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100-Year Market Concentration Is Huge Risk To Long-Term Stock Returns
When it comes to predicting stock returns, about the best you can do is present "a range of likely outcomes."
After all, "the future" -- and everything to do with the future, other than the fact that you don't have one beyond your personal sell-by date -- is "inherently uncertain."
The bits in quotes are from a new note by Goldman's David Kostin, who suggested investors prepare for lower annualized stock returns over the next decade. Kostin uses five variables for the model: The CAPE, the freq
So own names away from the concentration. Forward P/E of S&P 500 ex-Megas (“SP493”) is about 19X, 3 points lower than S&P 500 with Megas. SP493 profit margin is about 1.5 points lower than SP500.