Tax cuts and buy backs

Discussion in 'Economics' started by Here4money, Aug 29, 2018.

  1. Here4money

    Here4money



    The question is, when's the dump after the pump?
     
  2. dozu888

    dozu888

    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.
     

  3. 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
     
    Last edited: Aug 30, 2018
    financialbusiness likes this.