Recent content by crestmont

I'm not sure how to get the chart to reproduce, but it's missing important information that needs to be put into perspective. If you start the chart (EPS/GDP) in the late 1940s (as the prior quote/post does), then it relfects what could be 'normal' high levels that are similar to today. Yet if...

Several key points that I'd like to second: High starting P/Es are only a caution flag; not a red flag... Low P/Es are not a natural consequence of high P/Es...high and low P/Es are the consequence of economic conditions (primarily inflation) and to some extent the human component...however...

As far as history goes, all of the past secular bear markets ended with P/Es below 10...in really bad economic conditions. We've not had an extended period of stable, high P/Es to "demonstrate" the impact of 6.5% returns (which would actually provide success as long as there was not a big drop...

Without getting into the math and statistics, especially once assumptions are chained together to get a result (usually providing a distorted scenario), each person needs to determine their own risk parameter. For some, a 90% chance of success seems high. For others, they will see the...

Mortality tables or expected lifespan...for today's retiring couple, that's about 30 years on average for the last-to-die. But be careful, because that's an average and about half will live longer (thus needing it to last a bit longer). For each person or couple, you may want to look beyond the...

Ha, your comments deserve to be framed and mounted...that's a terrific explanation. There are two general types of comments that are emerging in this thread: (1) those that see the fundamental relationships and principles of economics and finance and the impact of them on stock market (and...

Let's visit the second question first: The secular cycle analysis is not intended to determine when to enter and exit the market (and I don't use it that way). Rather, it is to provide a general perspective on the level of returns that can be expected. It does not take us in or out of the stock...

Actually, the impact of reinvestment is attributed to the dividend category of total return. I believe that's why Ibbotson's tally reflects 4.5% from dividends. It doesn't get allocated to EPS growth or P/E change...starting valuation does impact the future impact from dividends. Nonetheless, as...

Yes, you are correct that the effect from P/E expansion over the 80 years was < 1%, but if the series had started when P/Es were at today's levels, the dividend yield component of total return would have been more than 2% (200 bps) less. The level of valuation (i.e. P/E) directly impacts the...

Note that the chart is Total Return (Index + Dividends) adjusted for inflation. Since there are only 3 sources of return from stocks: (1) EPS Growth + (2) Dividend Yield + (3) P/E Change, the chart is actually showing us Real EPS Growth + Dividends (since the impact of P/E changes, if any, over...

Please keep in mind that the most-often quoted data--Ibottson's Annual Yearbook--only reflects long-term returns of 10% because the series starts in 1926 when P/Es were 10.2 and ends when P/Es are almost twice as high. Starting P/E impacts the dividend yield component of total return as well as...

I'm not sure how to reflect referenced quotes (or for that matter, why I have a problem with dryer sheets!!!), but I think the SWR issue is impacted by the interaction of the withdrawal rate and the bond rate (i.e. as the initial withdrawal rate declines, it takes a lower bond yield to provide...

Hello, this is Ed Easterling. Hope you don't mind if I post a few comments for your consideration. First, I've enjoyed reading your thread today...there are sure a lot of interesting comments and thoughts. As several have noted, it was not my intention to (1) present a bullish or bearish view of...