Stock returns are in part a function of the net cash on a company’s balance sheet and changes in future expectations of its free cash flow. These returns are observed on the market as the sum of capital appreciation and dividend yield.
Bitcoin is getting hammered. What is surprising is that stocks are trading in line with crypto’s sell off. I think we see a decoupling soon, where crypto continues to fall and the Nasdaq and S&P500 rise. I’m still bullish. The $NVDA report and outlook was solid. Fed net neutral.
The near term may be difficult but the option value of this market has skyrocketed. The first lever that can be pulled is a repeal of tariffs. The second lever is the Fed lowering interest rates. There’s a lot of dry powder to handle any bear market. I remain bullish on equities.
You can have world-class analytical skills and a remarkable ability to identify undervalued companies, and still fail to beat index investors.
The market must also eventually agree with you, during your holding period, and to an extent that achieves excess returns above costs.
Usual 2nd guessing, trolling, some compliments since I’ve been recommending energy MLPs for almost 2 years. My new Investment Outlook gives more background about why I like MLPs, especially WES, PAA, ET, EPD. HESM, MPLX
https://t.co/SVYzRG991r
3%: Great Depression, GFC, 1970s & 2020s?
"In other words, if you were forecasting 10-year returns of 3% annually, you are also forecasting an economic sh*tstorm of rare and historic proportions."
https://t.co/IFGbifXxcF
by @Ritholtz