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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (40525)	3/17/2001 11:00:25 AM
From: chmang	Read Replies (1) \| Respond to of 54805

Mike, Thank you for taking the time to do this detailed response. I did'nt mean to ask any personal questions about your wealth or your private life. But my poor english can be misleading sometimes. I'm just curious to know what are the yield hypotheses on which people base their decisions to say one day : I quit. I've seen in a Morgan stanley study done on 2 currencies US$ and D-Mark that over a period of 50 years the yield of state bonds (after inflation ) is something between 2.5 and 3% . This is coherent with the fact that TIPS ( inflation adjusted bonds) yields in US and in Europe are around 3%. Economists use to say that the risk premium of blue chip stocks over bonds is historically 1.5 - 2 %. Let's assume to be conservative that G&K will outperform bonds by 2% over the next 40 years. If I am 50% in bonds and 50% in G&K , I will have a yield of 3.5 to 4% after inflation. That's how I get the 25 number. Am I too conservative? all your comments will be appreciated Charles