Re: Whither the markets?
As mkt went past 2020 started to decrease stock allocation all the way to 2115. With mkt now at 1942 that appears to have paid off.
Re: Whither the markets?
This completes the evaluation of the effectiveness of the hypothesis laid out - that mkt was approaching high valuation. Hence periodic rebalancing started at circa 1920. Then decrease in stock allocation started at 2020 circa.
Always good to go back and review the hypothesis. Keeps one honest and accountable. This was an experiment Conducted in real time.
Re: Whither the markets?
Market already 13+% down (again) from recent peak (again). How far more to go? 10 % more?
Re: Whither the markets?
10 pct down sounds good to me.
Asset allocation and rebalancing can be done any time.
Re: Whither the markets?
The market P to e based on trailing earnings is I think 21. But last 12 months earnings is low due mainly to oil and miners suffering. Assuming this is a one off event the p to e is about 20 suppose. Take 10 pct off and you get 18. Still bit on higher side.
Take 20 pct off and you get 16.
So 10 to 20 pct lower stoll brings it to reasonable valuations.
Shiller p to e probably now is at 23? Have to check. To bring it down to 19 we have to go down about 13.5 pct. To bring it to 18 we have to go down abt 21.5 pct. So down 13. 5 to 21.5 pct.
I had changed asset allocation from say 75 25 to 49 51 stock cash. With oil going down slowly bought oilnstocks. So maybe now 51 to 40 stocks cash. If mkt keeps going Dow will increase stocks allocations lowly
Re: Whither the markets?
Where do you get P/E for Indices?
Re: Whither the markets?
I will write a detailed post later on in the evening or tomorrow. What I wrote was from memory and could be off.
Re: Whither the markets?
The above link gives trailing 12 months earnings in 2015 dollars. It is 94.5 if I recall. So based on yesterday close of 1987 pe was 20.1 (close to the 21 I guessed).
With market rise today pe is 20.3 1931 / 94.5
The link below gives pe ratio 20.25
Re: Whither the markets?
Here is Shiller PE
It is about 24.3. Yesterday it was 23.95. I had guessed 23.
I had provided links to these ratios in other threads.
India is 222 for 2. How about that?
Re: Whither the markets?
Rahane 52 off 51.
Re: Whither the markets?
^ thank you for cricket updates in finances 
Anyway, thank you for the links to S&P P/Es :k: … With today’s market nose-dive it has gone below 20.
Re: Whither the markets?
Sure. No problem.
PE may be right around 20 I think
Re: Whither the markets?
^ It would be nice to check before you shoot your mouth off. PE is 19.81
Re: Whither the markets?
Re: Whither the markets?
So pe is 19.8. considering last 12 months earnings is lower 5han normal due to oil and mining and global slowdown, assume with 5 pct higher earnings pe is 18.8.
To bring it to 17, that woukd take 10 pct off from here. Or 1880 - 188 = 1692.
Shiller is at 23.8. To get to 20 is 3.8 times 4.2 or 4 time 4 or 16 pct.or 1580.
Hence 10 to 16 pct from here would be around fair value. 1580 to 1692
I plan on going in little at a time from these levels. By the time mkt reaches 1580 stock allocation woukd be increased incrementalky to about 72 pct from current 50 pct.
Europe is cheaper. So moved a bit into europe yesterday thru mutual fund.
Bought rds.a 3 days ago. BP and tot 4 to 5 days ago. Added to these positions I mean. Now oil is 15 pct of stock portfolio (excluding mutual funds)
Re: Whither the markets?
^ “I plan on going in little at a time from these levels. By the time mkt reaches 1580 stock allocation woukd be increased incrementalky to about 72 pct from current 50 pct”
Well, the mkt didn’t go much lower. Maybe to 1850. Did move some from cash to US Index stock fund. Now mkt is within 1.5 pct of all time high. Have been lightening starting 2060..now at 2102.
The move into Europe was well timed. Happened to catch a local low.