Jeremy Siegel is embarrassing himself. His advice is a disservice, and may he stay in an east coast private school educating the children of Wall Street. I’d say he is dumb enough.

I think I’m with you. Anyone willing to share these deep thoughts with others gets my support.

past that, though, dps’ Cliffs’ Notes suffice, tremendously, well..

“Peter Bernstein (who at 89 is still one of the most insightful and important analysts in the world) wrote a very insightful essay in the Financial Times called “The Flight of the Long Run.” Let me quote a few selected paragraphs:

“The cold statistics have hardly been encouraging for the traditional [buy and hold] view. On a total return basis, the Ibbotson data show that the S&P 500 has underperformed long-term Treasury bonds for the last five-year, 10-year, and 25-year periods, and by substantial amounts.

“These data are not to be taken lightly. If the long-run expected return on bonds in the future were higher than the expected return on equities, the capitalist system would grind to a halt, because the reward system would be completely out of whack with the risks involved. After all, from the end of 1949 to the end of 2000, the S&P 500 provided a total annual return of 13.1 per cent, while long Treasuries could
grind out only 5.8 per cent a year.

“But does this history really tell us anything about what lies ahead? Neither the awesome historical track record of equities nor the theoretical case is a promise of a realized equity risk premium. John Maynard Keynes, in an immortal observation about the future, expressed the matter in simple but obvious terms: “We simply do not know.”

“Relying on the long run for investment decisions is essentially relying on trend lines. But how certain can we be that trends are destiny? Trends bend. Trends break. Today, in fact, we have no idea where any trend lines might begin or end, or even whether any trend lines still exist. (Emphasis mine)

“… There is an even deeper reason to reject
the long run as a guide to future investment policy. The long-run results we
can discern in the data of stock market history are not a random set of
numbers: each
event was the result of a preceding event rather than an independent
observation. This is a statement of the highest importance. Any
starting conditions we select in the historical data cannot replicate the
starting conditions at any other moment because the preceding events in the two
cases are never identical. There is no predestined rate of return. There is
only an expected return that may not be realized.”

1) Anyone can cherry pick the data and present it any way they want to prove their “point”.
2) I can cherry pick data and mine is probably right – especially the stuff I just heard from John Boehner.
3) Listen to my debate with a couple real losers from the old dot com bust, that’ll show you how smart I am.
4) If you like what I said or the way I quote others, buy my newsletter (almost %50 off if you act today!).