I can't decide whether you're intentionally skewing the numbers you cite, or just thoughlessly regurgitating them after hearing them somewhere. My guess is the later. The most interesting thing about this comment is that you choose to start your measurement in 1933. At the bottom of the worst bear market in US stock market history. (more on this later).
1) Stocks have been favored all the way back to 1933 brother...even in a flat market, with dividends being a much higher part of the return, investors earned just under 6% annually between 1933 and 1955.
My point is that when most have "given up" on equities is the best time to buy. Early 80's for example. We are so far from that extreme it's scary. 62% equity allocation (AAII survey I quoted earlier) is so far from that point, yet you were making comments about "so much cash and bonds on the sidelines". I'm just correcting your misstatements with facts, BROTHER.
2) "People" or experts give up on stocks all the time brother...for short periods. Equities were DEAD in 1978...yeah, how did that work out? 1987 we were being punished for the ME decade. Stocks bounced back. 1992, 1996, 2002, 2008...all bad, and people were saying to stay out of stocks that a new dawn had arrived. Ha! I made 43% in 2003, 34.7% in 2009, and so far 15.1% in 2010 as of this morning, not counting the upward move so far today.
Again, for anyone keeping track, notice that Flagpole cites big gains in years like 2003, 2009, and 2010 but fails to put those years in perspective by including the huge loss years that led to those gains.
Finally, you mention the "Stocks are dead in 1978". You know what led to that, right? Just 10 years of no gains with crazy-high inflation. So in real terms people in stocks were losing their asses. Warren Buffett, whom you seem to admire had returned much of his investors' money BEFORE that 10-year period hit. So, no, stocks aren't ALWAYS favored, BROTHER.
You missed my point again. You said house prices rose for 5 months, with a temporary pullback was good news and evidence that the DJIA should be near 12000. I'm saying that what you call a "pullback" might very well be a resumption of the downward trend. As Munger says: "Invert, always invert."
3) Regarding housing prices, I've said for years that I don't care one way or the other about them...it's a place to live, and if your house drops in price then so do all the others. BUT, economists use housing prices as an indicator of the health of the economy, so that is why I mentioned it. For some reason homeowners (not me though) feel better when their home increases in value even though all the others do too...makes them spend money...some take loans out against the value (stupid). Stupidity doesn't change the fact that economists view rising prices as a good thing.
And I encouraged you to add a disclaimer to any foolish fun statements you make like DJIA 12000 so those easily influenced know you're just having fun.
4) I said watching short-term moves in the market was fun, and it is.
No, the "B.S." comments I was referencing were those in this thread & "DJIA 12000". You know, the ones I quoted. But nice try.
5) My statements are 'dangerous'? Are you serious? My statements are ALWAYS a) have an emergency fund of 3-6 months of exenses; b) have no debt except for a mortgage that is no more than 25% of your take home pay; c) invest 15% of your salary into growth stock mutual funds split this way evenly...Growth, Growth and income, Aggressive Growth, and International; add more bonds to your portfolio as you get closer to retirement, and don't retire until you are completely debt free, house and everything. Ha! And THAT'S what you call "dangerous" advice? BS brother.
Most of the above is solid advice. You should stick to that, and lay off trying to justify why the market is "not relecting reality"... because that is "B.S.", BROTHER.
However, even Susie-Orman-inspired advice like that can be dangerous if people don't put a little thought into their actions.
One example, people approaching retirement now should be very careful adding more bonds to their portfolio. Sometime in the next 15 years, bonds are going to get KILLED. We've had a 28-year bond bull market. When that reverses your cookie-cutter advice could decimate that part of their portfolio. You like Buffett right? Well, Buffett said so.
Anyway, hopefully the DJIA his 12,000, and then we'll get to hear how you were right, how you knew all along that 12,000 is a FAIR relection of the economy (how do you arrive at the NUMBER anyway?? Oh, nevermind, it was just fun), yadda yadda yadda.
All the best.