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To: Sam who wrote (5767)	3/3/1999 10:24:00 PM
From: Frodo Baxter	Read Replies (1) \| Respond to of 9256

Without bothering to actually look at and analyze the data to settle this probably trivial point, it seems as though he simply looked at the S&P index level, neglecting to count and re-invest dividends. Do note that for much of our history, stocks yielded significantly more than Treasuries, because of the risk involved in owning equity. Oh how times have changed! As Mark Twain said, "There's lies, damned lies, and those who cry havoc at the sight of dogs."

To: Sam who wrote (5767)	3/4/1999 10:08:00 AM
From: Robert Douglas	Read Replies (1) \| Respond to of 9256

Sorry to carry this T-Bill discussion into a second day, but I spoke with my 81 year old expert on matters financial. He tells an interesting story. Here is something (He always qualifies things with the possibility that his memory may be faulty) that I found very interesting. There was a period that lasted about 13 years from 1933 to 1946 where T-Bills yielded about 3/8 of one percent. Furthermore, there were three years, 1938, 39, 40, where the return (this is NOT inflation adjusted) was zero, and in fact in 1938 the yield was slightly negative! My expert says that during this period the T-Bills contained a call option to buy a highly coveted long-term government that was yielding a mouth-watering 2-3%! People would buy the bills in order to gain the call on the bonds. Perhaps I should post this on the Asian thread so that what is going on in Japan with their low interest rates may not seem quite so peculiar. Sam, one more tidbit: From 1931 to 1987 the inflation adjusted return of the U.S. Treasury Bill was an annualized compounded 0.0%. This of course does not consider that you pay taxes on nominal returns, making your real after-tax return for this 56 year period negative. The bull market in stocks is starting to make more sense isn't it? -Robert