Tuesday, March 01, 2011

Follow up on Glassman's new book

As I said, I haven't read it, nor have I any intention of doing so, but apparently, it is something of an apologia for his monumentally bad call in 1999.

What I find amazing is that in spite of acknowledging lower growth going forward (according to the review), Glassman fails to believe that thtis will manifest itself in lower earnings growth and lower stock returns.

I always wonder about the conflicts between the authors of investment newsletters and their readers. I mean, who pays for the advertising in personal finance magazines? Asset managers. Asset managers have a vested interest in explaining why you should invest NOW. There is always a reason - usually it is compound interest and the argument that you can't time the market. So "no time like the present". But this means that real deep analysis, partiuclarly bearish analysis, must be frowned upon, since the last thing an asset manager wants is big redemptions.

Thus, projections about the future are generally rosy, so long as you "invest for the long term" and park your cash with that expensive manager.

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