nobody yet mentioned the Shiller CAPE yet, I think this discussion could benefit from some valuation talk. https://www.multpl.com/shiller-pe
Can you explain what that is and means?
Stocks trampled as Nikkei crashes 13%
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Re: Stocks trampled as Nikkei crashes 13%
#92It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…
>It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. I think sentiments like yours are just as bad as the sentiments you find aggravating. Yes, investments can produce bigger returns than simple savings, but the keyword is there is no guarantee. Unlike savings which are guaranteed by the bank and the government and will grow at a known rate, investments are n…
If you lose all your money from index fund investments, the US economy has completely collapsed and no amount of FDIC insurance will protect your savings.
Re: Stocks trampled as Nikkei crashes 13%
#93Re: Stocks trampled as Nikkei crashes 13%
#94nobody yet mentioned the Shiller CAPE yet, I think this discussion could benefit from some valuation talk. https://www.multpl.com/shiller-pe
Can you explain what that is and means?
Sure. Cyclically Adjusted Price over Earnings.
Its a metric developed by econ researcher Robert Shiller, meant to aid those long term investment strategies by quantifying the idea of 'value'. Using 10-years of earnings helps to sidestep a lot of the problems of P/E as a snapshot.
As the time series helps to show, 10-year returns are highly correlated to the price paid for those corporate earnings.
Re: Stocks trampled as Nikkei crashes 13%
#95Earlier quoted context omitted.
From an investor point of view, this is a wrong way of looking at it. Companies can do 2 things with their revenues: reinvest into the company (stock price grows), or take it out as profit (dividends, value of company stays the same). Only looking at stock price is too narrow minded. Maybe companies don't want to grow and just take the profit. For the case of Japan, let's take a look at stock price + dividend reinves…
The largest time frame I could find on the site you linked is a month. I was able to find a calculator for this exact thing here. [1] Adjusted for inflation, investing from December 1989 to February 2013 (latest date available on the site) an investment in the Nikkei, with a reinvestment of dividends in Yen, would yield a return of -6.2%. It'd be -48% had one chosen to invest to/from USD, owing to the collapse in exc…
So don't invest in 1989 and sell in 2013, any other time is more than fine.
Did you deliberatly pick those dates? I think so. Here is the chart: https://www.nikkei.co.jp/nikkeiinfo/en/global_services/nikke...
Let me pick the dates then: 2013 to 2023, annualized return inflation adjusted: 10%
Re: Stocks trampled as Nikkei crashes 13%
#96Earlier quoted context omitted.
>It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. I think sentiments like yours are just as bad as the sentiments you find aggravating. Yes, investments can produce bigger returns than simple savings, but the keyword is there is no guarantee. Unlike savings which are guaranteed by the bank and the government and will grow at a known rate, investments are n…
If you lose all your money from index fund investments, the US economy has completely collapsed and no amount of FDIC insurance will protect your savings.
Doesn't have to be all, most people simply do not want to lose any significant sum of money to games.
I repeat for emphasis: Money you invest must be money you are okay losing. Most people are not okay potentially losing their money.
Re: Stocks trampled as Nikkei crashes 13%
#97[flagged]
Re: Stocks trampled as Nikkei crashes 13%
#98Earlier quoted context omitted.
The largest time frame I could find on the site you linked is a month. I was able to find a calculator for this exact thing here. [1] Adjusted for inflation, investing from December 1989 to February 2013 (latest date available on the site) an investment in the Nikkei, with a reinvestment of dividends in Yen, would yield a return of -6.2%. It'd be -48% had one chosen to invest to/from USD, owing to the collapse in exc…
So don't invest in 1989 and sell in 2013, any other time is more than fine. Did you deliberatly pick those dates? I think so. Here is the chart: https://www.nikkei.co.jp/nikkeiinfo/en/global_services/nikke... Let me pick the dates then: 2013 to 2023, annualized return inflation adjusted: 10%
1989 was picked as it was the peak of the Japanese economy, the point from which people thought the economy could only continue to grow even larger, because that's what it'd always done - basically the same sort of stuff you're espousing here. But of course that's not what happened - anybody who invested at that time (or in many years around) would have seen nothing but losses over the decades to come. The end date was a typo, of course I picked 2023, the latest date the site supports. Do it 1989-2013 and you'd have lost 64% of your money!
Not only is markets declining longterm an obviously possible outcome, but as population levels start to decline, it's likely to become more the norm than the exception. When your population is growing, each year all businesses naturally grow. When your population is shrinking, all businesses naturally shrink each year. Fertility collapse is going to shake the world like nothing before.
Re: Stocks trampled as Nikkei crashes 13%
#99Earlier quoted context omitted.
So don't invest in 1989 and sell in 2013, any other time is more than fine. Did you deliberatly pick those dates? I think so. Here is the chart: https://www.nikkei.co.jp/nikkeiinfo/en/global_services/nikke... Let me pick the dates then: 2013 to 2023, annualized return inflation adjusted: 10%
1989 was picked as it was the peak of the Japanese economy, the point from which people thought the economy could only continue to grow even larger, because that's what it'd always done - basically the same sort of stuff you're espousing here. But of course that's not what happened - anybody who invested at that time (or in many years around) would have seen nothing but losses over the decades to come. The end date w…
1989 until 2023 gives a 8.765% positive return with inflation.
Re: Stocks trampled as Nikkei crashes 13%
#100• NVIDIA $NVDA: -11% • Google $GOOGL: -11% • Apple $AAPL: -10% • Amazon $AMZN: -10% • Meta $META: -10% • Tesla $TSLA: -10% • Microsoft $MSFT: -9% https://x.com/WatcherGuru/status/1820355633008296324#m
At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on yo…
> to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends
My understanding is that a lot of (tech) investors these days do not want dividends, they want growth.