Unexpected Returns has 24 ratings and 1 review. said: During the summer InvestingByTheBooks will review some older books that . Unexpected Returns has 76 ratings and 5 reviews. Jef said: Quite a Unexpected Returns: Understanding Secular Stock Market Cycles Ed Easterling. and industry colleague Ed Easterling called Unexpected Returns: As you may remember, Easterling’s firm is Crestmont Research. (www.
|Published (Last):||25 February 2014|
|PDF File Size:||15.11 Mb|
|ePub File Size:||3.23 Mb|
|Price:||Free* [*Free Regsitration Required]|
Goodreads helps you keep track of books you want to read. Want to Read saving…. Want to Read Currently Reading Read.
Unexpected Returns: Understanding Secular Stock Market Cycles
Refresh and try eastrrling. Open Preview See a Problem? Thanks for telling us about the problem. Return to Book Page. Preview — Unexpected Returns by Ed Easterling.
Unexpected Returns by Ed Easterling. Extensive analysis and discussion of the long-term seasons in the stock market. Kindle Editionpages.
Unexpected Returns by Ed Easterling
To see what your friends thought of this book, please sign up. To unexpetced other readers questions about Unexpected Returnsplease sign up. Lists with This Book. This book is not yet featured on Listopia. Aug 20, InvestingByTheBooks. During the summer InvestingByTheBooks will review some older books that we never got around to writing about although we think they are important.
Ed Easterling shows that by taking a step back and getting a better overview the investor gains an understanding of secular market cycles that most lack. The basic premise is that the valuation of markets matters and affects expected return during periods of both one and two decades ahead during which trends in PE-ratios give vastly different investme During the summer InvestingByTheBooks will review some older books that we never got around to writing about ezsterling we think they are important.
The basic premise umexpected that the valuation of markets matters and affects expected return during periods of both one and two decades ahead during which trends in PE-ratios give vastly different investment results.
It might be true that in the very long run — say 50 or years — the equity market has an annual return of for example 8 percent, but during a decade or two the average return is often far higher or lower than this. Decades starting with low valuations have much higher average returns than those starting with high valuations.
Contrary to financial theory it is not necessarily so that taking higher risk by for example holding a higher proportion of equity to bonds gives higher expected returns. It simply depends on the starting valuation of both assets. According to the author the correlation between starting PE-ratio and the subsequent year average annual return is percent.
Taking a higher risk could for an investment with a horizon of a decade or two have lower expected return than taking lower risk. Decades that start with high valuations are usually trending sideways despite large cyclical swings.
Further, the author states that investors underestimate the long-term adverse compounding effects of sideways volatility and negative periods. Hence, Easterling argues that depending on which environment we are in at the moment we should act accordingly as investors. With enlightning color pictures and graphs it is shows that over very long time the movements of the equity market reflect the value of corporate cash flows.
Unexpected Returns: Understanding Secular Stock Market Cycles by Ed Easterling
However, during decade-long periods there are huge deviations. The long-term trend in cash flows or earnings is actually remarkably stable. Instead, the secular trends in equity valuations depend on changing in Unexpeccted. Easterling shows that these valuation trends do not depend on the average level of GDP-growth for a period.
If something the correlation is the opposite from what is expected. The author finds a Y-shaped correlation between PE-ratios and inflation levels.
When inflation is really high or there is severe deflation, PE-ratios are low and then there is a sweet spot when inflation is in unexpedted single digits when historic PE-ratios has been high. In the middle part of the book Easterling launches what he calls Financial Physics — a way to predict future equity returns.
Unexpecged future inflation is unknown and also as the correlation between inflation and PE- levels is low I would personally prefer to use some measure of reversal to the mean in PE-ratios. Unexpected Returns makes it clear that the stock market rreturns a faint but strikingly long memory that tilts probabilities in one way or the other thereby changing the returns landscape.
Tom Unxpected rated it it was amazing Mar 02, Matt Weller rated it liked it Dec 28, Visceral rated it it was amazing May 16, Susan Ernsky rated it really liked it Apr 16, Patrick rated it really liked it Jan 27, Yure rated it really liked it May 09, Peter Moloney rated it liked it Feb 18, Daniel Greenberg rated it liked it Aug 01, Evan rated it liked it Jan 13, Uunexpected Helm rated it really liked it Nov 20, Alberto rated it liked it Apr 03, Daniel Haddad rated it really liked it Sep 02, D rated it it was amazing Dec 21, Mark rated it it was amazing Jan 26, Stephen Masri rated it it was amazing Sep 14, David Cai rated it liked rfturns Nov 18, Gaurav Agarwal rated it liked it Sep 24, Mario Garza rated it really liked it Nov 29, Salman rated it did not like it Nov 03, Hyung Wook rated it did not unexpecged it Feb 21, Randall rated it really liked it Jul 11, Ryan marked it as to-read May 30, Luis marked it as to-read Jun 10, Vitalijus Sostak marked it as to-read Jun 23, Diogenas marked it as to-read Jun 26, Azeem Malik marked it as to-read Jul 15, Antti S marked it as to-read Aug unexpedted, Magno marked it as to-read Nov 24, Carlos Martins marked it as to-read Nov 28, Brendan Mullooly added it Dec 08, Spectraz marked it as to-read Dec 14, easyerling Cacophony marked it as to-read Dec 25, Pedro Rocha ferreira marked it as to-read Jan 17, Dieter marked it as to-read Mar 09, Tom Unexpecyed is currently reading it May 25, Emrah Ozaslan marked it as to-read Jul 18, Zach Roesch marked it as to-read Aug easterlign, Leandro Lofrano marked it as to-read Jan 17, Chris Patureau marked it as to-read Jan 29, Nick Kirsch added it Feb 08, Jeremy Carman marked it as to-read Mar 17, Rakesh marked it as to-read Mar 19, Pranoy Kurian marked it as to-read Apr 10, Brandon Evans marked eastwrling as to-read May 06, Bill is currently reading it May 08, Dogdaysinaz marked it as to-read Jun 21, Bill Pryor is currently reading it Jun 22, Arturo marked it as to-read Jul 25, Josh Maher added it Oct 04, Scott marked it as to-read Jan 21, There are no discussion topics on this book yet.
Books by Ed Easterling. Trivia About Unexpected Returns. No trivia or quizzes yet. Just a moment while we sign you in to your Goodreads account.