Discussion in 'Economics' started by Here4money, Aug 29, 2018.
The question is, when's the dump after the pump?
I have posted this question elsewhere and nobody could give an answer -
find me an asset class, anywhere in the world, as solid as the SP500, that is forward yielding 6%
we are in the middle of an equity super cycle, yet people don't have enough brain to answer such a simple question... they have sold too early, or have never participated... and now they are just praying for a drop and getting disappointed every day.
I was thinking about it lately
I understand nominal GDP grows around 5% a year
What I see S&P growth is around 16% compounded in the last 10 years. Or somewhere 14% inflation adjusted
I honestly don't know how it could be sustainable - yes buybacks, tax cuts, public companies get bigger slices of the economy
but still I wouldn't call financial engineering as an equity super cycle - it will hit the wall and then those annual 16% against 5% GDP growth will need to be worked out some way.
although I woudn't be surprised to see S&P 6000 in the next 3-5 years
I don't believe money printing will help you get 14% inflation adjusted returns indefinetely
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