Relative Returns, Bulls and Bears – Oh My!

Thurs, AUG 24th, 2017

I appreciate high quality simple data points and explanations on complex topics. In our industry the reverse is often the case. *Pay attention to everything you possibly can, no matter how esoteric. “Rework” it. Over-complicate it. Draw irrelevant conclusions from it. Hopefully sound smart in the process. Rinse. Repeat.* This, in part, explains why the contemporary discussion of valuation and stock market returns is so convoluted. And yet it could be so simple.

First, we know that markets don’t just die of old age nor because price levels are perceived as elevated. And second, time-tested measures of valuation are more relevant than … well … made up ones. OppenheimerFunds CIO Krishna Memani – a man I’ve met personally and respect immensely – recently authored a paper outlining several reasons the bull market should continue. Many of these I have blogged about in the past and openly discussed in the financial press. Nevertheless, I decided to share Krishna’s piece and the Bloomberg article both for the quality of the data and because I felt that it nicely distilled much of the valuation and returns noise down into a simple to view and understand logic. From Bloomberg:

Simple. Elegant. Relevant. Nice hat trick, Krishna.

Jason L. Ware, MBA / Chief Investment Officer
Albion Financial Group
jware@albionfinancial.com
(801) 487-3700

About Albion Financial

Established in 1982, Albion Financial Group is an independent, fee-only wealth advisor and investment manager located in Salt Lake City, Utah. Over the last three decades Albion Financial has become a nationally recognized, locally respected, award-winning provider of customized wealth management services. From the firm’s humble beginnings, Albion has grown into one of the Utah’s largest privately held wealth advisory firms. Albion’s suite of investment services includes in-depth market research, customized portfolio management, and comprehensive financial advising. As a fiduciary and as a fee-only advisor, Albion measures success by how well we have done in guiding our clients to achieve their financial goals; not by the amount commissions received or investment products sold.