I'm too lazy for updating this blog. Now I want to give it a new try. The forecast of the real S&P500 in 2009 was better than everybody expected. The high of the cycle was later than indicated because of the tremendous monetary and fiscal stimulus after COVID. Since then we have seen a lot more inflation than before. So in real terms the S&P500 is not doing very well. But it is doing much better than indicated because of the Magnificent 7.
After COVID you see some problems for the market to continue rising a lot in real terms. Inflation is structurally higher than before 2020.The monetary policy is no longer as favorable as before. QE is abandoned for the time being. Labor is scarce. Globalisation has changed into deglobalisation. Government policies are less favorable for equities (tariffs, deficits too high, protection, more defense spending, climate change).
The shifting of the powers is still not in favor of Labor. Populist policies are still helping Business and fighting socialism. So profit margins are allowed to be very high.
So, profit margins especially in tech are high. AI is helping productivity. So things are better than thought in 2009.
In 2009: expectations very low, .monetary policy very easy (inflation was too low and danger of deflation) and getting more easy, profit margins rising.
In 2025 is inflation a problem, not yet a big problem, but enough to expect less monetary easing despite populism. Demographics are not favorable. Expectations are high, profit margins are not expecte to go higher. Populism can cause a Chaotic Destruction Scenario. Maybe 2028 and not 2024/2026 as expected in 2009. AI and the later top are causing a later falli nto the Chaotic Downturn Scenario.
