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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (33255)	10/2/1998 5:20:00 PM
From: Mike M2	Respond to of 132070

Skeeter,to add to your point I would like to add that the U.S. underwent a tremendous period of growth during that time period. The country grew from farms carved out of the wilderness to an industrial and military superpower. Even if the US stays on top of the world the rate of growth would IMO be extremely difficult to duplicate. Simply put the greatest growth occurs when an economy rises from an underdeveloped to a mature stage. Sure some marvelous innovations have and will come along but the US economy has matured. Mike

To: Skeeter Bug who wrote (33255)	10/2/1998 5:35:00 PM
From: Ilaine	Read Replies (2) \| Respond to of 132070

Hi, Skeet, actually, Siegel makes a very interesting point about 1929. It seems that in the summer of 1929, John J. Raskob, a senior financial executive at General Motors, gave an interview to Ladies Home Journal, called "Everybody Ought to be Rich." He claimed that if you invested $15 a month in good common stocks, you could expect your wealth to grow to $80,000 in just 20 years, based on the then 24% rate of return investors were experiencing. Seven weeks later, the stock market crashed. 34 months later, the Dow had declined 89%. In 1992, Forbes warned investors of the overvaluation of stocks at that time in an article entitled "Popular Delusions and the Madness of Crowds," and called Raskob the "worst offender" of those who touted stocks as a guaranteed way to become wealthy. Interestingly, though, if you had followed Raskob's advice, Siegel claims, after 20 years you would have $9,000 and after 30 years, you would have $60,000, which Siegel states is a 13% return on your investment, which is consistent with historical rates of return in the stock market. I have not checked these figures personally. As a caveat, I recall recently hearing, either on TV or on the radio (WMAL, local station devoted to investment talk daily), that Siegel thinks that we can expect regression to the mean, and if I recall correctly, his prognosis for the short term was very pessimistic. It may be salutary to note that when John Maynard Keynes stated, "In the long run we are all dead," it was after, and because, he lost his fortune in the 1929 crash. A cheery thought. Yours, CobaltBlue