Over the years, I have debated Wharton (University of Pennsylvania) Professor Jeremy Siegel numerous times. He is a very nice fellow who wrote the widely read book Stocks for the Long Run (aka SFTLR).
If I were to take the other side of the SFTLR argument, I would focus on 3 things:
My main critiques are:
1) Buy & Hold delivers inferior returns. Even worse, most Humans have a hard time sticking to it.
2) A simple system of either Valuation — think Shiller’s 10 Year Cyclically adjusted P/E — or Tactical application of Moving Average — Mebane Faber’s 10 Month moving average — significantly improves returns by reducing equity exposure and volatility as markets crash or have major corrections;
3) The current Fed driven markets (indeed, from 1981-2011) is an aberration that STFLR does not (and indeed, can not) anticipate. To quote either Jan L. A. van de Snepscheut or Yogi Berra: “In theory, there is no difference between theory and practice. But, in practice, there is.”
Regardless of my views, I want to crowd-source the arguments pro and con for SFTLR — What does Siegel get right, what does he get wrong? What is the weakest and strongest parts of his viewpoints?
Bonds for the Long Run (August 9th, 2012)
140 years of Equity Yield vs US Bond Yield (September 4th, 2012)
Bonds Beat Stocks: 1981-2011 (October 31st, 2011)
Revisiting Stocks For The Long Run (August 20th, 2012)
Jeremy Siegel is not having a good year (July 11th, 2009)
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.