My Market Prediction – S&P 500 at 10,000 POINTS Very Possible!

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My Market Prediction – S&P 500 at 10,000 POINTS Very Possible!

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46 Comments

  1. 3:54 So, that’s how we got the expected next decade without real-return but keeping most people happy with nominal returns.

  2. Sven
    I would like to ask few questions
    1. Which one you prefer as measure of profitability ROE or RNOA?
    2. US is expected to see more growth in the economy despite higher interest rate while UK and other European countries have started to see slower economy, if US decided to raise rates do you think European countries would also raise it or would they halt the rates hike?

    1. 1. money in the bank:-)
      2. it is all engineered, both in the US and EUrope, so forget about logic there

  3. Sven, the odds of the SP500 going down, up, double or triple are all the same. I’m not an experienced investor like yourself but acting now on something that might happen in the future is the definition of “risky”. Good investment are good investments regardless of the market.

    1. That is incorrect. The odds of the market going up, down or sideways are not the same. The expected Return of the stock market is influenced by many external factors like interest Rates, politcs and economy strength in General. Also, the higher stock prices are climbing in relation to underlying Business Earnings, the more likeley it is that the trend reverses. After overvaluation comes correction.

      I can recommend you the book „the intelligent Investor“ by Benjamin Graham if you want to learn more about market mechanics and Value Investing

    2. In the short term, it is equally likely to go up, down, or sideways. In the long term, should rise in proportion to earnings growth which should correlate with economic growth. Whether it will double or triple depends on time frame. You are right that predicting market movements in the near term is close to impossible

    3. If the odds of sp500 losing half it’s value, doubling in value, and tripling in value are all the same, it would be mathematically impossible to loose money over a large number of occurrences. The odds of sp500 reaching various levels is very easy to estimate using option prices, and it would be foolish to invest without knowing the probability of a one, two and three standard deviation move.

  4. Sven, I have a question. For an investor who is currently long the market (SPY/IWM/QQQ). Would it make sense to sell calls at the moment? The option premium is very rich due to high VIX, but it would obviously be annoying if the market bounces back to all time high within the next 6 months.

  5. Hi Sven. I agree the s&p isn’t looking attractive at the moment. What is your view on reits like $o? They are down big time and are approaching 6-8% dividend yield. Seems interesting to me

    1. O has diluted it’s shareholders massively. When their finances won’t catch up they’ll dilute even further.

    2. @Synchrothron my question is more about reits in general. O is just an example stock in this sector. Almost all reit stocks have been declining for 18 months now

    3. It depends on where interest rates will go – nothing more! Can you predict interest rates?

    1. yeah, trillion, billion… ahhhh! I was born when a million was a lot of money!

  6. Sven, As a fairly new investor, it’s super discouraging hearing that stocks generally are somehow overvalued – even though the Russell 2000 is trailing at relatively low multiples by historical standards, fell >20% in 2022 and is down 5% YTD. Over the last five years it’s up just 11.5%. Hearing these takes, despite the position on the ground, makes me just want to quit stock picking for good

    1. it is about knowing what you can expect from an investment and then comparing to other options and also adjusting your strategy to it!

  7. 4200 to 10000 in 7 years = CAGR of 13%. Quite a reasonable expectation at the same PE multiple as of now and with GDP growth around 7% – 8% and inflation 4% – 5%.

  8. Always amazing to listen to your perspective. If i had to speculate i believe that money printing and inflation will be continued from the governments in order to pay the current holes. And i don’t believe the higher for longer narrative as the cost on the government debt is huge, and in places without fixed mortgages people will literally lose their houses.

  9. Thanks for the balanced perspective Sven! When you say USA stocks are overvalued and have more risk, I would generally agree, but I have also noticed that small caps in the USA are not so expensive due to rate and recession worries. They have not gained much over the past 4 years, still sitting near 2019 levels. The entire USA CRSP small cap index for instance as offered by vanguard is trading at a PE ratio of near 12x, usually a recession level evaluation, not seen very often. The gap between large and small cap indexes is one of the largest it has been at in a long time due to the high evaluation of the top 10 tech companies. What are your thoughts on this? Are USA small caps a better buy or is this a “fair” evaluation for the refinancing risk of higher rates? Thanks as always

    1. @Value Investing with Sven Carlin, Ph.D. Thanks, yeah they were definitely at extremes in late 2021. They seem much cheaper now, but I wonder how many are unprofitable and if that is skewing the index. They may also be more rate sensitive, no doubt why the market has been pessimistic on them for a year. But historically, this part of the USA market grows just as well as the large caps, so if that evaluation is real, the risk/reward may be a lot better than S&P500. I personally prefer individual stocks and that is what I’ve been investing in for a while now, but trying to find the best index for my new self-directed vanguard pension fund from work, for which I am required to pick from a few vanguard funds only… Had wondered what you thought of the small cap USA CRSP index.

  10. The problem is we have 7 stocks running the market. Without tech, we would see how bad things are. Tech is the only thing positive on the year. Not interested in buying until tech bubble pops.

  11. Well since I joined your platform in 2021 I am nothing but down in all of your analyzed businesses. If I had put my money in an all world index fund I would be certainly in the positive.
    I hear you preaching the same risk mantra over and over again, „you will see whos swimming naked“ , „I want 2x“ , „deal with the Devil“ and so on whilst performing nothing but bad.
    Of course, as soon as a crash will Happen, you will say you were right but even a broken watch is right two times a day.
    To me you‘re a great salesman making money by offering THE solution for the fear you create.
    It took me 2 years to realize who I am dealing with.

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