Wednesday, May 14, 2025


Stock Market Drives Higher

Long Term Bonds Sag!

This short term movement upwards for stock prices as measured by the S&P 500 ramrodded the Shiller PE to 36.13 while at the same time long term bonds sagged in value pushing up their overall yield – Vanguard’s Long-Term Investment-Grade Fund to 5.52%!

This has moved Ben Graham’s formula closer to a crash alert basis.  With yields spiking higher and stocks valuations popping upwards those buying or holding the S&P 500 stocks (dividend reinvested) – [go to sleep like Rip Van Winkle awaking 10 years from now] – will underperform bonds (interest reinvested) during the same time period.

Simply put the earnings power you receive for your purchase of the S&P 500 is 1 ÷ 36.13 x 100 = 2.76% as compared to investment grade Long term corporate bonds at 5.52%.  You are now simply overpaying for corporate profits that which in the end drives stock prices along with dividend payments.

How much are you overpaying simple arithmetic:  (5.52 – 2.76) ÷ 2.76 x 100 = 100%!  Your interest earned is now 100% greater than the price you pay today for the earnings of the S&P 500.  The probability for long term investment grade corporate bonds outperforming stocks is now highly likely!           

Margin of Safety!

Central Concept of Investment for the purchase of Common Stocks.
"The danger to investors lies in concentrating their purchases in the upper levels of the market..."

Stocks compared to bonds:
Earnings Yield Coverage Ratio - [EYC Ratio]
Lump Sum any amount greater than yearly salary.

PE10  .........36.13
Bond Rate...5.52%

EYC Ratio = 1/PE10 x 100 x 1.1 / Bond Rate

2.00+ Stocks on the give-away-table!

1.75+ Safe for large lump sums & DCA

1.30+ Safe for DCA

1.29 or less: Mid-Point - Hold stocks and purchase bonds.

1.00 or less: Sell stocks - Purchase Bonds

0.50 or less:  Stock Market Crash Alert!  
Purchase 30 year Treasury Bonds! 

Current EYC Ratio: 0.55(rounded)
As of  5-14-25
Updated Monthly

PE10 as report by Multpl.com
DCA is Dollar Cost Averaging.
Lump Sum is any dollar amount greater than one year salary.
Over a ten-year period the typical excess of stock earnings power over bond interest may aggregate 4/3 of the price paid. This figure is sufficient to provide a very real margin of safety--which, under favorable conditions, will prevent or minimize a loss...If the purchases are made at the average level of the market over a span of years, the prices paid should carry with them assurance of an adequate margin of safety.  The danger to investors lies in concentrating their purchases in the upper levels of the market.....

Common Sense Investing:
The Papers of Benjamin Graham
Benjamin Graham

Monday, May 12, 2025

 

When is the best time to buy high tech??

A.I. is no doubt is and will continue to be a transformational technology, however animals spirits of investors has not changed since the dawn of markets.  These stocks have now been bid up so high in price in order to maintain a justification for their respective price to earnings multiple, growth will have to be astronomical. 

During the 1990's these high tech stocks were all the rage the NASDAQ peak (March 2000) at 5,048 and then crashed bottoming out on October 9, 2002 at 1,139 for a 77% decline!  From the year 2000 peak to the next peak (after the crash) in the year 2015!

Today (4-14-2025) the NASDAQ and especially any A.I. type company their shares have been pushed to the moon requiring a growth rate never seen in world history.  This will be no different than the high tech crash of the early 2000's how low is anyone's guess.  I will say this it will be greater than 60% I can only guess; 60% to 85%.

Once they crack the 60% barrier then you can begin dollar cost averaging with VALUATIONS far more in line with the real aspects of growth.  Their growth will be phenomenal. Buying at favorable valuations your dollar growth will be significantly above average if A.I. is truly a revolution.

  DYI


Thursday, May 8, 2025

 

Double Bubble

Double the Trouble!

When will the Crash Begin?



 Nose Bleed

Valuations

Equals Sub Par Returns!

Source:  Of Dollars and Data

10k invested

How long before I made my money back including ravages of inflation???

S&P 500 (early years historical recreation for index)

All dividends reinvested no further investments made.

 

Shiller PE at 22...Year 1902 recovered 1921...20 YEARS

Shiller PE at 27...Year 1929 recovered 1934...6 YEARS*

Shiller PE at 22...Year 1964 recovered 1979...16 YEARS**

Shiller PE at 17...Year 1972 recovered 1983...12 YEARS

Shiller PE at 44...Year 2000 recovered  2014...15 YEARS


Shiller PE at 37...Estimation 2034 to 2039... 10 to 15 YEARS.

*The reason for such a fast recovery from the 1929 to 1932 crash as the decline increased dividend yields significantly AND the economy experienced MASSIVE DEFLATION thus surging purchasing power of the U.S. dollar.

**1971 President Nixon (Republican) ended the last vestige of the gold convertibility of U.S. dollars. Since that time the only backing the U.S. dollar has is the taxing power of its citizens. The 1970's and early 1980's was marked by very high inflation. 



Monday, May 5, 2025


Fabricated Mass Bang Bang at the Apalachee High School in Winder, Georgia.
Performed on September 4, 2024.

The "Apalachee Strong" / "Barrow County Strong" - another low rent theatrical production sponsored by the Strong Cities Network.

The narrative so far:

A White, 14 year old boy named "Colt Gray", brought an "AR-15 styled rifle" to school, where he allegedly killed four people and injured nine others. It was reported that the FBI interviewed Gray and his father in 2023 for making threats to carry out a school shooting. This is the same nonsense the Feds use in these staged events to feign ineptitude when dealing with "mental health red flags", so they can introduce more totalitarian measures to ensure the "Safety" of the "Community".

The backstory given about the family is interesting. The mother, Marcee Gray, was formerly the Quality Assurance Manager of Georgia-Pacific LLC and the Quality manager of Olympic Steel. 

They do not list any current occupation for her and they make it a point to mention that the father was physically abusive, and that they were divorced. CBS reported that Colt Gray lived with his father; the mother lived with the two other children.

 This is an unlikely arrangement if the father was truly abusive. 

They stated that Colt had a fascination with Adam Lanza and the Sandy Hook Fabrication. 

This is unbelievably contrived and the family's participation is likely motivated by money and legal issues.
 

This entire event was a multi-agency drill gone "Live", to test out the school's new security system:

"The Apalachee High School staff alerted authorities of an active-shooter threat Wednesday by pressing an emergency button on badges made by an Atlanta-based company, Barrow County Sheriff Jud Smith said at a news conference Wednesday night, adding that the security system has been in use at the school for about a week.

Smith said the devices were made by Centegix. The company produces badges that are integrated with camera surveillance and can be pressed to alert security staff of an emergency. The badge then “alerts us that there is an active situation at the school for whatever reason,” Smith said.

Schools in Texas will have similar systems installed starting in the 2025-2026 school year. New Jersey and Florida already require them at schools, and New York and Tennessee have urged schools to consider installing them.

Such initiatives have come in the wake of Alyssa’s Law, a series of legislative efforts that advocate for public elementary and secondary schools to install silent panic alarms that can alert law enforcement in the event of an emergency. The law was named after Alyssa Alhadeff, a 14-year-old student killed (faked) during the 2018 shooting at Marjory Stoneman Douglas High School in Parkland, Fla."

Parkland was another monster Fabrication. 

Crisis actor and ringleader of "March For Our Lives" and "Students Demand Action", David Hogg, continues to endorse fabricated school shootings alongside all of the other larger players. These people never go away, they tirelessly work to psyop the masses in order to introduce more policies to further the JWO agenda. They will continue to use fake events to transform all schools into an Orwellian hellscape while simultaneously annihilating all other rights.

The Parkland Strong Fabrication:   gab.com/Lateralus1/posts/109820593820078790

Here is the company CENTEGIX, check out these psychopaths. They are using this simulation drill to push the gun control and mental heath agenda - as always. They are winning and America is still oblivious.


They are also seeking to hold gun manufacturers responsible after they stage fabricated events. Bloomberg's "Everytown For Gun Safety" and Shannon Watts from "Moms Demand Action" are leading the charge for this change. All accomplished through Fabrications, every single event listed in these articles was not real.


This Fabrication in Georgia uses the exact same formula as all the rest:

1. An absurd, illogical and clearly scripted narrative.

2. The AR -15 "assault rifle" - "weapons of war".

3. The gun control agenda, the mental health agenda and new policies regarding security immediately pushed.

4. A vigil was held mere hours after this Hoax. There will most likely be others over the next few days.

5. Crisis actors delivering scripted statements alongside quips, such as, "I thought it was a drill",  while laughing and smiling. No trauma, no authentic emotional display - no realism.

6. Immediate response time from multiple agencies including the ATF, the FBI, and all the usual suspects.  So fast as if they were already there!

7. Go Fund Me accounts immediately posted.


8. Involvement with Victims First , The National Compassion Fund, Classroom of Compassion, Bloomberg's "Every town For Gun Safety", Shannon Watts, Moms Demand Action, Students Demand Action, March For Our Lives and Sandy Hook Promise - they are all criminal organizations that assist with these events.

9. "Apalachee Strong" and "Winder Strong" hashtags were created to declare allegiance to the Strong Cities Network/JWO agenda and to circulate propaganda.

10. "Apalachee Strong" merchandise was immediately created and sold.


11. UN language used incessantly.

12. ZERO hard evidence.


1- 2. Horrible crisis actors.

3-4. Strong Hashtags/Slogans

5. The See Something Say Something app and the Sandy Hook Promise app - security to teach children to snitch for the state.

6. "Praying through Tragedy" & Language of a Psyop.

7. Mugshot of patsy and propaganda laden with UN language. Advertising the Go Fund Me grift.

There are plenty of violent crimes and gun crimes committed by juveniles every year, some involving fatal conclusions, and I don't see those parents being charged.

This changes the face of everything we have thought about the legal system in the US. If the parent did not participate or even have foreknowledge of the crimes, how can they be charged?

If this catches on nationwide, every parent of a child who commits a crime in this country will be sitting in jail.  No one can know what another person is doing 24 hours a day or especially be responsible for the actions of another.  The vast majority of these "shooters" were "on the radar" of law enforcement why aren't those officers being charged then as well, when they actually knew there was a potential problem, unlike the parents?


If Viruses Do Not Exist As Claimed, What Are Quack-Cines For?

Saturday, May 3, 2025

 Gold

Breaks the 1,000% Barrier!

Since the year 2000 stocks (S&P 500) total return - dividends reinvested - is up 493%.  

Gold since the same time period is up 1,046%! 

The Dow to Gold Ratio is at a mid point at 12 to 1.  The mean is 10 to 1 with a high probability going to 3 to 1 and even possibility of 1 to 1.  At those levels gold will be soaring with stocks across the board with prices (valuations) so low they will be at the give-away-table.   

From High to Low - Since Year 2000

+ 1046.1% Gold
+ 358.1% Transports
+ 328.7% Nasdaq
+ 279.0S&P 500
264.5% Utilities
253.7% Dow
+ 127.4% Oil
+   90.7% Swiss Franc
+   27.8% 30yr Treasury Bonds

December 1999 Shiller PE10 was 44.19               
August 2000 S&P 500 dividend yield was 1.11%  

Shiller PE10 5-1-25 is 34.47  100% above its mean (17.21) since 1871.

S&P 500 dividend yield 3-1-25 is 1.35%  68% below its mean (4.23%) since 1871.

[Shiller PE10 & dividend yield is reported using data from the beginning or end of the month when I update.  It may or may not exactly be the first or last trading day of the month.]

3-1-25
S&P 500 Stock-earnings yield 2.90%
Bond rate 5.41%
Stock-earnings yield/bond yield = 54% of  present bond yield.
Dividend yield/bond yield = 25% of the present bond yield.

*Measured by valuations.  Year 2000 Shiller PE peaked at 44.19 with a scant S&P 500 dividend yield at 1.11%.  These high Shiller PE or low dividend yield has not been surpassed since 1871.

Stock-earnings yield (December 1999) was 2.26%.  High grade corporate bonds were in the 7% range in abundance.  This would push my EYC ratio - [see Ben Graham's Corner] - at 0.36!  Anything below 0.50 is in crash alert range.    
***************************
It is easily seen in the year 2000 the Nasdaq was horribly overvalued and gold was on the give away table, such lopsided returns 20+ years later!

Thursday, May 1, 2025

Cash & Gold are kings; Bonds have value; Stocks remain in the dog house!

 

Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 5/1/25

Active Allocation Bands (excluding cash) 0% to 50%
46% - Cash -Short Term Bond Index - VBIRX
32% -Gold- Global Capital Cycles Fund - VGPMX **
 22% -Lt. Bonds- Long Term Bond Index - VBLTX
 0% -Stocks- Total Stock Market Index - VTSAX
[See Disclaimer]
** Vanguard's Global Capital Cycles Fund maintains 25%+ in precious metal equities the remainder are domestic or international companies they believe will perform well during times of world wide stress or economic declines.  


Margin of Safety!

Central Concept of Investment for the purchase of Common Stocks.
"The danger to investors lies in concentrating their purchases in the upper levels of the market..."

Stocks compared to bonds:
Earnings Yield Coverage Ratio - [EYC Ratio]
Lump Sum any amount greater than yearly salary.

PE10  .........34.47
Bond Rate...5.41%

EYC Ratio = 1/PE10 x 100 x 1.1 / Bond Rate

2.00+ Stocks on the give-away-table!

1.75+ Safe for large lump sums & DCA

1.30+ Safe for DCA

1.29 or less: Mid-Point - Hold stocks and purchase bonds.

1.00 or less: Sell stocks - Purchase Bonds

0.50 or less:  Stock Market Crash Alert!  
Purchase 30 year Treasury Bonds! 

Current EYC Ratio: 0.59(rounded)
As of  5-1-25
Updated Monthly

PE10 as report by Multpl.com
DCA is Dollar Cost Averaging.
Lump Sum is any dollar amount greater than one year salary.
Over a ten-year period the typical excess of stock earnings power over bond interest may aggregate 4/3 of the price paid. This figure is sufficient to provide a very real margin of safety--which, under favorable conditions, will prevent or minimize a loss...If the purchases are made at the average level of the market over a span of years, the prices paid should carry with them assurance of an adequate margin of safety.  The danger to investors lies in concentrating their purchases in the upper levels of the market.....

Common Sense Investing:
The Papers of Benjamin Graham
Benjamin Graham

%
Stocks & Bonds
Allocation Formula
5-1-2025
Updated Monthly

% Allocation = 100 x (Current PE10 – Avg. PE10 / 4)  /  (Avg.PE10 x 2 – Avg. PE10 / 2)]
Formula's answer determines bond allocation.


Core Bond Allocation:  117% 

% Stock Allocation     0% (rounded)
% Bond Allocation  100% (rounded)

Current Asset: Vanguard Long-Term Investment Grade Bond Fund   

Logic behind this approach:
--As the stock market becomes more expensive, a conservative investor's stock allocation should go down. The rationale recognizes the reduced expected future returns for stocks, and the increasing risk. 
--The formula acknowledges the increased likelihood of the market falling from current levels based on historical valuation levels and regression to the mean, rather than from volatility. Many agree this is the key to value investing.  
Please note there is controversy regarding the divisor (Avg. PE10).  The average since 1881 as reported by Multpl.com is 16.70.  However, Larry Swedroe and others believe that using a revised Shiller P/E mean of 19.6 , the number since 1960 ( a 53-year period), reflects more modern accounting procedures.

DYI adheres to the long view where over time the legacy (prior 1959) values will be absorbed into the average.  Also it can be said with just as much vigor the last 25 years corporate America has been noted for accounting irregularities.  So....If you use the higher or lower number, or average them, you'll be within the guide posts of value.

Please note:  I changed the formula when the Shiller PE10 is trading at it's mean - stocks and bonds will be at 50% - 50% representing Ben Graham's Defensive investor starting point; only deviating from that norm as valuations rise or fall.

Current Allocation:

Vanguard Long Term Investment Grade Bond Fund


Possible Allocations to Bonds vs Stocks:

Bonds %
100%+  Vanguard Short Term Investment Grade Bond Fund 

99% to 65% Wellesley Income Fund

64% to 35% 1/2 Wellesley Income Fund - 1/2 Wellington Fund

34% to 0%  Equity Income Fund
  
DYI

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PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

The Formula.