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Debating Jeremy Siegel & Stocks for the Long Run
Posted By Barry Ritholtz On September 30, 2012 @ 4:00 pm In Investing,Philosophy | Comments Disabled
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?
What say ye? 
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)
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2012/09/debating-jeremy-siegel-stocks-for-the-long-run/
URLs in this post:
 Stocks for the Long Run: http://www.amazon.com/exec/obidos/ASIN/0071494707/thebigpictu09-20
 WSJ: http://online.wsj.com/article/SB124725925791924871.html
 Birinyi Associates: http://tickersense.typepad.com/ticker_sense/2009/10/what-do-stocks-really-return.html
 What say ye?: http://www.ritholtz.com/blog/2012/09/debating-jeremy-siegel-stocks-for-the-long-run/#comments
 Bonds for the Long Run: http://www.ritholtz.com/blog/2012/08/bonds-for-the-long-run-2/
 140 years of Equity Yield vs US Bond Yield: http://www.ritholtz.com/blog/2012/09/140-years-of-equity-yield-vs-us-bond-yield/
 Bonds Beat Stocks: 1981-2011: http://www.ritholtz.com/blog/2011/10/bonds-beat-stocks-1981-2011/
 Revisiting Stocks For The Long Run: http://www.ritholtz.com/blog/2012/08/revisiting-stocks-for-the-long-run/
 Jeremy Siegel is not having a good year: http://www.ritholtz.com/blog/2009/07/jeremy-siegel-is-not-having-a-good-year/
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