Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“On the other hand, the data also reveals that in the ultra long term (e.g., 20+ years), market valuation actually becomes less predictive of equity returns. In other words, while market valuation is predictive for long(er) term market returns, eventually so much time has passed – and so much has changed – that the starting valuation is just no longer predictive of how markets grow and compound 20-30 years later. In fact, valuation is even less predictive of 30-year returns than it is in predicting 12-month returns!”
John Walter Russell posted research showing that at the Safe Withdrawal Rate Research Group about 10 years ago, Laugh.
I have copies of every thread that appeared at that board.
They all will be coming out when the entire internet is opened to honest posting on the peer-reviewed research of the past 34 years.
This is exactly what you would expect to see if Shiller is right and Bogle is wrong. These sorts of results are logical impossibilities in a world where the market is efficient. The only way we could have such results is if it is investor emotion that determines stock prices, as Shiller proved in his “revolutionary” (his word) research of 1981. This makes perfect sense if it is investor emotion that determines stock prices. Prices go up for roughly 20 years running because investors like how it feels to vote themselves raises. Then prices get so insanely high that investors freak out and send prices to levels as insanely low as they once were insanely high.
That’s how it works. That’s how it has always worked. For 145 years. No exceptions. Not one.
If you Goons hadn’t committed multiple felonies, we would not be in an economic crisis today. You are personally responsible for destroying the financial futures of millions of middle-class Americans.
Those are the people who will be serving on your jury.
We’ll find out together how it all plays out following the next price crash.
My best and warmest wishes to you and yours.
Set forth below is the text of a follow-up post:
There are Post Archives.