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January 2018 Watchlist

Stocks are currently trading at high premiums and it’s hard to find companies where there is a reasonable margin of safety. When looking at the Cyclical Adjusted Price to Earning (CAPE) ratio, the likely future returns from equities over the timescales of 10 to 20 years is low. Only energy seems like a reasonable investment, and maybe telecom. Both have been lagging the S&P 500 for a while, but so what? Does that mean it’s time to invest? (more…)