A Treadmill Market: Feeling Good while Going Nowhere
Notes de l’épisode
Today's Post - https://bahnsen.co/3TYkoXw
David Bahnsen explains how range-bound, volatile markets can feel productive yet deliver flat or mediocre returns over long stretches, citing the S&P 500 from 2000–2009 (about -0.9%/year with dividends) and the Dow from 1966–1981 (flat on price but roughly 4–4.5%/year with dividends). He notes periods when dividends comprise most or all of total return, but shifts to today’s math: recent S&P gains (about 15% annualized over 15 years and 22.9% over three) imply either a higher long-run average or future below-mean returns via sharp declines or prolonged choppiness. Applying this to AI, he highlights NVIDIA’s flat year despite strong fundamentals, with Palantir down 7% and CoreWeave down ~60% amid 100% revenue growth, arguing that unknowability, capital constraints, and high valuations can yield unsatisfying stock returns even if AI succeeds, and he advocates dividend growth as a way to navigate volatility and reduce left-tail risk.
00:00 Welcome and Setup
02:21 Why Flat Feels Busy
03:33 Lost Decade S&P 2000s
05:58 Sideways Seventies Dow
07:29 Dividends Matter Most
09:21 Mean Reversion Math
11:44 AI Poster Child Nvidia
13:42 Flat Stocks Despite Growth
16:21 Capital Risks and CapEx
22:24 Unknowability Meets Valuation
24:25 Dividend Growth Solution
26:12 Closing Thoughts
Links mentioned in this episode: DividendCafe.com