To The Moon

Valuations are, in my long experience, a very poor guide on their own to short or even medium-term outcomes. valuations are an excellent and important starting point, but must be paired with macro factors, and tactical elements to gain conviction and finesse timing The table below outlines the major parts of the research process: typically the process involves starting with a valuation anchor to guide the strategic view, then bringing in macro/cycle/policy considerations to build out the medium-term view, and then rounding it out with tactical considerations (sentiment/technicals) to help finesse the timing aspect and raise conviction in the idea. No wonder the 60/40 portfolio got messed up this year, it was trading at record expensive valuations in Dec 2021!Interesting follow-on chart, this time looking at the expected return outputs from our capital market assumptions... 60/40 was indeed "dead' in terms of forward looking returns for much of late 2020-2021. Looking very much alive and kicking now tho https://twitter.com/topdowncharts/status/1577861671300710400