Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: energyplay who wrote (28841)	2/18/2003 1:00:49 AM
From: bwtidal	Read Replies (2) of 74559

the biggest, longest bull market in US stock market history began in August 1982... if we start in Octoer of 1981, we only take the compounded return (to present) down from about 13.8% to 13.2%... same thing, modifying the start date for the bonds during the last ~ 20 years doesn't change Shilling's contention much... love it, the defending argument for stock "superiority" is now "start measuring from the 1987 bottom to the 2000 top, THEN you'll see what we mean..." The shocking thing is how bankrupt the "Stocks for the Long Run" thesis is... (The overwhelming advantage for bonds in Shilling's example comes from the nuance that he keeps the duration of the bonds at 25 years by trading them each year and extending the maturity back to 25, but that is not a bad comparison... the stock portfolio has no maturity and a comparable if not longer duration... Shilling is not contending that the next 20 years repeat, but stocks are starting from an awful valuation point...)

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