The Correlation Conundrum And What To Do About It

The Correlation Conundrum And What To Do About It

http://seekingalpha.com/article/552251-the-correlation-conundrum-and-what-to-do-about-it?source=feed

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China’s banks

China's banks

http://www.economist.com/node/21554234

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Which Price Ratio Best Identifies Value Stocks?

Which Price Ratio Best Identifies Value Stocks?

http://www.gurufocus.com/news/173432/which-price-ratio-best-identifies-value-stocks

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Retirement Calculations Using Value Approach

Retirement Calculations Using Value Approach

http://www.valuewalk.com/2012/05/retirement-calculations-using-value-approach/?utm_source=rss&utm_medium=rss&utm_campaign=retirement-calculations-using-value-approach

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Whitney Tilson Explains BKS Reversal; T2 up 26% YTD

Whitney Tilson Explains BKS Reversal; T2 up 26% YTD

http://www.valuewalk.com/2012/05/whitney-tilson-explains-bks-reversal-t2-up-26-ytd/?utm_source=rss&utm_medium=rss&utm_campaign=whitney-tilson-explains-bks-reversal-t2-up-26-ytd

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Prem Watsa Worries Of Coming Canada House Crash

Prem Watsa Worries Of Coming Canada House Crash

http://www.valuewalk.com/2012/04/prem-watsa-worries-of-coming-canada-house-crash/?utm_source=rss&utm_medium=rss&utm_campaign=prem-watsa-worries-of-coming-canada-house-crash

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Greenspan Says U.S. Stocks ‘Very Cheap,’ Likely to Rise- Bloomberg

Greenspan Says U.S. Stocks 'Very Cheap,' Likely to Rise- Bloomberg

http://www.bloomberg.com/news/2012-05-01/greenspan-says-u-s-stocks-very-cheap-likely-to-rise.html

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Lost Decade? Not for Dividend Aristocrats

Lost Decade? Not for Dividend Aristocrats

http://feedproxy.google.com/~r/valuewalk/tNbc/~3/pqYYKOmfJrE/

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Greenspan Says U.S. Stocks ‘Very Cheap,’ Likely to Rise- Bloomberg

Greenspan Says U.S. Stocks 'Very Cheap,' Likely to Rise- Bloomberg

http://www.bloomberg.com/news/2012-05-01/greenspan-says-u-s-stocks-very-cheap-likely-to-rise.html

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Why profits won't plunge

Why profits won't plunge

http://finance.fortune.cnn.com/2012/04/12/no-profit-plunge

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How Wealth Reduces Compassion

How Wealth Reduces Compassion

http://rss.sciam.com/click.phdo?i=d335781eb41ff40595d0e0477a44dbb0

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The Dividend-Fund Dilemma - By Jason Zweig

The Dividend-Fund Dilemma - By Jason Zweig

http://feedproxy.google.com/~r/ValueInvestingWorld/~3/kPdWVhu5yVA/dividend-fund-dilemma-by-jason-zweig.html

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Historical Real Return on Retained Earnings for the S&P500

Here's a chart using the S&P500, showing the return on retained earnings for the past 5 years at each point (the data goes back about 75 years).  I use the real earnings increase from 5 years ago to now, and divide it by the sum of retained real earnings over that time.

This seems to indicate that there is usually a sustained period of positive real returns on retained earnings for a few years before it turns back.  I was a bit surprised to see 35-40% as the peak, meaning that for every dollar retained over 5 years, the earnings grow by $0.35 to $0.40 on the dollar.  I guess that is offset by the poor years in between where all those retained earnings are lost (and then some).

When you factor in that the payout ratio of the S&P500 has gone from ~60% at the beginning of this period to ~30% right now, this effect is likely to be a much larger part of stock price variation going forward.

Over the next 5 years, if the payout ratio stays at 30%, and the retained earnings return is 30%, you'd expect the S&P500's real earnings to be at about double what they are today... even if the PE multiple doesn't change, that chalks up to 15% return per year!

Article about John Maynard Keynes as an investor

http://online.wsj.com/article/SB10001424052702304177104577313810084976558.html

New Berkshire Managers Combs and Weschler Delivering Warren Buffett-Like Returns

http://www.gurufocus.com/news/171049/new-berkshire-managers-combs-and-weschler-delivering-warren-buffettlike-returns