July 13, 2020

It Depends

Stock market valuations may not make sense to a lot of people right now but valuations often don’t matter much in the short run. Take a look at the average one-year returns for the S&P 500 from various starting CAPE ratios going back to 1926: Lower than average valuations show substantially higher average returns but the average one-year returns are actually better for the higher than 25 and 20 to 25 levels tha...

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“Just because you’re buying stock, doesn’t mean you’re an investor”

Get The Compound delivered to your inbox! Josh here – in the mid 1960’s, investors decided that there was a group of fifty growth stocks whose outlook was so bright that it didn’t matter what price you paid for them, as long as you were buying. By the early 70’s, they were learning a critical lesson about starting valuation – McDonalds, Coke and Procter & Gamble did indeed have a very br...

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Animal Spirits: The Future of Education

This week’s Animal Spirits with Michael & Ben is supported by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: The 2 types of investment mistakes Hangovers and sunburns The utter domination of large firms in the stock market this year Why real estate prices are only falling in big cities Why isn’t Tesla in the S&P 500 y...

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Space Jam

Why did Warren Buffett do a complete about-face on the airline stocks and sell them at prices significantly below where he had been accumulating them just a few weeks before the pandemic? It’s obviously not because he panicked. Panic isn’t even in the Oracle’s repertoire. It might be because the world had so significantly changed that the classical recession playbook – buying assets in distress and...

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Space Jam

Why did Warren Buffett do a complete about-face on the airline stocks and sell them at prices significantly below where he had been accumulating them just a few weeks before the pandemic? It’s obviously not because he panicked. Panic isn’t even in the Oracle’s repertoire. It might be because the world had so significantly changed that the classical recession playbook – buying assets in distress and...

The post Space Jam appeared first on The Reformed Broker.

The Perfect Dividend Stock

In an utopian world, the perfect dividend stock would be one that is both high-yield and provide a high dividend growth rate. Its share price would appreciate ratable with its increasing dividend. All of this would be driven by increasing earnings and cash flow. Ok, so much for my fantasies, the perfect dividend stock just may be a balanced compromise. Consider the following: High Yield/Low

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5 Thoughts on a World with No Yield

The latest JP Morgan Guide to the Markets has an incredible chart showing how yield-starved the fixed income markets are across the developed world: Around 90% of developed countries have government bond yields of 1% or less. Almost 40% of these countries have negative yields. Rates are low for a reason. We’re in the midst of a depression which is a deflationary force and central banks are doing their damnedest to ...

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