Search results

The gordon model is nice because it tells you how much more to pay for an asset when the growth rate increases. Most people dont use it but they do use things like Discounted Cash Flows (DCF). Most analysts, fund managers and stock pickers will at least look at DCF when valuing a stock. If the...

On a forward earnings yield basis the market is valued at 5.8%. So the total return of this market would be 5.8% plus growth That looks pretty attractive. Not saying, bear markets or recessions have been outlawed and they cant happen again but it appears to me that the upside looks pretty good...

My baseline scenario for US stocks is that they make a new all-time high in a closing basis in a few weeks/months and they dont look back

In a Shiller PE basis, US stocks are not cheap with a 25 multiple. But that if you expect mean reversion in profits. With regulatory and tax reform (the easy reforms that all Republicans agree should be done), profits are likely to do fine. Without profit margin mean reversion, then the forward...

I was worried about US stocks because of valuations and a Fed that was hiking risk free rates when everybody was valuing stocks relative to those rates But I really think this Trump thing might have changed the game. Now that rise in the risk free rate (or, you might call it cost of...

Made a quick look at my positions now and came up with this: BR USD bonds 16.6% EWZ and EWZS 16.5% Cash 14.5% BRKB 12.3% PSH 11.4% GLD 5.5% UST 15y bonds 5.4% Brazil REITs 4.6% OAK 4.5% VRX 1.8% GDX/GDXJ 1% GREK 1.6% FMCC 0.8% EWZ put shorts 0.3% BRKB put shorts 0.01% Total stock longs (not...

If the reforms are badly done, then all the expected growth will come from inflation, which the Fed will offset by hiking risk free rates so there will be no net improvement. In that case, the fair value for equities doesn't rise. But it will be hard for that to happen, just by reducing...

So, it might not be a big deal if interest rates continue to rise, as a long as expected growth rates are also on the rise by a bigger amount. Its the net 'improvement' that matters and if the reforms are well build, there should be an improvement in that net amount

So the Gordon dividend model teaches that Price of the stock = Dividend next year / RequiredReturnOrCost of Capital - Expected Growth Rate If you apply that to the index using a expected SPY Div of $44 and a expected growth rate proxy of NGDP growth of 4% (2% real, 2% inflation for the...

I will probably never see BRKB in the low 140's again in my lifetime

http://seekingalpha.com/news/3223978-ironic-twist-berkshire-stock-buffett-wealth-surge-thanks-trump?uprof=44#email_link

The reason I bag held those USTs a bit is something I mentioned before, we are all short real income by the fact that we are born and need that to pay for expenses. When nominal and real rates rise like that, that benefits us so much because we can now put capital to work (both current cash as...

https://www.greatagain.gov/policy/trade-reform.html " Trade Reform Free trade is good as long as it is fair trade. American workers are the best in the world. On a level playing field, we can compete, and win. Yet, too many American jobs have been lost over the last decade because of trade...

US NGDP growth was around 3% and languishing before the election. The Fed was unwilling to prop this up (to the historical 5-6%) because of fears of creating excessive risk taking, potential inflation and things like that, a lot of market monetarists criticized the Fed for not picking up that...

And how about those UST bonds? Falling off a cliff! I never put my bund/buxl short, IB only allowed me to trade bunds this wednesday and I got no interest in chasing this market down Gundlach says he likes TIPS, there is another interesting place to park some cash. I probably should have...

Jamie Dimon was asked for UST secretary. He wont take it but he is a free trader. Maybe Trump is trying to send a message? “We shouldn’t hold back the progress from trade and technology. But it’s fair to lift up the people that were hurt by it, as opposed to killing the golden goose,” Dimon...

Well, maybe I'm in a special situation. I feel like I know Brazil pretty well, so I dont need a stop. But I wouldnt necessarily sell out in more unknown markets in this trump panic. Its such a small negative catalyst compared to things like a banking crisis (like in 2009). I bet we will look...

There are risks, however, when you are paying 10x CAPE the downside is trumped by the upside. From a valuation point of view, things are good. From a sentiment, I still see a lot of skepticism over the brazilian future. Things are not as bleak as they were at the lows but the market is still...

I could think of some real reasons for BR stocks to fall. This trump thing is like the most ridiculous one. The Brazil story has been so internally driven (because of politics, real rates, economy) that I dont think this will matter at all

Added some more EWZ today, I will wait till markets calm down to give a breakdown of my exposures again. FX is moving around so much I dont even know what is going on there anymore