Prudent Bear Fund (BEARX): contrarian investing Message Board

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Pastimes : Prudent Bear Fund (BEARX): contrarian investing

BEARX 4.100

-1.0%

Nov 26 4:00 PM EST

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To: Tommaso who wrote (385)	10/9/1998 10:22:00 AM
From: StaggerLee	Read Replies (2) of 793

>>Twice in this century the "blips" have lasted 2-4 years, and the recovery from them has taken 10-20 years. If you include dividends (as a short fund must), there has only been one ten year period this century with a negative total return on stocks (10 years ended 1938), and that decade had a 1% annual loss. (Source: Bogle on Mutual Funds, 1994). On average, stocks return about 10.5% a year. Therefore, on average, a completely diversified 100% short fund would lose 67% every 10 years, versus a 171% expected gain per decade for a long fund. Tice has done well this year (though he'd have done better by simply shorting the Russel 2000). Sometimes I win at craps, too. Unfortunately, neither BEARX or I have a profitable system, long term. The difference is that I realize it, and BEARX owners don't.

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