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his theory that savers will boost the economy doesnt seem right. he is not taking into account all the extra interest payments from people that have debts or get into debt. mortgage rates for instance, are up quite a bit

Brazil is a good example of this. Historically it has needed a lot of real interest rates in order to stabilize inflation. Sometimes even double digit real rates. That's due the fiscal issues, bad reputation, lower quality of institutions, hyperinflation history and instability. The Fed thinks...

The Fed's 'longer run' projections are Fed funds: 2.5% - 3.8% (2.8% - 3% is the 'central tendency') Inflation: 2% GDP:1.6% - 2.2%(1.7% - 2% is the central tendency) So the Fed is down on the Secular Stagnation thesis. A good way to monitor if the Fed will kill the stock market is to look at...

And of course, after 20years, this doesn't stop. You continue to collect those benefits. The effect of compounding is geometrical. That explains why stocks are so sensitive to growth rates

A $18 Trillion economy is worth $25.920 Trillion in 20 years compounded 2% real growth but it is worth $28.551 in 20 years compounded at 2.5% real growth a 10% real difference

There is also the supply side argument that better GDP growth in the long-term is disinflationary. As a long as the US achieves a way out of Secular Stagnation, equities will be worth a lot more. Even if to achieve that, there a pop in inflation that the Fed hikes to counter it. Those hikes are...

If inflation does pick up, there is one bad element to this that's the Fed will hike 1-1 any increase in inflation (so an extra 0.5% in risk free rates for any 0.5% increase in inflation) but the growth might only show up in that 1-0.75 ratio. So for every 0.5% increae in inflation, US profits...

So when people get scared that bond yields are rising and that could kill the stock market, they need to consider why they are rising -If its because of inflation, it isn't such a big deal given that stocks will get even higher profit growth coming from that inflation. If the burst in inflation...

I think there is probably a 50% chance they achieve a 0.5% improvement in long-term growth. Of which 75% would become profit growth So SPX would be worth X = 51.5/0.0647-0.04375 X = 2458 I think that's a resonable target, get the market there without Trump delivering anything and I will talk...

My figures will almost certaintly turn out to be off, I dont think they are that important. I think what's more important is the 'valuation gap' RANGE thesis. So maybe I'm wrong and there is no 39% valuation gap, perhaps it is 20% or 30% or 35%, point is, the way equities are valued, IF there is...

I recalculated the Gordon model to take into account that 1% rise in GDP is only likely to lead to a 0.75% growth in profits. The final output was this a 0.1% rise in GDP leads to a 3.23% to a 4.36% gain in the index. There is a total of 39% of upside in the market. That upside is in ADDITION...

"I believe we are mired in a slow-growth economy. Regarding the strong dollar, 44% of S&P 500 revenue comes from overseas. Non-U.S. profits are about 20% to 25% of the total" http://www.barrons.com/articles/stocks-could-post-limited-gains-in-2017-as-yields-rise-1484376687 So my Gordon estimate...

I defended John Hussman in the past but that was only because I was still developing my ideas about stocks. Time has reveled plenty about the folly of his approach. But even less bad investors like Jeremy Grantham seem to be falling for things like predicting valuation contraction. Against this...

Pretty cool. If one looks at a range of valuation metrics like this guy's, Siegel NIPA CAPE, my Gordon derived estimate or Forward PE ratios, things aren't that bad at all. To me a pretty big clue that the gloom and doom folks are wrong is to consider that stocks are real return assets. They...

Now, there are some complexities around profits driven from overseas. Not all of the growth will flow directly to the companies as they derive some revenues from outside the US so presumably, World GDP growth is more important than US GDP growth for that segment. But the numbers and the...

The Gordon dividend model is simply a rational way to value equities. Discounted cashflows show a similar kind of sensitivity to the long-term growth rate. To count on the market not realizing the obvious (more growth is good for growth driven financial assets) is very dangerous, very dangerous...

So I decided to re-run the numbers with the Gordon Model to see how much more are stocks worth when the growth rate rises. Pre-election, lets assume a fair value of 2150 on the SPX. Thats where the price seemed to be hoovering around before the election got close and thing got wild. At that...

-Capital controls -Costs to access foreign assets (FX costs, legal costs, tax costs, etc) -FX risk (all of the sudden that 90% can fluctuatle widely). As a matter of fact, in my own country (Brazil) there was some periods where the dollar fell by 40-50% against the domestic currency, the one the...

Because he is read around the world and if he means US T-Bills only, then he needs to state that. What about the people that own government bills from countries that don't have as good track record? Are they out? Are they in? What does his readers in Bangladesh ought to do? Furthermore, I can...

People define things differently but Taleb was giving his 'view of the world' on Antifragile, what is risky and what is safe, convexity, etc. He could have given his own take instead of throwing a bomb and then going silent