The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
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A Lucky Walk

One of my longest-running “thought-heroes” is the brilliant and affable Dr. Jeremy Siegel of Wharton.  By happenstance, I walked with him from our hotel into the conference center for his presentation yesterday morning.  It was the highlight of the conference for me!

He fairly described himself as the “token bull” in a conference dominated by bears, but he has also been described a “perma-bull” because he is almost always optimistic.  Fortunately, the economic history of the United States seems to justify such long-term optimism.  He just follows the facts, as he sees them.

His speech followed his latest book, Stocks For The Long Run.  Unquestionably, stocks have out-performed bonds and cash over most time periods – by large margins.  Rational investors should therefore over-invest in stocks and under-invest in bonds and cash.  His sound economic arguments strongly support the traditional “buy-and-hold” approach of Warren Buffet.  But, Dr. Siegel’s “blind-spot” is behaviorial finance, which are the emotional gyrations investors need help managing, both going-up and going-down.

He made no particular predictions yesterday, probably because the bears would have laughed him out of the lecture hall.  But, he didn’t need to . . . we already know he thinks capitalism is a blessing . . . in the long run!