S&P 500 Payout Ratio
S&P 500 Payout Ratio Stock buybacks and dividends as a percentage of free cash flow are reaching dangerous levels. Image: MarketWatch
The Rise of Passive Investing
The Rise of Passive Investing Net inflows into index-tracking U.S. mutual funds and ETFs rose by around 50% in the second quarter from a year earlier. Image: The Wall Street Journal
The Great Re-allocation from Equities to Bonds Continues
The Great Re-allocation from Equities to Bonds Continues Since the end of 2018, S&P 500 ETFs have seen outflows, while long Treasury ETFs have seen inflows. Image: Macrobond and Nordea
Decomposing the U.S. 10-Year minus 3-Month Treasury Yield Spread since 2013
Decomposing the U.S. 10-Year minus 3-Month Treasury Yield Spread since 2013 This great chart shows that the “Global Economic Data” variable has a significant impact on the U.S. 10-year minus 3-month Treasury yield spread since 2018. An R² of 0.902 means that more than 90 percent of the variance in the U.S. 10-year minus 3-month Treasury yield spread…
50 Percent of US Stock Fund Assets Are Invested in Index Funds
50 Percent of US Stock Fund Assets Are Invested in Index Funds Until active equity funds drop fees, the flow into passive equity funds will certainly continue. But could markets become inefficient if everyone buys index funds? Image: Morningstar
98% Correlation with the US Stock Market and an R² of 0.96 since 1970
97% Correlation with the US Stock Market and an R² of 0.94 since 1970 Our forecasting models have a fantastic 97% correlation with the US stock market on a quarterly basis since 1970 and an R² of 0.94. It means that 94 percent of the US stock market variance is predictable by the flows of data…
Why Lower Bond Yields Influence the S&P 500?
Why Lower Bond Yields Influence the S&P 500? Because lower interest rates push stock market multiples higher. If interest rates are lower, then the value of future cash flows increases, because future cash flows are discounted back at a lower interest rate. So, lower U.S. 10-year yields influence the stock market equity risk premium. On the other…
Why We Should Not Be Afraid By China’s Debt?
Why We Should Not Be Afraid By China’s Debt? In China, there is a high level of savings and controls on capital outflows. Currently, most of the Chinese savings are lent or invested in China. So, China’s debt reflects the Chinese savings rate. It would be much more worrying if China’s debt led to external debt,…
Aswath Damodaran – Laws of Valuation: Revealing the Myths and Misconceptions
Aswath Damodaran – Laws of Valuation: Revealing the Myths and Misconceptions Aswath Damodaran is professor of corporate finance at the Stern School of Business at New York University, with his unique perspective about equity valuation. Here, he talks about the corporate life cycle, corporate finance, cash flow and the laws of valuation. https://www.youtube.com/watch?v=c20_S-QgvsA
Stock Market Long-Term Forecast
https://www.isabelnet.com/wp-content/uploads/2019/03/stock-market-long-term-forecast.mp4 This great long-term forecast model displays the annual and total return expected for the next 10 years with a high degree of confidence This advanced model makes a forecast for the next 12 months, next 3 years, next 5 years, and next 10 years, with dividends reinvested. For each period, it displays the annual…