US Stocks More Expensive than 1999-2000 DotCom Bubble High, According to EV/EBITDA

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Today’s chart is thank’s to this tweet by the People’s Hedge Fund Manager, showing the EV/EBITDA valuation ratio of the S&P 500 US stock index over the past 30 years. EV/EBITDA is sometimes called the “acquirer’s multiple”, and has certain advantages over Price / Earnings (P/E) as a valuation metric. Here are five earlier posts […]

S&P 500 Low Volatility Factor 1972-1990

Lower Risk, Higher Returns

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Today’s chart comes from one of the top 10 blog posts of S&P Dow Jones Index’s Indexology blog, showing how the low volatility factor has performed on US stocks over the past 40+ years since 1972. In other words, for the past several decades, the pattern for US stock investors has not been higher risk […]

Economic profit by industry, 2010-2014

Some industries really are more profitable than others

Posted Leave a commentPosted in Charts, Uncategorized

One of the concepts in academic economics which seems to obviously false in the real world is the idea that firms in a competitive market will earn “economic profits” of zero. An oversimplified version of that would be to say that after subtracting out all economic costs, including opportunity costs, there is no advantage of […]

Stock Markets by Country 1899 vs 2019

119 Years of Investment Returns, According to Credit Suisse

Posted Leave a commentPosted in Charts, Investing, Wealth Management

This morning’s ferry read is the Credit Suisse Global Investment Returns Yearbook 2019, for which I have to thank this excellent Twitter thread by Cambria’s Meb Faber for pointing out. Two of the charts I found worth a screenshot and share here show shares of global stock markets have changed since 1900 by country (header […]

Performance of Stocks vs Bonds vs 60/40 in Japan, USD net terms, 1984-2019

60/40 Has Worked Well, Even in Japan

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One of the most memorable lines I heard from my professors back at UC Berkeley was “what I am about to teach you here should work almost anywhere in the world, except Japan”. This was over a decade and a half ago, when many portfolios still needed to define whether they were “ex-Japan” and “ex-China” […]

A Lost Decade For Emerging Markets (and Small Caps, and …?)

Posted Leave a commentPosted in Charts

I recently discovered that SeekingAlpha has made it even easier to embed charts into articles and blog posts thanks to an integration with YCharts. I have found YCharts to be fast and powerful for visualizing fundamental data and longer-term total returns that I used to think required a far more expensive Bloomberg terminal, or custom […]

Using the Singapore Dollar as a “Global Currency” Proxy

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Today’s chart addresses a question I often get “how do I diversify away from a strong dollar, given that the euro, yen, and other currencies don’t look especially attractive with negative yields?”. One way of looking at global currency risk is through the IMF’s special drawing rights (SDRs), a unit of account developed around the […]

Expected Return of Stocks and Bonds vs CAPE Ratio

Expected Return of Stocks and Bonds in One Simple Chart

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One of the most frequently asked questions I am sent is “what is the rate of return I should expect when I invest in the market”? With bonds, it is fairly easy to see that a short-term US Treasury note bought with a yield of, say, 2%, will return you 2% per year if held […]

Globally diversified domestic stocks

Globally Diversified Domestic Stocks

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One reason I hear some investors are uninterested in buying foreign-listed stocks is that they believe the foreign revenues of some of their home-based companies already provide enough international diversification. The classic example is Coca-Cola, whose sales have spanned over 100 countries for years, so arguably Coca-cola is more like a “global portfolio” than a […]

How to double your money with government bonds in less than 2 years

Posted Leave a commentPosted in Charts, News, Web finds

Today’s chart is thank’s to this tweet by Mohamed El-Erian. Government bonds bore most people, in part because they promise low fixed rates of return, barely above bank deposit rates, and often lock in their rates for long periods of time over which inflation could eat away the value of the principal returned at the […]