Goldman Sachs on Stocks

Good morning! What is working from home worth to you? According to a new study, Americans now [value that arrangement]( as much as a 7.6% pay raise. Today we’re exploring: - Goldman Sachs on stocks: The next decade might not be as rosy as the last. - Girl Scouts: Even the century-old organization isn’t immune from price rises. - Grind Set: Teens are feeling the pressure from “hustle culture”. Have feedback for us? Just hit reply - we'd love to hear from you!   It has been a very good year, and indeed a very good decade, to be invested in the US stock market. The S&P 500 Index is up 23% in the year-to-date, and it’s more than tripled in the last 10 years. But Goldman Sachs doesn’t think the next 10 will be anything nearly as good, with the firm’s chief US equity strategist, David Kostin, writing in a note out Friday: “We estimate the S&P 500 will deliver an annualized nominal total return of 3% during the next 10 years...” That’s a pretty gloomy assessment of the prospects of the American stock market, and it reflects the fact that financial journalists have had to trot out the headline “stocks hit record highs” 47 times this year — most recently [on Friday](. So, just how negative is a forecast for an annualized nominal total return of 3%? Well, if accurate, it means that the next decade will be in the bottom 10% of all stock-market periods analyzed from the last 94 years (specifically ranking at the 7th percentile, according to Goldman’s researchers). Think about all of the movies in existence, and now imagine watching one that was ranked in the bottom 7%. That’s not a fun movie. Why are the prospects for future returns so low? At the heart of the matter is the market’s valuation. Goldman’s researchers get some help from Nobel laureate Robert Shiller, who created the Cyclically-Adjusted Price-to-Earnings Ratio ([CAPE](). A simple price-to-earnings ratio compares how much one share costs with how much it earns. A share that costs $100 and earns $5 a year has a P/E of 20x. It’s a rough but simple way to compare valuations. Shiller took that simple metric and... made it more complicated (but also maybe more useful) by looking at 10 years of earnings (adjusted for inflation), rather than just one year, which helps to smooth things out and often means it captures a period of recession. Since 1940, the CAPE has averaged about 22x. So, where are we today? Plugging the latest close of the S&P 500 into a brilliant spreadsheet from Robert Shiller gives us: 40x! Put simply, [stocks are expensive](, and that typically — but not always — leads to lower future returns. Maybe this time will be different! [Read this on the web instead](   Be prepared… to pay a lot more money over the next few years if your daughter’s a keen Girl Scout. On Saturday, the Girl Scouts of the USA’s National Council gathered virtually to vote on proposed 240% membership fee price hikes, eventually settling on a two-step increase of 160% over 2 years. Although the cost of being a member will stay flat at $25 in 2025, it will rise to $45 for 2026, and then $65 the year after that, as the 112-year-old organization looks to get on top of its flagging finances, after projecting a $5.6 million loss [for 2024](. You might imagine that the ~$800 million seasonal business of selling Thin Mints and Samoas would keep the national movement firmly out of the red, especially given their rising [price points](. However, all of the cookie revenues go directly to the local councils and troops, who reportedly rely on the sweet treats to provide roughly 70% of their own [operating revenues](. The national Girl Scout organization doesn’t see any of the cookie dough and makes most of its money through membership dues, gifts and donations, and merchandise sales. Despite counting around 2 million adult and girl members, member fees and other revenues haven’t been enough to keep the operation from posting losses that run into the millions over the years. Although Girl Scouts of the USA notched almost $120 million in sales last year, various costs such as supporting local councils, developing programs, funding learning opportunities for adult members, and promoting the Girl Scout brand all weighed heavily on its bottom line, resulting in a loss of $4.4 million in FY 2023. [Read this on the web instead](   Since its inception, social media has been a hub for self-reflection, self-promotion, and, increasingly, self-improvement. Spend more than a few minutes on TikTok or Instagram, and content promoting everything from self-care mantras to beauty regimens can quickly overwhelm your feed. But one personal growth trend that’s gaining particular traction in the digital realm is “hustle culture” — or, as it's perhaps better known online, the [#grindset](. Teenage burnout Stemming from all-consuming attitudes to working, having a “grindset” effectively means subscribing to an ethos of ceaseless productivity, where always hustling harder equates to progress, in work and therefore in life. While this culture of self-initiated productivity helps some users to stay motivated, the expectation of stellar results set by this constant comparison has now become a point of stress for young people, as posts related to a [#NoDaysOff]( lifestyle continue to seep into the ~4.8 hours that the average US teen spends per day on [social media apps](. Indeed, a study from [Common Sense Media]( published earlier this month, which examined major causes of burnout among American teens aged 13-17, found that 81% of those surveyed reported experiencing pressure that made them feel bad in at least one of the 6 categories examined, with 41% feeling the pressure “very much” in one or more areas. Of these, the point that teens felt most pressured about was simply having a “game plan” — 56% said they were at least somewhat stressed about having their future figured out (including college and career choices). The same report found that more than one-quarter of teens (27%) reported actively struggling with burnout, with a majority of teens finding that social media at least sometimes worsened every single pressure they felt. Still, a significant proportion of teens surveyed said they found social media to at least sometimes decrease each of these pressures (38% to 51%, depending on the pressure)… so, for every stress-inducing [#RiseandGrind]( post, let’s hope there’s an equal and opposite stress-relieving [cat video]( to help keep some sort of balance. [Read this on the web instead](   More Data - A P(arent) B(aby) & J(ob) sandwich: at least 11 million Americans are now part of the [“sandwich generation”](, who share the double load of caring for their children and at least one adult, often their parents. - [SpaceX]( won all nine military launch contracts offered by Space Systems Command, worth $733 million, outbidding Boeing-backed launch service provider United Launch Alliance. - [Gold]( prices surpassed $2,700 an ounce for the first time on Friday, as concerns regarding the Middle East and uncertainty around the US election has seen investors flock to safe-haven assets. - Possibilities in potatoes: After activist investors Jana Partners built its stake in french fries giant [Lamb Weston]( last Friday, its share price jumped 10%... maybe helped by a [viral video]( of Trump scooping fries at a McDonald’s.   Hi-Viz - As Vice President Kamala Harris just turned 60, Axios is [charting the ages of US presidents]( at their first inauguration. - Why are the Dark Ages called the Dark Ages? You can literally see it in this visualization of [objects hanging in The Louvre](. Off the charts: Which country in the Eastern Hemisphere has the lowest birth rate in the world? [Answer below.] [Answer here.](   Thanks for stopping by! Have some [feedback](mailto:daily@chartr.co?subject=Feedback&body=Hi, I like the newsletters, but I had a thought for you...) or want to [sponsor this newsletter](mailto:advertising@sherwoodmedia.com?subject=I’m interested in advertising with Sherwood Media)?   Not a subscriber? Sign up for free below. [Subscribe](   [X]( [Instagram]( [Chartr Logo]( Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... 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