Numbers storytelling InvestorsInsight : John Mauldin's Outside the Box > Archives:
"In the previous table, we show in greater detail the relationship between valuations and future long-term real returns based on estimates from our regression work. If, for example, the stock market was trading at a normalized P/E of 15, then a best guess for real returns would be 2.5% per annum over the next decade. In actual fact, the S&P 500 is trading at a normalized P/E ratio of 35. Based on this model, stocks are estimated to decline by 3.6% per annum in real terms. Grossing this result up by adding in some inflation (say 2%) and a dividend yield (say 2%), we arrive at 0.4% total returns per annum for the next decade... uninspiring prospects, to say the least."

In Unrelated news:

US trade deficit increases to record high in first quarter 2005 - Wikinews:

The US trade deficit has increased to its highest-ever level, $195.1bn in the first quarter of 2005,... The last quarter of 2004 saw a deficit of $188.4bn. The new record-breaking deficit represents 6.4% of the US's gross national product, again an increase on last-quarter 2004 - up 0.1%.  ¶ 3:48 AM