Saturday, July 26, 2025
'Time-in-the-Market' -v- 'Timing the Market'. Which is better? US share market outcomes
Share market returns over all holding periods - even up to 10, 20, and 30 years - are little more than a coin toss. 'Time in the Market' only works if you get the Timing right, which is mostly luck. Finance textbooks and retirement calculators are based on nice, smooth, theoretical curves that assume constant 'median' returns over long periods. But in the real world, only ONE person in the population gets the median. Half will get MORE (sometimes a lot more), and half will get LESS (sometimes a lot less). There have been decade+ periods of zero or even negative real returns. By the time you realise you're in the unlucky wrong half, it may be too late to adjust your strategy.
US Shares: ambitious multiples on ambitious accelerating profit outlooks. But powering on regardless
In the March qtr reporting season, S&P500 companies posted good earnings growth of +13% for the past 12 months, after decent +9% growth in the prior 12 months. Consensus forecasts for the next two years have been cut over the past month (tariff impact fears) but they are still forecasting an acceleration of earnings to +15% growth in calendar 2025, plus a further +15% growth in 2026. That's still incredibly ambitious! Current pricing is also a very bullish 28 times trailing earnings, and 25 times the next year's forecast earnings. These are very optimistic multiples on very optimistic accelerating earnings outlooks - a double layer of over-confidence - and highly vulnerable to negative shocks. But investors have shrugged off Trump's tariffs, negative GDP, and Moody's credit downgrade. So far so good!
Slides from my session at the Australian Shareholders' Association seminar on 7 May 2025, Sydney
Here are the slides from my session at the Australian Shareholders' Accociation seminar on 7 May 2025, Sydney. Highlights: 4 things about the future we can predict with certainty. 4 things about the future we can be reasonably certain about. Plus we cover - human nature - investor behaviour - bubbles & busts - inflation - longevity - what's behind Trump's agenda, and will it work?
How the ‘Magnificent-7’ stack up – 8 key charts
Just 7 companies make up 19% of the combined value of the entire 15,000 companies listed on world share markets, but they produce just 12% of total world profits, and just 3% of world dividends. They are over-priced on just about every measure, but are they worth it? What justified their astronomical pricing? There is a fairly obvious odd-one-out here - which is it? I have been bullish on US/global shares in portfolios - will this change?
Bring on the Trump ‘volatility’! - My Volatility Spike Index separates the calm from the storm
Trump's first term was certainly entertaining, but was it volatile for financial markets? Let's look at facts, not mindless media chatter warning of 'more Trump volatility!', or 'another bumby ride!'. My Volatility Spike Index highlights and compares all volatility spikes since 1970.
Quarter-century review: Asset class winners & losers, how things change (and how I got through it)!
How things can change, radically and quickly Booms collapse into busts, winners turn into losers, and prior losers arise from the ashes into new booms My personal journey through it all
We're half-way through the 2020s decade! Here's the half-time score check on Aussie shares
The decade half-time score check for the Aussie share market is not that good: Aussie shares are having a below-average decade so far (and below other markets eg the US). It has been below average all decade – after a poor start with the 2020 Covid lockdowns. But all is not lost – some past decades also started out slow but ended up with good full decade returns. There is plenty of time left this decade for the next big speculative boom to lift the share market – history is on our side!
‘Worst’ days on the ASX? (" . . . THAT’s a knife!”)
After my story on Monday pointing out that the -3.8% fall on the ASX was relatively minor and there have been dozens of worse days on the ASX - many people asked me what those 'big' down days were, so here they are. What were the really bad days on the Australian share market? What caused them? How do they compare to the worst days on Wall Street? Are share markets really 'random' like finance theory claims?
Not all world share markets are hitting new highs. Here are the Pretty Good, the Bad, and the Ugly
Most world share markets are hitting new highs this year, but some are not Here they are - the Pretty Good, the Bad, and the Ugly How does your country rate?
Dozens of world share markets are hitting new highs - the myth of the Magnificent-7
It's not just the 'Magnificent-7' US tech giants, and it's not just US shares. There are dozens of share markets hitting new highs all over the world. Want proof? Here they are!
Case Study 1969-70 Nickel boom-bust
In 2021 and 2022, when the prices of nickel and nickel explorers/miners were soaring, my inbox was flooded with emails asking which nickel stock(s) to jump into. Since all mining booms follow a familiar pattern, and end the same way for the same reasons, I responded by referring to my story about the mother of all nickel boom-busts – Poseidon, involving the very same nickel mines. How’s a one-year gain of 46,000% sound?
124 Reasons NOT to invest! - This time is different - or is it?
Every year there are ‘End of the world’, or ‘End of life as we know it’ crises and threats that scare investors into waiting and watching from the sidelines, but share markets have always seemed to power through them. Are the current batch of threats and fears different this time?
Why do share markets crash? – Part B: Update on Australia
The simple answer is that the Australian share market crashes (and rebounds) because, and when, the US market does. The US is the largest and most influential market that affects all global markets, asset classes, and investors. What happens on our local market is almost always driven by what happens on Wall Street (with rare exceptions like 1907 and 1951), regardless of local conditions, events, or pricing.
Australia v US share markets – it’s our turn next!
Australia and the US have had the best share markets in the world for the past 100+ years, but: Why? Which market has generated higher returns? Which has had the bigger booms and busts? Who’s turn is it next?
Warren Buffett: world’s greatest investor, but even he lost it 20 years ago.
Many readers wanted me to back up by bold claim that even the best investor in the world – Warren Buffet – suffered from the same disease that plagues every other successful fund manager in the world - fading out-performance over time.
ASX reporting season in 4 charts - $40b wiped off profits! - where did it go, and why?
August is the main full-year reporting season for Australian listed companies, as most companies have June reporting years. For ASX100 companies that reported their June full-year results in August, total profits fell by one third from $116b to $76b.
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