Political  Calculations

After having experience a pair of noise events in the preceding weeks, stock prices resumed following the trajectory that a forward-looking focus on the expectations associated with 2014-Q3 would place them.

At least, that much is pretty clear from our chart tracking the change in the growth rate of stock prices with respect to the expected change in the growth rate of trailing year dividends per share.

Change in the Growth Rates of Expected Future Trailing Year Dividends per Share with Daily and 20-Day Moving Average of S&P 500 Stock Prices, thru 2014-05-30

But pay attention to what that means for stock prices if investors remain focused on that particular point in the future going into summer:

Alternate Futures for the S&P 500, with Echo Effect, 31 March 2014 through 30 June 2014, Snapshot on 2014-05-30

Finally, because the stock prices of one year earlier provide the base reference points from which we project future stock prices in our model, our final chart shows the history of the S&P 500 with its major noise events during 2013:

S&P 500 Index Value, 2 January 2013 through 31 December 2013 with Annotations for Major Noise Events

Political Calculations

Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.

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