Recession Management Insights
Explore a presentation on managing during a recession, insights on the history of 12 recessions, the impact of a recession on the S&P 500, and indicators like corporate profit margins. Learn about declining profit returns, warning signs for investors, and added political risks to recession prospects.
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Presentation Transcript
Managing a During a Recession New Canaan Men s Club November 6/2017, Lapham House Presentation by: Paul A. Strassmann, Investment Club
Expected Recession Current market recovery over 110 months. Market recovery reached that much twice in 70 years. Recession may last more than 12 months. Plunge in next recession may be very large.
Corporate Profit Margins Are Recession Indicators http://www.multpl.com/s-p-500-earnings-yield/table/by-year
Why are Corporate Profit Margins Recession Indicators? Earnings/Investments are the drivers of the stock market. When corporate profit margins decline to about 5% a recession occurs. Afterwards the Federal Reserve restores recessions to a prior peak.
Profit Returns from Investments in US Have Declined From C.Tiani, Invest Like a Guru, Wiley
Investors Should not Anticipate Past Returns Annual returns of Wilshire 5000 Full Cap prices have declined. The US stock market valuations are now in an overall down cycle. Future market valuations do not look promising.
Added Political Risks to Recession Prospects Rapid rise in US debt. Petro dollars now shifting to gold-based China currency. Cancellation of international treaties.
