In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discussed Is This Market Rhyming With 1973-1981?. Here’s a excerpt from the episode:
Jake: There was a little table that somebody– I don’t know where the source came from, but [unintelligible [00:23:29], one of my friends posted it and it showed the 1973 through 1981. Just different asset classes and what did they do on each year. The CAGRs on them are kind of interesting. The first one is on CPI for that time period and he had a 9% CAGR during that.
Tobias: CPI was 9%-
Tobias: -year on year?
Jake: 73 to 81.
Tobias: That’s roughly where we are now. We’ve had a year at least 8%, maybe more than that.
Jake: Yeah, and what’s funny is, you watch it change 73%– I’m going to go through them– 6.2%, 11.1%, 9.1%, then you have three years where it’s 5%, 6%, 7%, and then 11%, 13%, 10%. So, you thought maybe, “Oh, we’re a little bit past this.” And then, “No, it’s back with a vengeance for three more years.” But 9% on that, so then against that you have the 10-year Treasury did 3.4%. Your real is 5.5% in the whole.
Bill: There you go. That’s what I always say about why should bonds yield more than inflation. There’s the answer. They didn’t.
Jake: They didn’t. S&P 500 total return, 5.3%. 4% real negative.
Tobias: Was this for a decade? Oh, no, 73 to 81? Sorry.
Jake: 73 to 81. Yeah. Value stocks, I don’t know how they define that, but did 13.6%.
Jake: You had a real 4.6% return. NASDAQ, 4.3%. You were under the S&P little bit better than treasuries obviously, negative real. Energy index did 35% CAGR.
Jake: And then the Precious Metals Index did 25% CAGR.
Jake: Interestingly, last year we’ve seen energy certainly not put up, I don’t know. Well, maybe it is 35% CAGR, I don’t know. But definitely, Precious Metals haven’t seemed to have kept up with that analog yet. I don’t know if it’s waiting to happen or if it’s not going to happen, but I find that to be a little bit curious. That’s the one thing that isn’t driving right now.
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