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« August Employment Report Preview | Main | Weighing the Week Ahead: Will the Fed Disappoint the Markets? »

September 07, 2012

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oldprof

CMP - I do not invest in particular stocks on a ten-year time frame. Too much happens. Even in my longest time frame, I am looking for stocks that I expect to double in three years.

I still adjust all price targets all of the time, and I do it by looking forward.

And you think that Hussman is not trying to time the market for periods less than ten years?

That is not the message I get from his weekly letters. Shiller also advocates owning a significant allocation of stocks. Meanwhile, many of those using this method have abandoned the market.

So that is why I offer the challenge. I'm curious, though. What is your average holding period for your stocks?

Jeff

CMP

"I continue to invite any loyalist for another method -- particularly those espoused by Hussman or Shiller -- to show that they can predict earnings one year in advance with greater precision."

Sorry, but you're fighting a straw man there Jeff. The whole point of valuation metrics like those associated with Shiller and Hussman, is that earnings in any given year represent only a small portion of the total intrinsic value of stocks.

The value of their metrics is in forecasting 10 year returns. How does your method compare with theirs over a 10 year timeframe? If you're going to say that your method isn't appropriate to a 10 year holding period, then why do you insist on comparing to Hussman and Shiller?

Paul Nunes

Jeff; you always inspire me to get better! Great work!

Vanvelde

Based on 108 for earnings and 1.59% for the ten-year, even allowing for some slippage, the low 1400's will turn out to be the trade of a generation.

lou

Jeff, your work is (so far at least)EXCELLENT!!!
Keep up the good work.

Andrew H

Jeff, thanks for a very timely article. I have followed your posts religiously and after a bad year in 2011 I have stayed about 80% invested throughout 2012 and I'm up about 10% (fingers crossed). I bought Apple at $571 after reading your posts and I'm a 'happy holder' at present. The only fly I see in the ointment is China. I live in HK and observe closely what is happening. I worry more about the politics than the economics. They are inextricably linked of course. I also would like to understand better the impact of the much talked about US drought. Otherwise, your posts have helped me live more comfortably with volatility and to shut out much of the extraneous noise. Thank you.

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