Bashing the media and pundits
Seems like that’s all I do in my blog. Frankly, it is very easy. Their consensus is generally on the wrong side of every issue. Four years and over 250 posts on kortsessions.com would corroborate this assertion. It is kinda fun. However, there is an important subtext to my work that may by lost in the midst of the bashing. It is the case for equities … the case for profit (your profit).
Kortsessions in context
My original reason for creating kortsessions.com was to provide a counterpoint to the constant barrage of fear and misinformation given to investors by the media … a barrage that in no way would or could contribute to an investor’s success. Much of the time the media and punditry dramatize market and economic events that are really not extraordinary but normal cyclical happenings. Essentially these are events that average investors, if they had the perspective of history with which to make judgements, would deem trivial rather than scary. Unfortunately, most do not have that background. That is why kortsessions exists. I try to provide context (50+years of investing experience), history and facts concerning those life and financial death issues that the media presents daily. My main message is “Chill, we have seen this before.” Despite the media’s propensity to set its hair on fire over every passing crisis, we’ve seen most of this before and survived. Those who have kept their cool have prospered holding common stocks or their equivalents. What I present below, the work product of professor Jeremy Seigel of the Wharton School, is very strong evidence to support my assertions.
“The superiority of stocks to fixed-income investments over the long run is indisputable. Over the past 200 years the compound annual real return on stocks is nearly seven percent in the U.S., and has displayed a remarkable constancy over time. Furthermore, real stock returns in other major countries have matched those in the U.S.” (J. Siegel)
What one dollar invested in 1802 would have been worth in 2012:
(total real returns — adjusted for inflation)
- $704,999 if invested in common stocks
- $1,778 if invested in bonds
- $281 if invested in t-bills
- $4.52 if invested in gold
- $0.05 if left under the mattress
These are facts, not fake news!
And, these basic truths are seldom cited by the media in the day-to-day coverage of the financial markets. It is always about the short-term and it is always about fear of losing money, potential disasters at every turn. I feel compelled to write as a balance to the constant negative flow with the positive message encompassed in Seigel’s work. For the most part the news backdrop has always been negative (something the media exploits to hold your attention). Yet, stocks did just fine.
Of course, we all should remember, the results of the 210-year period referenced herein are no guarantee of future performance. It is, however, hard to imagine bonds doing better than stocks going forward with the US Treasury 10-year note yielding a meager 2.5%.
Here lies the reason that you may profit from the fun I’m having researching and writing my semi-regular postings.
What’s your take?
The information presented in kortsessions.com represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain securities for illustrative purpose, names where I personally hold positions. These are not meant to be construed as recommendations to BUY or SELL. All investments and strategies should be undertaken only after careful consideration of suitability based on the risks, tolerance for risk and personal financial situation.