A historic study of financial markets 1920 till present demonstrates.

i) Stocks whose price is predominantly driven by their Cash Cow value has produced lower future returns than stocks whose price is predominantly driven by their NPVGO value

ii) Although in very short-term stock returns can be negative, there has never been a 20Year. Where their returns have been negative after accounting for fees, taxes, and inflation.

iii) High Shiller PE ratios Today have historically been associated with above-average future stock Market returns over a 10-year period.

iiv) Using a normal distribution to describe potential stock market outcomes overestimates the probability of stock market crashes (a 10% in a day)

What is the correct answer?

a) i

b) ii, iii

c) iii, iv

d) None of the above