• Current Conditions

  • Current Conditions

    Current Conditions

    The stock market is still very overvalued in spite of the recent price weakness. I would consider the stock market to be in Bubble territory at 50% overvalued. Investors should expect very low returns over the next 5-10 years.

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    Tobin's Q

    One of the major investment firms that does outstanding valuation work is Grantham Mayo (GMO). Below are their latest forecasts of seven-year returns for various asset classes.

    GMO_7YrForecasts_Dec14_page_1

    Investor sentiment is highly bullish—and is at the loftiest level since the beginning of the bull market. This level of bullishness has been associated with major stock market peaks, although the measure tends to be early.

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    The stock market has become increasingly volatile. I think investors have become spectators, afraid to sell, while traders and speculators push prices around almost at will.

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    The economy is likely to continue its slow growth.

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    The expected return from bonds is low, but better than for stocks.

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    As investors “reach”

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  • Everything Has Its Time

     For everything there is a season, and a time for every matter under heaven- Ecclesiastes 3:1

    About three and one-half years ago, I began posting on BearsEatBull.com. In doing so,  I had three primary goals:

    1. To give my children some investment knowledge and wisdom,
    2. To force myself to into a discipline that would keep me abreast with markets and the economy, and
    3. To stimulate discussion with others about the investment environment, the one thing I really missed about leaving the investment management business.

    Certainly, I accomplished my first two goals. The third goal, however, was elusive, probably because my writing was either too difficult to understand for the average person or not in-depth enough for professional investors.

    In any case, the time has come for me to wind down BearsEatBulls.com. This is not because I failed to achieve my third goal. The process of writing BearsEatBulls.com has

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