Comments for Greenbackd

Comment on Look Out Below: Global Graham / Shiller Cyclically Adjusted PEs Still Expensive by burton rothberg (@east60s)

burton rothberg (@east60s) — Fri, 01 Jun 2012 16:20:30 +0000

If you look at US nonfinancial 10-year PEs, valuation looks much better. The hit the banks took in ’08 makes the difference.

You have to ask yourself: “was that a one-in-ten year or a one-in-75?”.

Comment on How to estimate the long-term return on stocks: What does the future hold? by greenbackd

greenbackd — Fri, 01 Jun 2012 14:23:33 +0000

Awesome. Thank you.

Comment on How to estimate the long-term return on stocks: What does the future hold? by Andrew Miller

Andrew Miller — Fri, 01 Jun 2012 14:01:38 +0000

You have to adjust buybacks for net stock issuance as well to get to the net stock buybacks. These have averaged around .7% of market value per year. However, the average timing of buybacks have been awful (look at the amount of stock bought back in 2007 and how little was bought back in 2009). This figure should be discounted to account for the wealth destruction of when the buybacks occur.

Comment on How to estimate the long-term return on stocks: What does the future hold? by Andrew Miller

Andrew Miller — Fri, 01 Jun 2012 13:59:59 +0000

First – The 5.2% estimate is derived from the average of several methods that he uses, only one of which is the dividend yield method (other include cyclically adjust earnings and his own method of forward earnings).

Second – You have to normalize the dividend to about 50% of normalized earnings. Hussman has several posts on his website about that (you have dig to find them).

Take the most current Shiller P/E ratio of 20.29 (using May cyclically adjusted earnings and last nights S&P 500 price) and take the inverse to get the earnings yield (4.927%). Multiply this by .5 to get the normalized dividend yield (2.46%). Use this figure as the starting dividend yield and 3.7% as the terminal yield as this is the now current historical average dividend yield (confrim with Shiller data). This should give you an estimate of about 4.8%.

Lastly – If you are so inclined, you can use buybacks, but ONLY USE NET BUYBACKS! These have averaged about .7% per year. Most companies buyback stock at the wrong time so you could probably discount this further to account for the wealth destruction of their timing.

Comment on How to estimate the long-term return on stocks: What does the future hold? by Ardan

Ardan — Thu, 31 May 2012 21:57:22 +0000

What, you just ignroe buybacks? Buybacks have become much more popular in the last decade.

Comment on How to estimate the long-term return on stocks by How to estimate the long-term return on stocks: What does the future hold? « Greenbackd

Thu, 31 May 2012 16:23:20 +0000

[...] Comments « How to estimate the long-term return on stocks [...]

Comment on Searching for Rational Investors In a Perfect Storm: Value Investing Through 1999-2003 by greenbackd

greenbackd — Sun, 27 May 2012 15:12:48 +0000

Thank you.

Comment on Searching for Rational Investors In a Perfect Storm: Value Investing Through 1999-2003 by omar11578

omar11578 — Sat, 26 May 2012 16:50:07 +0000

10-year period ending 5/25/12 was more of a mixed bag. The S&P 500 returned 4% per annum. The funds returns were as follows: LLPFX (3.3%); CFMIX (0.8%); SGENX (10.6%); TEBIX (3.7%); OAKLX (3.9%); TWEBX (3.2%); LMVTX (-0.4%); FPPTX (7.6%); SOR (6.35%); & Oak Value now RS Capital Appreciation (2.7%). 3 for 10 over the past 10-years. Concentration hurt some of these managers in 2008. Others were just not value investors (Bill Miller). Oak Value lost a manager to death. The managers that were close probably didn’t own apple which has been a big part of the S&P’s performance over the past 5-years especially. I think the longer-term record for most still means more than the past 10-years. “All successful investing is value investing.” -Bruce Greenwald.

Comment on Searching for Rational Investors In a Perfect Storm: Value Investing Through 1999-2003 by Steve Casner

Steve Casner — Fri, 25 May 2012 17:04:18 +0000

But how did these same value funds that walk the walk do from 2003 to 2012? Did they have the same management throughout? If management changed, why?

Comment on Dividend Yield Doesn’t Work, What Does? Three Key Conclusions by Wednesday links: act accordingly | Abnormal Returns

Wednesday links: act accordingly | Abnormal Returns — Wed, 23 May 2012 17:24:41 +0000

[...] On the uncertain value of using dividend yield. (Greenbackd) [...]