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| I dont really see a "neat" 7% for ten years but just look at Walmart. Walmart is trading around 40 times earnings. And those are more or less legitimate earnings. Meaning no funny business. Sometimes headline P/E numbers can be nonsense. One time tax impacts, temporary CAPEX spends, all sorts of way for the headline PE not to be accurate. But Walmarts basically is. And it's even more expense if you look at it in terms of price to free cash flow. So think about what that means. At current level, it would take you 40 years, just to get your money back on Walmart if you put in a dollar today. If Walmart falls by half, it takes you 20 years to get your dollar back. And think of all the things that could derail their earnings. A prolonged increase in interest rates.-- The feds can play with the front in, the market basically determines the long end. Tax rates go up. There is a move from capital in favor of labor. Capital has been favored for about 40 years now. So while I dont think you get a linear x percent decline, the market as a whole, and a lotta names individually are just wildly expensive. IMO... | |
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Land rich and cash poor