S&P 4,245?

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valueplays
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“Davidson” submits:

Q3 hedge fund letters, conference, scoops etc

Just as the recent bout of excessive pessimism can have an unusual discount pricing impact, what occurs near the end of the market cycle is often excessively optimistic. Using the Investor Value Index as a guide vs the last 2 market tops, S&P 500 market cycle top potential remains roughly 50%+ premium to Value Investor Index. In Dec 2020 this would be $4,245 or well above current levels. This is not a prediction, but a guess based on excess market pricing in 2000(over 100%) and 2007(~65%) which could occur with an optimistic surge in market psychology that results in many investors chasing prices characteristic of speculative tops.

S&P 500 market cycle

A market top has always followed the T-Bill/10yr Treas rate spread falling below 0.2%. Today we are 0.4%, but may see some widening with changes to Dodd Frank regulation of smaller bank mtg lending.

I spoke about this potential several years ago. It is not a firm prediction because, as experience has shown, predicting market prices dependent on market psychology is impossible. Take this with a large dose of salt as unknown future events will influence market prices unpredictably.

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis.His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.