Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
S&P 500 Rally Pushes Index Toward Biggest Annual Gain In Decade
From Seeking Alpha Pzena likes market given current level of rates • 3:25 PM
'Skepticism about equity markets remains high," says deep-value investing giant Richard Pzena. Given the level of interest rates, the S&P 500 would have to rise by about 15% just to restore the historical equity risk premium. Put another way, the 10-year Treasury yield would have to rise to 3.8% vs. 2.5% today for the current level of the S&P to make sense. Think the market should go down? By Pzena's calculation, the 10-year Treasury yield would have to jump to 5% to justify a S&P 500 10% lower than it is now. What about value? Even five years since the end of the financial crisis, value stocks still have double-digit expected returns going forward if value spreads return to their norms, he says. Pzena Investment Management (PZN) Q3 earnings call transcript. S&P 500 ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB. S&P 500 value ETFs: SPYV, IVE, RPV, VOOV, FTA. Scott Minard /Guggenheimer Declining interest rates should boost housing activity and should contribute positively to economic growth by the first quarter of 2014. http://guggenheimpartners.com/perspectives/macroview/risk-on-returns
Comments
Pzena likes market given current level of rates • 3:25 PM
'Skepticism about equity markets remains high," says deep-value investing giant Richard Pzena. Given the level of interest rates, the S&P 500 would have to rise by about 15% just to restore the historical equity risk premium. Put another way, the 10-year Treasury yield would have to rise to 3.8% vs. 2.5% today for the current level of the S&P to make sense.
Think the market should go down? By Pzena's calculation, the 10-year Treasury yield would have to jump to 5% to justify a S&P 500 10% lower than it is now.
What about value? Even five years since the end of the financial crisis, value stocks still have double-digit expected returns going forward if value spreads return to their norms, he says.
Pzena Investment Management (PZN) Q3 earnings call transcript.
S&P 500 ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB.
S&P 500 value ETFs: SPYV, IVE, RPV, VOOV, FTA.
Scott Minard /Guggenheimer
Declining interest rates should boost housing activity and should contribute positively to economic growth by the first quarter of 2014.
http://guggenheimpartners.com/perspectives/macroview/risk-on-returns