Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (2479)	11/20/2003 4:21:58 PM
From: russwinter	Read Replies (2) \| Respond to of 110194

Another intriguing SandSpring pattern chart: sandspring.com

To: mishedlo who wrote (2479)	11/21/2003 9:47:43 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

In my view, such optimism, if you can call 7.7% long-term returns optimism it is a mark of the times that if Hussman were to go on the air and say 7.7% is the long-term best possibility, he would be laughed off the stage as a kook. but he's totally right. 7.7% is UNBELIEVABLY optimistic. even Buffett's 6% is WAY TOO optimistic (i'm sure Buffett knows this). real returns will probably be less than 2%, imo. when one considers the need for an equity risk premium of, say, 300 bp, on top of the 10yr 4.15%, then in order to achieve the 7.15% target return, the current 2% ex ante level would need to fall by more than half. even this is a terribly optimistic scenario, imo, considering that the industrialized world will only last at best another 30 years or so before oil scarcity ruins the global industrialized economy at least semi-permanently, imo. as i see it, the worst-case scenario is some kind of terrorist disaster (e.g., nuking of a metro area) which plunges the world into chaos at any time. the most optimistic scenario imo is 30 years of muddle-through before utter collapse. in light of this perspective, it strikes me that the risk premium on US equities is, in the aggregate, rather low.