In this weekend’s WSJ, Jason Zweig reminds his readers of James K Glassman’s 1999 best seller, Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market (which, by the way can apparently be had at Amazon for a mere one penny!). Jason mentions that in his new book (which I won’t bother to reference), he admits that he “was wrong.”
Recall that Glassman picked up on the hot bull market of that time and made this bold, and apparently rather unrealistic, prediction for the future of the DJIA. Glassman and his coauthor, Kevin A. Hassett felt that “stocks and bonds are equally risky over long horizons,” because “stocks had never lost money over the long term.” Zweig further points out that investors back then had apparently learned that “socks weren’t risky.”
Zweig cites LA-based Oaktree Capital Management’s chairman, Howard Marks, who said that this logic is false. Zweig also alerted us of a new “superb forthcoming book” by Marks that “helps explain risk clearly”: The Most Important Thing. The book is due out May 1, and I preordered my copy today.
Rather than repeat here any further commentary from Jason, I will leave it to the reader to link across. Some insightful points are raised which are worth having a look at.