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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (28755)	3/2/1999 11:21:00 PM
From: Robert O	Respond to of 70976

Let me choose the time period and I'll show you any result you want to see ;-) Specifically though, I took issue with your bizarre statement that for 30+ years stocks in real terms have just broke even. This is simply false. In addition, you say: "But do not elude yourself into thinking that stocks will outperform anything in the "long run". What do you suggest, then, is the best long term investment?? RO p.s. I've already directed you to the CRSP site which contains historical stock prices . It's well-settled that this data is VERIFIBALLY REAL. Please crunch it and get back to us. I have a nagging suspicion that "The Great Wave" is not generally known in academic circles. Let's give the board back to AMAT and history.

To: Sun Tzu who wrote (28755)	3/2/1999 11:22:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 70976

Sun Tzu - But those same litterature do not tell you that during the '70s with inflation in double digits and DJIA staying flat, in real terms you lost more than 3/4 of your assets. If you take the numbers for 1966 to 1982, then the loss is closer to 80+%. Sure and of course, but that is hardly representative of the last two centuries. Increasing inflation has a double whammy effect on stock investments. It means a dollar buys less, but increasing inflation implies increasing interest rates which implies decreasing P/E. Thus the stock markets will stay flat during a long term secular increase in inflation rate. But if you pick a period longer than about 25 years (long enough to average out inflation effects and macro economic effects) any time in the last 2 centuries you will find that there was no equal (much less better) investment over the same period. There is a chart of DJIA in real terms about 3/4 of the way into the book. Be vawy vawy careful. The DJIA adjusted for inflation and plotted over time is not a good measure since it leaves out dividends. Clark