Stocks for the Long Run 5/E: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies Author: Visit Amazon's Jeremy J. Siegel Page | Language: English | ISBN:
0071800514 | Format: PDF
Stocks for the Long Run 5/E: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies Description
Review
"[A] heavily researched book that cites historic and contemporary sources to support [its] thesis, but it is accessible to the average person." (
Chicago Tribune 2014-01-09)
About the Author
Jeremy J. Siegel is a professor of finance at the Wharton School of the University of Pennsylvania. Professor Siegel received his Ph.D. from M.I.T. and taught for four years at the University of Chicago before joining the Wharton faculty in 1976. He has written and lectured extensively about the economy and financial markets, monetary policy and interest rates, and stock and bond returns. Along with heading the macroeconomics module of the Morgan Bank Finance Program in New York, he is the academic director of the U.S. Securities Industry Institute and is on the Advisory Board of the Asian Securities Industry Association. Professor Siegel is courted by nearly every Wall Street firm as a consultant and lecturer and has appeared on CNBC, PBS, Wall Street Week, and NPR.
- Hardcover: 448 pages
- Publisher: McGraw-Hill; 5 edition (December 17, 2013)
- Language: English
- ISBN-10: 0071800514
- ISBN-13: 978-0071800518
- Product Dimensions: 9.5 x 7.7 x 1.5 inches
- Shipping Weight: 1.8 pounds (View shipping rates and policies)
The basic theme throughout is simply that stock returns (in all developed nations, though at differing slopes, pp. 88-90) regress to a mean, as bonds, and all other investment alternatives, do not. That’s one point. By taking the long historical view (from the dawn of the American republic), Siegel also demonstrates (Chapter 6, pp. 93-103) that in this country over periods of five years and longer, real stock returns (after inflation) stray from our mean return (6.5%) less and less, until at thirty years the observed deviations are half what standard statistics expect. So stocks are both much more volatile short-term—cf. Mandelbrot and Hudson, The (mis)Behavior of Markets—and much less volatile long-term, than Modern Portfolio Theory says they should be. That’s point #2. And, his third crucial point, value strategies (Chapter 12, pp. 173-193, on low-P/E, high-dividend stocks) consistently surpass the market indices by 2% or more in annual compounded returns. I know of no other book which has made any one of these three points so clearly and demonstrated them so forcefully with historical data and mathematical analysis. Ben Graham, to be sure, made the case for value investing decades ago, and does a better job of understanding and presenting the process than anyone else before or since, but of course he couldn’t come close to the range and depth of modern databases and computing power to undergird his argument. Siegel has written the one book since Graham’s Intelligent Investor that everyone should read and re-read before presuming to buy any security other than an index fund.
So, for instance, I needed to know that stocks have never failed to offer a positive real return over any period of seventeen years or more.
Jeremy Siegel’s Stocks for the Long Run, here in its fifth edition, has long been considered as required reading for stock investors of all ilk. It is a book that is referred to steadily by the financial press and fellow financial authors when looking to explain some of the finer points of efficient and safe investing. As such, it has more than earned its place in the world of investing tomes. But Mr. Siegel does not rest on his laurels. Ever the scholar and purveyor of insight and knowledge, Mr. Siegel takes his considerable acumen and gobs of statistics and graphs and applies them to modern markets, bringing them to bear on the real estate implosion, the 2008 depression, the post-depression recovery, and the Fed’s tight money policy and qualitative easing. Everything that the press and TV financial gurus have worked so hard to obfuscate over the last six years suddenly becomes lucid and, if not sensible, at least explainable.
I enjoyed this book quite a lot, because although I am familiar with some of Mr. Siegel’s writing in various financial publications, this is my first time to read this book. I liked the fact that it reinforced my own long term investing viewpoints, and did so with clear examples, easy to understand graphs and tables, and an overall “no nonsense” tone that keeps the book light but “sturdy”. Mr. Siegel’s strength lies mainly in the fact that he doesn't tell potential investors what they should do. Instead, he tells you what to expect when it comes to what markets, individual stocks, and particular sectors might do, how to recognize what they are doing, and what you might want to consider doing to take advantage of that.
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