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Cyclical Markets:
E
Bull Markets
P/E
Returns
Adding 2 positives = great returns
Sideways Markets
High
Low
Net-net earnings growth is cancelled out by P/E decline = a lot of volatility and no returns
Adding 2 negatives = horrible returns
Bear Markets
High
Low
$65 $61
$50
=
38%
1,590 = 61 1,590 = 65
26 25
Revenues (GDP) continue to grow at a good pace. Given the exciting macro picture (China bubble, Japan debt bubble, Europe, QEs ) maybe or maybe not.
If you are not confused about the economy, you dont understand it.
Charlie Munger, Berkshire Hathaway Annual Meeting 2013 P/E continues to expand unlikely: past secular bull markets ended at this type of valuation.
Sorry, could not spend more time on sideways markets, but you can read about them in 7 languages:
ATEA
ATEA (ATEA in Oslo) 6.5 NOK ($1.03b ) market cap No net debt Sales 20b NOK (Sweden, Norway, Denmark and Finland) 60% of sales from hardware sales, 20% software, 20% services Growth 2-3% about market (takes market share) EBITDA (our approximation): products 3.5%; services 7% Good management set goals, reached them
Thank You!
You can browse the full version of the sideways market presentation: http://bit.ly/swpresentation
2008 Value Investing Congress presentation: http://contrarianedge.com/presentation/ Read articles and sign up for emails: http://ContrarianEdge.com