Outside the Box

Scrambling for Returns

February 19, 2013

In this special edition of Outside the Box, World Money Analyst contributor Ankur Shah digs in his heels to help us all stay uphill from the slow-motion, jumbled landslide of bond yields and equity returns. Putting some solid analysis under our feet, he leads us onward and upward, dodging dislodged corporate-earnings boulders, relaying warnings shouted back by Head Sherpa Bill Gross, guiding us up the narrow but rock-solid ridge of dividend yields – and what’s that we see glimmering up there, through the swirling mists; can it be this mountain really is capped with gold? To the summit, then!

In all seriousness, Ankur gives us a somewhat technical analysis of the potential for future stock-market returns. This makes a great companion piece to the work Ed Easterling and I did a few weeks back on secular bear markets. In short, the data are not consistent with the beginning of a new secular bull market. Returns are likely to be muted over the next few years.

And how long can total corporate profits continue to stay at all-time highs in terms of GDP? That factor has always been mean-reverting. For a secular bull market to begin from here, we would have to see that percentage go yet higher in what is a low-growth world. Stranger things have happened, but do you want to bet against gravity, and without some way (like a new growth engine) to counteract it?

Ankur and the rest of the World Money Analyst  team surefootedly tackle the challenges of investing in uncertain times. Their mandate is to deliver the view from the summit, expanding your vision beyond the US to encompass the entire planet. If you like the piece below, I recommend you check out World Money Analyst. Its global perspective will broaden your investing horizons to take in a whole new world of intelligent, risk-sensitive opportunities.

As an aside, Mauldin Economics just recently added World Money Analyst to its quiver of publications. I have read it admiringly for some time, and when the opportunity came to acquire it, I did so without hesitation. I love the truly global view and specific recommendations from a very solid cast of characters. From their far-flung perches, they look on the world differently than most of us. They make me think about a different set of opportunities and remind me that we still live in a world where opportunity waits over every horizon.

Plus, I saw the opportunity to weave in a few of my own contacts who deserve a wider audience: proven talents with great records, some of whose names you know. This is a truly great letter for those looking for global investment recommendations – and at a very reasonable introductory price. You can learn more by clicking here.

And now, let’s think nimbly about the stock markets and future returns.

John Mauldin, Editor
Outside the Box

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Scrambling for Returns

By Ankur Shah

Success in investing, as with life, sometimes boils down to timing. When I graduated from college in the late ‘90s, I actually had an offer to join PIMCO, which at the time was a relatively small, fixed-income manager tucked away in Newport Beach, California. I remember visiting their headquarters building, with its sweeping view of the Pacific Ocean. I could only imagine Bill Gross…

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