tag:blogger.com,1999:blog-8152901575140311047.post6551308965793802839..comments2024-03-28T12:49:46.624-04:00Comments on Musings on Markets: A Tale of Two Markets: Politics and Investing!Aswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-8152901575140311047.post-11395399558485259712018-01-26T09:18:15.022-05:002018-01-26T09:18:15.022-05:00A good post, as usual, thx! Think real estate inve...A good post, as usual, thx! Think real estate investing, even on a very small scale, remains a tried and true means of building an individual's cash flow and wealth.<br />Finding good partners is the key to success in anything: in business, in marriage and, especially, in investing.<br /><br /><a href="https://www.leaprate.com/forex-brokers/" rel="nofollow">Comment</a>Anonymoushttps://www.blogger.com/profile/16031399575034887834noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-39374228104002047642017-06-07T11:47:06.395-04:002017-06-07T11:47:06.395-04:00I tried to download the spreadsheet for the Equity...I tried to download the spreadsheet for the Equity Risk Premium but it does not work. What type of file is it? Is there somewhere else we can obtain a copy or to learn where you get these exact projection numbers from? Thanks<br /><br />EricAnonymoushttps://www.blogger.com/profile/16843803643510220635noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-33068474202628883162017-06-07T07:13:06.888-04:002017-06-07T07:13:06.888-04:00Hey Aswath! Great post as always. I'm envious...Hey Aswath! Great post as always. I'm envious of your level of clear headed and rationalized thinking. You do as good a job as anyone at separating emotions and opinions from factual observations.<br /><br />Question, would the effects of QE be a large contributor to the historical lows the VIX is reaching? Intuitively it seems as if an increase in the money supply would yield to increased flow of funds. With more buyers and sellers as a result of this, wouldn't you expect the option spreads to narrow that underline the VIX?<br /><br />Anonymoushttps://www.blogger.com/profile/12399446238061507399noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-55146331379776848472017-06-07T07:10:01.556-04:002017-06-07T07:10:01.556-04:00Could the impact of QE and fed funds rates be a bi...Could the impact of QE and fed funds rates be a big reason for the historical lows of the VIX? Intuitively it seems as if increased monetary supply would in turn increase the flow of funds, more people buying and selling, thus reducing spreads on option contracts. Is this a logical way of rationalizing this?<br /><br />Thanks for the great post as always Aswath! Anonymoushttps://www.blogger.com/profile/12399446238061507399noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-40259171961304716642017-06-07T06:13:31.032-04:002017-06-07T06:13:31.032-04:00As usual, another very interesting post! It does r...As usual, another very interesting post! It does raise a number of questions. Going forward, if we adjust the DDM for the S&P 500 for buybacks, do we also need to adjust the ERP? Since buybacks are more volatile than dividends, the required return should be higher? Also, how can top down EPS growth forecasts be 5.4% for the next 5 years, if the retention ratio is close to 0? By definition, the growth rate must equal the retention ratio multiplied by the ROE?Anonymoushttps://www.blogger.com/profile/17880712052258607498noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-83337882374958942532017-06-07T05:12:45.543-04:002017-06-07T05:12:45.543-04:00You are back! Nice to see you again, Aswath. You are back! Nice to see you again, Aswath. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-50429116126887767552017-06-07T04:21:37.329-04:002017-06-07T04:21:37.329-04:00This is such a dope article prof! This is such a dope article prof! Sushhttps://www.blogger.com/profile/00378824362723683599noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-81497668089483814972017-06-07T01:11:44.523-04:002017-06-07T01:11:44.523-04:00Welcome back, I'm longing your posts every day...Welcome back, I'm longing your posts every day:) aphonghttps://www.blogger.com/profile/01991264501960010906noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-13462473251351682342017-06-06T19:17:54.792-04:002017-06-06T19:17:54.792-04:00"US companies have been returning immense amo..."US companies have been returning immense amounts of cash in the form of buybacks over the last decade and it is the surge in the collective cash flow that pushes premiums up."<br /><br />Does this mean that stock prices are only superficially inflated because the stock price rises as companies buy back their own stock? What data do you have linking stock price surges with market-wide correlated buyback programs?Reashttps://www.blogger.com/profile/06303544512329245754noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-50562258317771985002017-06-06T17:49:37.064-04:002017-06-06T17:49:37.064-04:00There is no inflation; corporate earnings are good...There is no inflation; corporate earnings are good and support market prices of stocks. If rates go up and earnings do not show a great enough increase then the market will sell off. Rates have gone done since June 1, so the ERP is maintained. The market remains all about earnings going up in the future vs what happens with interest rates; and if rates do not materialize and rates go down, the fall off in the market should be muted.<br /><br />I wonder about your using past data for buybacks as a base for projecting your IRR calculation; isn't the assumption that they will continue in to the future a bit questionable since a great many buy backs have not been funded via cash flow, but from increased borrowings. If so, are you not overstating the ERP in your calculation which might tilt the scale somewhat in the bears direction?stevenoreply@blogger.com