This is a chart showing implied and actual total returns using Shiller PE. It assumes mean reversion to average valuations over ten years. Blue: actual total return (10-year CAGR). Each point is the annualized return, dividends included, that you'd have earned by investing on that date and holding for ten years. The line stops around 2015 because the ten-year results after that date aren't known yet. Red: implied total return. This is a model's forecast, made at each date, of the next ten years' annualized return. Yellow: average total return. This is the long-run average up to each point, settling around 9–9.5% a year. It's the "normal" baseline. Cheap markets imply high future returns and expensive markets imply low ones. The model has worked reasonably well. Red and blue move together through most of the 20th century. The model flagged low returns before the 1929 crash, high returns out of the Depression lows, high returns from the cheap markets of the late 1970s and early 1980s, and near-zero returns at the 2000 dot-com peak. Actual returns then came in slightly negative for 2000–2010. The current reading is extreme. The red line ends near 0–1%, the lowest level on the entire chart and at or below the 2000 bubble peak. It sits far below the ~9% historical average.

This could be the fifth consecutive week without a 1% gain or loss for the week for the S&P 500. May 2023 last time we saw that. The old saying not to short a dull market comes to mind.

"Nvidia’s market valuation has collapsed. The chipmaker may have the fastest revenue growth of the Magnificent Seven tech giants, but it also has the lowest multiple at 16 times profits expected over the next 12 months." @jwittenstein

Stocks and Treasury Bond Yields are now the least correlated this century 🚨 🚨

FUN FACT 🚨: Banks are down more than 10% from a 30-day high while the S&P 500 is less than 1% away from an all-time high ✅ The last time this happened was January 2000, 2 months before the Dot Com Bubble Burst 👀