{"id":10791,"date":"2015-08-06T06:23:37","date_gmt":"2015-08-06T11:23:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10791"},"modified":"2015-08-06T06:23:37","modified_gmt":"2015-08-06T11:23:37","slug":"birinyis-sp-3200-call-bull-from-a-30-year-bull","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10791","title":{"rendered":"Birinyi\u2019s S&P 3200 Call\u2014\u2014Bull From A 30-Year Bull"},"content":{"rendered":"

Birinyi\u2019s S&P 3200 Call\u2014\u2014Bull From A 30-Year Bull<\/a><\/h3>\n

When stock market guru Laszlo Birinyi told bubblevision today that S&P 3200 would be reached by 2017, his argument was essentially to keep on keeping on:<\/p>\n

\u201cWhat we\u2019re really trying to tell people is stay with it, don\u2019t let the bad news shake you out\u2026There\u2019s no reason we can\u2019t keep on going<\/strong><\/em>,\u201d he said.<\/p><\/blockquote>\n

That got me to thinking about when I\u00a0first ran into Birinyi at Salomon Brothers way back\u00a0in 1986. He was then a relatively underpaid numbers cruncher in the equity research department who was adept at making the bull case. Nigh onto 30 years later he has\u00a0become a rich man crunching the numbers and still\u00a0making the bull case.<\/p>\n

Indeed,\u00a0I\u00a0don\u2019t ever recall when he wasn\u2019t making the case to be long equities, and as the chart below shows, you didn\u2019t actually have to crunch the numbers to get there. Just riding the bull from\u00a0200<\/strong><\/em>\u00a0in January 1986 to today\u2019s approximate\u00a02100<\/strong><\/em>\u00a0on the S&P 500\u00a0index computes to a\u00a08.4%<\/strong><\/em>CAGR and a\u00a010% annual gain\u00a0with dividends.
\n\"^SPX<\/a><\/p>\n

^SPX<\/a>\u00a0data by\u00a0YCharts<\/a><\/p>\n

Even when you take the inflation out of it, this 30-year run is something close to awesome. But, alas, that\u2019s my point. It\u2019s too awesome.<\/p>\n

In inflation-adjusted terms, the S&P 500 index rose by 6.2% per annum over the last three decades. That compares to just a 2.2% annual advance for real GDP,\u00a0meaning<\/strong>\u00a0that the market has risen nearly\u00a03X faster than national output in real terms.<\/strong><\/em><\/p>\n

You don\u2019t have to be a math genius to realize that a few more decades of that kind of\u00a0huge annual\u00a0spread, and the stock market capitalization would be several hundred times larger than GDP.<\/p>\n

Likewise, you don\u2019t have to be a PhD in quantitative historical research to recognize that the last\u00a0three decades\u00a0are utterly unique. If you run the clock backwards by 30 years from the January 1986 starting point, for instance,\u00a0 you get a totally different picture.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Birinyi\u2019s S&P 3200 Call\u2014\u2014Bull From A 30-Year Bull When stock market guru Laszlo Birinyi told bubblevision today that S&P 3200 would be reached by 2017, his argument was essentially to keep on keeping on: \u201cWhat we\u2019re really trying to tell people is stay with it, don\u2019t let the bad news shake you out\u2026There\u2019s no reason […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5186,4792,5979,2120,274,353,7897,696,2443],"class_list":["post-10791","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bull-market","tag-bull-vs-bear","tag-contracorner","tag-david-stockman","tag-equity-market","tag-gdp","tag-laszlo-birinyi","tag-sp","tag-stock-markets"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10791","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10791"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10791\/revisions"}],"predecessor-version":[{"id":10792,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10791\/revisions\/10792"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10791"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10791"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10791"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}