Monday , 22 October 2018


Tag Archives: Jeremy Siegel

Gibson’s Paradox and the Price of Gold

One of the most controversial topics in investing is the price of gold with many goldbugs saying that gold will soon break $2,000, then $5,000 and then $10,000 a troy ounce but, frankly, how can anyone reasonably calculate what the price of gold should be when they don't understand the factors that drive gold? So let me explain.

Read More »

Become An Expert In Financial Market Math & History – Here’s How

Following Charlie Munger's advice to “develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day” this article presents my recommendation as to what books to read to learn more about financial market history and the basic math skills you need to be a good investor.

Read More »

The Future Price of Gold and the 2% Factor

It is my contention that the price of gold rallies whenever the U.S. dollar’s real short-term interest rate is below 2%, falls whenever the real short rate is above 2%, and holds steady at the equilibrium rate of 2%. Let me explain.

Read More »

Shiller & Siegel Forecasts of Future Real Stock Market Returns Differ Considerably

By smoothing out the effect of the business cycle on corporate earnings, investors get a truer picture of how expensively or cheaply stocks are priced. Yale professor Robert Shiller has popularized this concept and packaged it as the Shiller P/E ratio, alternatively known as the cyclically-adjusted P/E (CAPE) ratio, and it has become a widely followed and efficacious stock market valuation measure. Currently the ratio is standing at a 21.4 (approximately 30% higher than its long-term average) causing many value investors to adopt a cautious stance toward US stocks. [Let me explain more fully.] Words: 690

Read More »

Check Out This Grading System for Comparing Stocks

Jeremy Siegel offered in his book, Stocks for the Long-Run, several actionable techniques that investors might find beneficial, one of which was a 3 parameter approach to stock valuation called the O-Metrix Grading System. The metrix has been applied to all 30 stocks listed on the Dow Jones Industrial Index and 5 stocks top the list. Below is an explaination of the approach, the formula and the results for all 30 stocks. Words: 985

Read More »

Market Crash Will Hit By Christmas 2011! Here's Why

At the beginning of 2011 USA Today reported...[that] Ned Davis Research says the S&P 500 will make a run at the 2007 high of 1,565, hit a “midyear peak” [and] then it will crash as interest rates rise...concluding that “the midyear peak could mark the end of the cyclical bull market that began in March 2009 and the start of a new cyclical bear market.” Words: 637

Read More »

Siegel vs. Shiller + Bogle vs. Gross – On the Future of the S&P 500

The market is currently slightly over-valued now which is reasonable since stocks offer a much more attractive return than bonds due to low interest rates. Eventually, however, interest rates will get to levels of at least 4% (which is the minimum normal rate on interest rates) and that would justify a P/E closer to 15. I am no prophet but if I had to guess, I would think future returns will be somewhere between Bogle's and Shiller’s estimates, i.e. between 8% and 10%.

Read More »