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To: Les H who wrote (704)	9/23/2001 6:02:35 PM
From: Wyätt Gwyön	Respond to of 29596

indexfunds.com But Jeremy Siegel's famous data series is an object lesson in survivorship bias. In the early years--nearly a third of his total period--Prof. Siegel links together the returns on a maximum of 27 stocks, every one of them either a bank, an insurance company, or a railroad, all traded either on the New York, Boston, or Philadelphia exchanges. In 1810, among the biggest stock issuers in the country were turnpikes; in the 1820s, canals; in the 1830s, small-town banks; in the 1850s, coal mines; in the 1860s, petroleum. By 1865, the over-the-counter markets in mining stocks in New York alone were capitalized at $800 million--$10 billion in today's money. Nearly every penny of it went down the drain, and not one penny of that loss is reflected in Prof. Siegel's data. We don't know, we simply can't know, the compound return on U.S. stocks in the 19th century. To say that stocks have never lost money over a 30-year period means almost nothing. If good data don't begin until the 20th century, then we have a grand total of three non-overlapping 30-year periods to base that judgment on. So far, stocks are batting 3-for-3--to which an objective observer can only say, Whoopie pickle. Any grand conclusion from that sample is a giant gamble on fragmentary evidence.