Word: dimson
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...wooden turnpikes--just a couple of dozen profitable banks, insurers and railroads. Imagine calculating recent stock returns without Enron, Pets.com and Global Crossing. Would that give an accurate picture? Siegel says in his defense that survivor bias may overstate his 19th century numbers by "1 or 2 points." But Dimson, speaking for his research team, concludes that survivor bias is "highly significant" in the early U.S. data. Even among British stocks from 1919 to 1954, he found, the winners-only problem exaggerated returns by 2 percentage points a year...
...bull market has been butchered, and now a brilliant new book, Triumph of the Optimists (Princeton), by Elroy Dimson, Paul Marsh and Mike Staunton of London Business School, casts doubt on Siegel's research...
...Dimson's team has created the first full, global picture of how equities performed over the past century. Among the 16 nations the team studied, stocks beat bonds and cash by an average of 4 to 6 points a year. From this, the scholars draw a startling conclusion: putting all your money in stocks is a bad idea. Why? First, most previous research showed stocks beating bonds and cash by a much wider 6 1/2 to 8 1/2 points a year. Second, a big chunk of the rise in stock returns came from the democratization of investing, starting...
...adds, it's "irresponsible" to conclude that "the more profitable that stock investing has been in the past, the more profitable it must be in the future." Instead Dimson expects U.S. stocks to return a tepid 6% annually (after inflation, which is running at about 1%). That would be far below the 18% a year that stock investors reaped from 1990 through 1999. It's also fewer than 3 points above the returns on the safest bonds--not much of a reward for the added risk posed by stocks. So, says Dimson, investors may want about 40% of their assets...
...first one-on-one opportunity of the game between the two, Feaster easily evaded Dimson to grab an entry pass from senior Alison Seanor. Her lay-up gave the Crimson a 7-3 lead...