The S&P 500 Index currently has a real earnings yield of -2.9%, meaning that without continued growth in company results, investors would lose 2.9% when adjusted for inflation, the strategists led by Savita Subramanian wrote in a note on Wednesday. “Last time the real earnings yield was this negative was 1947.”I don't think any of those will prove to be safe havens, at least not initially. Natural gas and producers are an exception because it can be uncorrelated. I do think enegy will greatly outperform, but energy stocks may also fall in price in a bear market. I'm increasingly biased towards holding futures on the commodities. I could be wrong about energy stocks, I'm not pounding the table there, but I would be surprised if energy stocks went up in a bear market. (I'm also still leaning to the first wave of a possibly decade-long churning bear market to come via deflationary forces.) Actual physical real estate may hold up and REITs may outperform relative to stocks. Financials could get wrecked if the Fed loses control and inflation is higher for longer, and long-term rates rise too quickly as a result. Maybe I'm wrong about financials because in relative terms it looks undervalued compared to the S&P 500 Index, but as a bear, that only makes me think the losses in tech are going to be insane. International will probably be a bloodbath to start if the dollar goes higher.In each of the previous four times that real earnings yield was negative, a bear market was the result, according to the strategists, who advised investors to seek refuge in inflation havens, such as energy, financials and real estate. Expectations that inflation will moderate from 6.2% to 2.5% over the next 12 months may prove too optimistic, as that would imply the sharpest drop in four decades, they said.
Cultural Cash Cows
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FEEDI confess, I’ve never heard of Anpanman in my entire life.
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