The fifth edition of Stocks for the Long Run is more
thoroughly rewritten than any of the previous editions. Because of the
severe impact of the 2008-09 financial crisis, I felt that what transpired
over the last several years had to be addressed front and center. As a
result I added two chapters that described the causes and consequences of
the financial meltdown. Chapter 1 now previews the major conclusions of my
research on stocks and bonds, traces how investors, money managers, and
academics regarded stocks over the past century, and describes the events
that led up to the financial crisis.
Chapter 2 describes the financial crisis, laying blame where blame is due
on the CEOs of the giant investment banks, the regulators, and Congress.
Chapter 3 analyzes the extraordinary impact of the financial crisis on the
financial markets: the unprecedented surge of the “libor spread” that
measured cost of capital to the banks, the collapse of stock prices that
wiped out two-thirds of their value, and changed the correlation
coefficient between asset classes.
Chapter 4 addresses longer-run issues impacting our economic well-being.
This chapter updates and extends the results of earlier editions by using
new data provided by the UN Population Commission and productivity
forecasts provided by the World Bank and the IMF. I now calculate the
distribution of world output of the major countries and regions of the
world to the end of the 21st century and analyze the role that the emerging
market may play in mitigating our entitlement crisis.
Not only have all the charts and tables been updated through 2012, but the
chapter on the valuation of equities has been expanded to analyze such
important new forecasting models such as the Shiller CAPE ratio and the
significance of profit margins as a determinant of future equity returns.
The chapter on stock volatility analyzes the “Flash Crash” of May 2010 and
another chapter addresses whether the well-known calendar anomalies, such
as the “January Effect, the “Small stock Effect” and the “September
Effect,” have survived over the last two decades since they were described
in the first edition of this book published in 1994.
I also include for the first time a description and “liquidity investing,”
and explain how it might supplement the “size” and “value” effects that
have been found by researchers to be important determinants of individual
stocks’ return. In short, the fifth edition integrates all the significant
events of the last decade into the long history of US and world equity
Congratulations! Future for Investors has been
recognized for being one of the top 10 business books of 2005 in
Barrons,Financial Times, and Businees Week.
The Future for Investors The new paradigm for investing and building
wealth in the 21st century. The Future for Investors reveals new
strategies that take advantage of the dramatic changes and opportunities
that will appear in world markets.
Jeremy Siegel, one of the
world's top investing experts, has taken a long, hard, and in depth look at
the market and the stocks that investors should acquire to build long-term
His surprising finding is that the new technologies,
expanding industries, and fast-growing countries that stockholders
relentlessly seek in the market often leads to poor returns. In fact,
growth itself can be an investment trap, luring investors into overpriced
stocks and overly competitive industries.
The Future for Investors
shatters conventional wisdom and provides a framework for picking stocks
that will be long-term winners. While technological innovation spurs
economic growth, it has not been kind to investors. Instead, companies that
have marketed "tried and true" products for decades in slow-growth or even
declining industries have superior returns to firms that develop "the bold
and the new." Industry sectors many regard as dinosaurs - railroads and oil
companies, for example - have actually beat the market.
Siegel presents these strategies within the context of the coming shift in
global economic power and the demographic age wave that will sweep the
United States, Europe and Japan. Contrary to the popular belief that these
economic and demographic trends doom investors to poor returns, Professor
Siegel explains the True New Economy and how to take advantage of the
coming surge in invention, discovery and economic growth.
faster the world changes, the more important it is for investors to heed
the lessons of the past and find the tried and true companies that can help
you beat the market and prosper in the years ahead.