Robert Shiller and John Campbell initially published on P/E Ratio predicting later real returns in this 1988 paper. In 1996 Shiller followed up the research with this easily digestible paper on the topic. In summary he found that the random walk theory does not look right and that current valuations have a strong predictive ability for future long term returns. Over the short term noise prevents prediction, whereas over the long term, ten years, current valuation levels are predictive of future returns.

As I have said before the voting machine should be used for the short term, the weighing machine for the long term.

This excellent article exemplifies a style of fusion investing, the fusion of business momentum and value.

Three great points; another reason to concentrate on EV instead of market cap, cash is more a risk than an asset and show us the money. Stop hording our cash! Graham recommending putting the dividend payout to a vote each year and management having to justify any capital expenditures. I implemented capital investment management in, gosh at least a dozen companies, and truth be told not one really had a tight grasp of or even a good process for managing their major expenditures.