hi Bruce,
I was hoping for your own personal valuation model that you
i'm flattered you would think i have such a thing! but i'm no academician or proprietary researcher; just a little bug trying not to get squashed by the heavy treads of market history. i try to gather information from a lot of sources and form heterodox opinions; i'm not sure what more an individual can do.
i could make some model for the hell of it, but my feeling is that most models will not work reliably over the lifetime of an investor or else they are just the products of data mining (like the Fed model, which doesn't work before 1980, so that period is ignored).
that is to say, if you have a time horizon of 25 years for your equities, you cannot say for sure which, if any, model will work best for that period. looking in the rear-view mirror, it would have been good to be in gold and real estate and US small value and Japanese stocks in the 70s and 80s, then dump those for US large cap equities in the 90s, then move entirely into US large growth in the late 90s, then go massively short those same stocks in 2000 and early 2001. but what single model would predict this, ex ante?
i'd say there is no such model. rather, i am better off owning multiple segments of the market than trying to pick the "magic bullet".
in your original message, you seemed to ask me for historical data:
do you have that information available to make the case for each respective period in question to share with all of us that illustrates the inflation rate, interest rate, yield curve, dividend yield, etc
but then you seem kind of dismissive of same after i provided this data:
Trend watching, in terms of past history and predicting future history, may or may not be of interest or value to individual investors
my personal opinion is that most models break down when there are paradigm shifts in the market. that is why i think it is important to look past recent history to gain some perspective on where the market could go. |
