tag:blogger.com,1999:blog-7294165939647321702.post7514873457473190807..comments2024-10-04T14:01:52.359-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: A Random Walk Down Wall Street: Chapter 12Saj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7294165939647321702.post-91050306031686067052009-12-16T21:51:39.361-05:002009-12-16T21:51:39.361-05:00Hi Anon,
Your formula is a different one. It does...Hi Anon,<br /><br />Your formula is a different one. It does make sense, but I would say it underestimates stock returns because companies in the market tend to have above-average returns compared to the average business.<br /><br />Malkiel's formula is based on the formula that a market's price is worth the discounted future cash flows: P = D/(r-g) where,<br />P is price, D is next year's dividend, r is the return, and g is the growth rate of DSaj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-17144417881122350312009-12-13T17:28:53.219-05:002009-12-13T17:28:53.219-05:00Excuse me, i wanted say Stock return = Current Div...Excuse me, i wanted say Stock return = Current Dividend Yield + CPI+ GDP + P/E changeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-47554910214082151612009-12-13T17:00:20.344-05:002009-12-13T17:00:20.344-05:00Stock return formula is not correct, since if the ...Stock return formula is not correct, since if the dividend yield is growing by 10%, the expected return is not 10%. The 10% is the increase in the dividend, not the increase in return. I would say the stock return is:<br /><br />cpi+gdp + p / e<br />cpi = consumer price index<br />gdp = increase of the global economy or the country<br />p / e = exchange rate between the price paid and the price it sells, which reflects the ability of directors to grow the FCF, the perspectives of the company, buying euphoria ....<br /><br />Sorry, I'm using the google translation, I hope you understand meAnonymousnoreply@blogger.com