Board-Ansicht
Mix-Ansicht- Silicon Investor - W. Fleckenstein - black elk, 26.07.2000, 13:58
- Re: Silicon Investor - W. Fleckenstein - JüKü, 26.07.2000, 16:46
Silicon Investor - W. Fleckenstein
Gedanken zur Börsenentwicklung der nächsten 10 Jahre auf man höre und staue fundamentaler Basis..
"Along the lines of your comments today regarding the struggling Japanese market, which you have mentioned before, and is very relevant to the current picture here in the U.S., I relate the following. I bring to your attention a fascinating piece -- prepared by S&P, which I read today in a Cambridge Associates publication entitled"Selected Investment Perspectives," Issue 10, Forecasting U.S. Equity Returns, June 30, 2000.
In a nutshell, S&P created a matrix to help us calculate average annual returns on the S&P 500 index over the next 10 years. The vertical axis has"terminal PE in 2009" starting at 10 at the top and going down to 40 at the bottom. Across the horizontal axis is"Average annual earnings growth" going from 4% pa to 20% pa.
Now simply answer the questions as follows:
1. Guess what the PE of the S&P will be at the end of 2009.
- current PE is 33 at start of year 2000
- average 1926 to date is 15
- average 1960 to date is 16
- average 1990 to date is 23
Let's assume it will be, say, 18 in 2009.
2. Guess what the growth in earnings of the S&P 500 will be over the next decade.
- average earnings growth of the S&P 500 1960 to date is 7.5%
- 1970 to date is 8.1%
- 1980 to date is 6.8%
- 1990 to date is 8.0%
Let's assume it will be 8% in the decade ahead.
We then simply look at the matrix to determine the average annual compounded return -- which, according to the above assumptions, clearly assumes very good business conditions and does not assume major recession or anything like that, works out to:
An average annual compounded return of 3.1% per annum!
Finally we deflate the nominal average annual return by your guestimate of average inflation over the next 10 years.
- The average annual inflation 1960 to date is 3.2%
- The average of each decade's inflation rate 1900-1999 is 3.2%
- The average inflation rate for the decade 1990-1999 is 2.9%
So let's assume the average inflation rate to the end of 2010 is 3%. That means our forecast of average real returns using these assumptions for the next decade is about 0% per annum on the S&P 500 for the next 10 years. And that's making very reasonable assumptions of a healthy growing economy and assuming we don't have a major recession along the way!
Needless to say, if we have a bad patch of earnings growth or a return to average PEs for the last 75 years, we have a major problem. If we have both, we have a picture that will look just like Japan for the last 10 years!"
Hmm,...
black elk
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