Miller Value, Bill Miller’s outfit, is out with a new newsletter. The theme is, based on historical precedent, that there is no prior scenario in which the forward returns are negative over the next five years (given the drawdown to date).
They argue that near term forward returns may be painfully negative, but the mid / long term returns tend to be good. That said, that is on freshly invested capital. Here’s what it takes to get “even”:
It’ll take some time for markets to decide whether it has priced in the right amount of earnings degradation / multiple derating (due to interest rates), as earnings haven’t yet started their march down en-masse:
