Jul

9

 CNBC should be acquired by the Teleshopping Network. It would be more entertaining and honest if while the pitchman touted the product, they put up a Quantity Sold and an interview countdown: "We have sold 500k shares of AAPL. Only 20 seconds left of this fund manager spewing away, so get yours now while they are hot! And don't forget if you place the trade with our sponsor, we will send you a CNBC trading calendar!" That being said I must disagree with Vic's conclusion. "You" cannot get 6% on stock unless you own the control packet. "You" own whatever the market values that baseball card at, and if you don't own the 6% then the 10% growing in profits is meaningless. The enterprise will do just fine, without the public providers of capital. After the South Sea bubble they banned publicly traded stock in England for decades, and England continued to grow without it.

I read a few times over the empirical facts that Tom Downing, Laurel, and Vic reported in their columns and it's a fantastic work with a single caveat. They're based on the past. And "past performance is not indicative of future results". But 100 years of data must mean something, right? Maybe, if the underlying factors prevail, which might not be the case. Dividend yields three-times higher for the better part of the period, short supply of stock world wide combined with favorable demographics provided the 10% drift which is not sure to be replicated in the next 100 years, with or without innovation, entrepreneurship and human spirit.

You can't expect to win if you don't bring anything to the table anymore (buy and hold). One need only look at other fields (i.e sports, business) to notice the niches are getting narrower by the day and performance more difficult to achieve.


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