tag:blogger.com,1999:blog-8152901575140311047.post803967464254955942..comments2019-02-20T06:59:41.740-05:00Comments on Musings on Markets: January 2018 Data Update 2: The Buoyancy of US EquitiesAswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-8152901575140311047.post-75015200439484930892018-01-11T11:56:22.261-05:002018-01-11T11:56:22.261-05:00Sorry. The equation in the implied ERP picture was...Sorry. The equation in the implied ERP picture was incorrect. It shows earnings in the numerator, when it should have shown dividends and buybacks. The answer (7.49%) is right and I have fixed the equation. Thank you for drawing my attention to it.Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-68628771335526000522018-01-10T08:24:18.976-05:002018-01-10T08:24:18.976-05:00Have you made a typo?
Surely that equation solves...Have you made a typo?<br /><br />Surely that equation solves at r = 0.0826 not 0.0749?<br /><br />At 0.0749 terms are:<br /><br />124.43 + 123.92 + 123.41 + 122.91 + 122.4 + 2467.53 = 3085?<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-37919279555273912022018-01-10T05:54:32.891-05:002018-01-10T05:54:32.891-05:00Aswath, last year you calculated Implied ERP based...Aswath, last year you calculated Implied ERP based on Expected Dividends+Buybacks(years 1-5 and Terminal Value) Picture: https://3.bp.blogspot.com/-XUEIKgaTHmA/WHfe6QLbRkI/AAAAAAAAD8c/K9sDstkpBf4ivsy5ZaMywm4OGLAumsTvgCLcB/s1600/ImplPremJan2017.png, but now you make the same calculation based on Expected Earnings. <br />Is it OK? Why do you change the approach?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-9923432695898793612018-01-09T15:21:41.969-05:002018-01-09T15:21:41.969-05:00Quite interesting to see cash return ratio below 1...Quite interesting to see cash return ratio below 100%, pointing to the stability of the cash payouts after all. Also, interesting to see the return ratio converge to its 10 year average, which was an input option in your risk premium calculation spreadsheet. Excellent post and thank you for this update!Darcyhttps://www.blogger.com/profile/04061962968169183386noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-85350912197147298602018-01-09T15:00:44.184-05:002018-01-09T15:00:44.184-05:00How does your ERP map to forward 5 or 10-year retu...How does your ERP map to forward 5 or 10-year returns? Any predictive power?Anonymousnoreply@blogger.com