This week's letter is by Myles Zyblock, who is Chief Institutional Strategist & Director of Capital Markets Research at the Royal Bank of Canada. I have been reading Myles for a number of years, when he was first at another firm whose quality of work has dropped since he left.
Myles takes a look at what the next ten years might hold for investors in the equity markets. Using both PEs and an accounting based approach he concludes that investors will be very disappointed if they expect returns over the next ten years to be anywhere close to those of the late 1990's.
This is another example of research that supports my belief that we are in a secular bear market for the next 5-10 years and why I picked it for this week's Outside the Box.
This week's letter is from my good friend Ed Easterling of Crestmont Research in Dallas. Ed helped co-author a couple of Chapters in my book "Bull's Eye Investing" and that inspired him to write his own book. Ed's recently published, a must read book in my opinion, is called "Unexpected Returns: Understanding Secular Stock Market Cycles."
This article uses some of the insightful research in the book to examine current market conditions and why Ed thinks the "Four Categories" are pointing to a bear market decline in the near future.
Successful investing is all about recognizing and managing risk and not looking for the next home run. It is a lesson we all need to understand. I hope you enjoy this week's edition of Outside the Box.