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Bloomstran gives analytical takes on historical, current, and future market valuations. He also gives his analysis of Berkshire’s valuation.

There is an insightful discussion of Buffett’s past comments regarding Astrid, his wife’s funds in index funds. Bloomstran feels the developed world’s GDP has been overstated for years and most companies are growing slowly. The market valuation story is predicated on rising multiples. Bloomstran does a analysis of Costco over the years that illustrates a former growth company is now a cash cow with its glorious expansion era now in the rear view mirror, yet it has a high multiple awarded by the market.

Bloomstran says index investors had a tailwind since the GFC and that has or is ending. He posits the market is likely flat to barely meeting inflation the next ten to fifteen years and thus it will be challenging to those seeking to pile up future retirement assets. Upon hearing this analysis, I said “Amen, brother” surely branding me guilty of confirmation bias.

Will it be a swing back to a stock pickers world? Bloomstran seems to be saying, yes, that is likely.

Good analysis in this podcast.

Uwharrie

https://substack.com/redirect/8a94a2e0-de10-4b82-b...

[haven't watched the video yet]

S&P500 sales growth is about 4%/yr since 2000 (4% for 8 yrs, then 1% for 8yrs, then 7% for 8yrs). Current divi yield is ~1.3%. Suggests not much more than 5%/yr total return going forward (to me, anyway; 4.1% + 1.3% = 5.4%).
10yr treasuries pay ~4.3%. Hmmmm ....

https://www.multpl.com/s-p-500-sales-growth/table/...
https://www.multpl.com/s-p-500-dividend-yield

SA

S&P500 sales growth is about 4%/yr since 2000 (4% for 8 yrs, then 1% for 8yrs, then 7% for 8yrs). Current divi yield is ~1.3%. Suggests not much more than 5%/yr total return going forward (to me, anyway; 4.1% + 1.3% = 5.4%).
10yr treasuries pay ~4.3%. Hmmmm ....

Also if the current high valuation levels of the S&P500 do return to a more normal range anytime soon, the contracting multiples will lower that 5%. Perhaps considerably.
(All depends on how far and how fast those historically normal valuations return, if ever!)
Current S&P500 P/E 28. For some perspective: In 2011 it was 14.
Current S&P500 Dividend Yield 1.3%. For some perspective: In 2011 it was 2.12%.
Current Shiller S&P500 P/E 35. In 2011 it was 20.
Current S&P500 Price To Sales Ratio 2.91. In 2011 it was 1.3.
Current S&P500 Price To Book 4.87. In 2011 it was 2.
Current S&P500 Earnings Yield 3.52%. In 2011 it was 7%.

Or perhaps it's different this time!

I used Shillers site for #'s:

https://www.multpl.com/s-p-500-price-to-book

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