would be 1.6 trillion today. It rose rapidly from 6 % to 8% before dropping all at once, so it is a self correcting problem.

 

[Running_Man]

Really amazing that the actual outstanding debt per citizen is 90K (95K if include state) while liability for every citizen is 500K

 

[Running_Man]

Really amazing that the actual outstanding debt per citizen is 90K (95K if include state) while liability for every citizen is 500K

website live here
https://www.usdebtclock.org/

 

[Theo]

Just realize that no-one is ever going to be asked to pay it back.

 

[Running_Man]

Multi Year Commodities breaking out of long term channel.

We are now 14 months past this point and now Commodities are exploding in price to where a nickel now has 10 cents worth of metal in it.

 

[aja8888]

Here's my chart of the day (nickel futures):