Robert Shiller’s S&P 500 Forecast for 2020: Is He Overly Optimistic?

Robert Shiller was on CNBC New Year’s Eve to make his forecast for the S&P 500 index in 2020.  His best guess is a 1430 level which works out to 14% price appreciation over the next ten years or 1.3% annually. Taking no issue with the P/E multiple he uses but only analyzing the earning [...]

Corporate Profits: What the Current Level Tells Us About S&P 500 Returns Over the Next Five Years

Last week, in his weekly market comment, John Hussman posted an interesting chart (see below) comparing the corporate profit to GDP ratio and the subsequent growth rate in corporate profits. I have previously posted on profit margins (see here and here) and will now further explore what profits margins at current levels imply about the [...]

More on Profit Margins

An update to last week’s look at how QE2 may impact corporate profit margins. First, a chart of S&P 500 revenues and profits. This view complements the profit margin chart from last week.   Profit has recovered to within 10% of the all-time peak but revenue has only recovered to 15% of peak. Demand remains relatively [...]

Long-term trend in real earnings

Discussion in the financial blogosphere is persistently taking place over where the market is headed. Recently I read someone pondering if we were at a level similar to 1992; a little more than a year into what would end up being a 10 year bull market that saw the S&P 500 run from the 320 [...]