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首页 You Pay a Very High Price in the Stock Market fo…

You Pay a Very High Price in the Stock Market for a Cheery Consensus.pdf

You Pay a Very High Price in th…

stockdisney
2009-09-16 0人阅读 举报 0 0 暂无简介

简介:本文档为《You Pay a Very High Price in the Stock Market for a Cheery Consensuspdf》,可适用于经济金融领域

YouPayAVeryHighPriceInTheStockMarketForACheeryConsensusWarrenBuffettPensionfundmanagerscontinuetomakeinvestmentdecisionswiththeireyesfirmlyfixedontherearviewmirrorThisgeneralsfightingthelastwarapproachhasprovencostlyinthepastandwilllikelyproveequallycostlythistimearoundStocksnowsellatlevelsthatshouldproducelongtermreturnsfarsuperiortobondsYetpensionsmanagers,usuallyencouragedbycorporatesponsorstheymustnecessarilyplease("whosebreadIeat,hissongIsing"),arepouringfundsinrecordproportionsintobondsMeanwhile,ordersforstocksarebeingplacedwithaneyedropperParkinsonofParkinson'slawfamemightconcludethattheenthusiasmofprofessionalsforstocksvariesproportionatelywiththerecentpleasurederivedfromownershipThisalwayswasthewayJohnQPublicwasexpectedtobehaveJohnQExpertseemssimilarlyafflictedHere'stherecordIn,whentheDowearned$,oronbeginningbookvalueof,itclosedtheyearsellingat,,andpensionmanagerscouldn'tbuystocksfastenoughPurchasesofequitiesinwereofnetfundsavailable(ie,bondsweresold),arecordexceptfortheoftheevenmorebuoyantprioryearThistwoyearstampedeincreasedtheequityportionoftotalpensionassetsfromtoanalltimerecordthatcoincidednicelywitharecordhighpricefortheDowThemoreinvestmentmanagerspaidforstocks,thebettertheyfeltaboutthemAndthenthemarketwentintoatailspininAlthoughtheDowearned$in,oronbeginningbookvalueof,itfinishedtheyearsellingatAbargainAlas,suchbargainpricesproducedpanicratherthanpurchasesonlyofnetinvestablefundswentintoequitiesthatyear,ayearrecordlowTheproportionofequitiesheldbyprivatenoninsuredpensionplansfelltoofnetassets,afullpointdropfromtheleveldeemedappropriatewhentheDowwaspointshigherBy,thecourageofpensionmanagersroseintandemwiththepricelevel,andofavailablefundswascommittedtostocksTheDowthatyearaveragedcloseto,,alevelthenaboutabovebookvalueIn,stockswerevaluedfarmorereasonably,withtheDowsellingbelowbookvaluemostofthetimeYetanewlowofofnetfundswasinvestedinequitiesduringtheyearThefirstquarterofcontinuedatveryclosetothesamelevelBytheseactions,pensionmanagers,inrecordsettingmanner,arevotingforpurchaseofbondsatinterestratesoftoandagainstpurchaseofAmericanequitiesatpricesaggregatingbookvalueorlessButthesesamepensionmanagersprobablywouldconcedethatthoseAmericanequities,inaggregateandoverthelongerterm,wouldearnabout(theaverageinrecentyears)onbookvalueAnd,overwhelmingly,themanagersoftheircorporatesponsorswouldagreeManycorporatemanagers,infact,exhibitabitofschizophreniaregardingequitiesTheyconsidertheirownstockstobescreaminglyattractiveBut,concomitantly,theystampapprovalonpensionpoliciesrejectingpurchasesofcommonstocksingeneralAndtheboss,whilewearinghisacquisitionhat,willeagerlybidtoofbookvalueforbusinessestypicalofcorporateAmericabut,wearinghispensionhat,willscorninvestmentinsimilarcompaniesatbookvalueCanhisowntalentsbesouniquethatheisjustifiedbothinpayingcentsonthedollarforabusinessifhecangethishandsonit,andinrejectingitasanunwisepensioninvestmentatcentsonthedollarifitmustbelefttoberunbyhiscompanionsattheBusinessRoundtableAsimplePavlovianresponsemaybethemajorcauseofthispuzzlingbehaviorDuringthelastdecade,stockshaveproducedpainbothforcorporatesponsorsandfortheinvestmentmanagersthesponsorshireNeithergroupwishestoreturntothesceneoftheaccidentButthepainhasnotbeenproducedbecausebusinesshasperformedbadly,butratherbecausestockshaveunderperformedbusinessSuchunderperformancecannotprevailindefinitely,anymorethancouldtheearlieroverperformanceofstocksversusbusinessthatluredpensionmoneyintoequitiesathighpricesCanbetterresultsbeobtainedover,say,yearsfromagroupofbondsofleadingAmericancompaniesmaturinginthanfromagroupofDowtypeequitiespurchased,inaggregate,ataroundbookvalueandlikelytoearn,inaggregate,aroundonthatbookvalueTheprobabilitiesseemexceptionallylowThechoiceofequitieswouldproveinferioronlyifeitheramajorsustaineddeclineinreturnonequityoccursoraludicrouslylowvaluationofearningsprevailsattheendoftheyearperiodShouldpriceearningsratiosexpandovertheyearperiodandthatreturnonequitybeaveragedpurchasesmadenowatbookvaluewillresultinbetterthanaannualreturnHowcanbondsatonlybeabetterbuyThinkforamomentofbookvalueoftheDowasequivalenttopar,ortheprincipalvalueofabondAndthinkoftheorsoexpectableaveragerateofearningsonthatbookvalueasasortoffluctuatingcoupononthebondaportionofwhichisretainedtoaddtoprincipalamountjustliketheinterestreturnonUSSavingsBondsCurrentlyour"DowBond"canbepurchasedatasignificantdiscount(ataboutvs"principalamount,"orbookvalueoftheDowFiguresarebasedontheoldDow,priortotherecentsubstitutionsThereturnswouldbemoderatelyhigherandthebookvaluessomewhatlowerifthenewDowhadbeenused)ThatDowBondpurchasedatadiscountwithanaveragecouponofeventhoughthecouponwillfluctuatewithbusinessconditionsseemstometobealongterminvestmentfarsuperiortoaconventionalyearbondpurchasedatparOfcourse,thereisnoguaranteethatfuturecorporateearningswillaverageItmaybethatsomepensionmanagersshunstocksbecausetheyexpectreportedreturnsonequitytofallsharplyinthenextdecadeHowever,Idon'tbelievesuchaviewiswidespreadInstead,investmentmanagersusuallysetforthtwomajorobjectionstothethoughtthatstocksshouldnowbefavoredoverbondsSomesayearningscurrentlyareoverstated,withrealearningsafterreplacementvaluedepreciationfarlessthanthosereportedThus,theysay,realearningsaren'tavailableButthatargumentignorestheevidenceinsuchinvestmentareasaslifeinsurance,banking,firecasualtyinsurance,financecompanies,servicebusinesses,etcInthoseindustries,replacementvalueaccountingwouldproduceresultsvirtuallyidenticalwiththoseproducedbyconventionalaccountingAndyet,onecanputtogetheraveryattractivepackageoflargecompaniesinthosefieldswithanexpectablereturnoforbetteronbookvalueandwithapricewhich,inaggregate,approximatesbookvalueFurthermore,IseenoevidencethatcorporatemanagersturntheirbacksonreturnsintheiracquisitiondecisionsbecauseofreplacementvalueaccountingconsiderationsAsecondargumentismadethattherearejusttoomanyquestionmarksaboutthenearfuturewouldn'titbebettertowaituntilthingsclearupabitYouknowtheprose:"Maintainbuyingreservesuntilcurrentuncertaintiesareresolved,"etcBeforereachingforthatcrutch,faceuptotwounpleasantfacts:ThefutureisneverclearyoupayaveryhighpriceinthestockmarketforacheeryconsensusUncertaintyactuallyisthefriendofthebuyeroflongtermvaluesIfanyonecanaffordtohavesuchalongtermperspectiveinmakinginvestmentdecisions,itshouldbepensionfundmanagersWhilecorporatemanagersfrequentlyincurlargeobligationsinordertoacquirebusinessesatpremiumprices,mostpensionplanshaveveryminorflowoffundsproblemsIftheywishtoinvestforthelongtermastheydoinbuyingthoseandyearbondstheynowembracetheycertainlyareinapositiontodosoTheycan,andshould,buystockswiththeattitudeandexpectationsofaninvestorenteringintoalongtermpartnershipCorporatemanagerswhoduckresponsibilityforpensionmanagementbymakingeasy,conventionalorfaddishdecisionsaremakinganexpensivemistakePensionassetsprobablytotalaboutonethirdofoverallindustrialnetworthand,ofcourse,bulkfarlargerinthecaseofmanyspecificindustrialcorporationsThus,poormanagementofthoseassetsfrequentlyequatestopoormanagementofthelargestsinglesegmentofthebusinessSoundlyachievedhigherreturnswillproducesignificantlygreaterearningsforthecorporatesponsorsandwillalsoenhancethesecurityandprospectivepaymentsavailabletopensionersManagerscurrentlyoptingforlowerequityratioseitherhaveahighlynegativeopinionoffutureAmericanbusinessresultsorexpecttobenimbleenoughtodancebackintostocksatevenlowerlevelsTheremaywellbesomeperiodinthenearfuturewhenfinancialmarketsaredemoralizedandmuchbetterbuysareavailableinequitiesthatpossibilityexistsatalltimesButyoucanbesurethatatsuchatimethefuturewillseemneitherpredictablenorpleasantThosenowawaitinga"bettertime"forequityinvestingarehighlylikelytomaintainthatpostureuntilwellintothenextbullmarketEditor'sNote:Thiseditor'snoteaccompaniedtheoriginalpublicationofthisarticle:WarrenBuffettisadowntoearthmanofwhopreferstooperateoutofhisnativeOmaharatherthaninthecanyonsofWallStreet,buttheprosregardhimaspossiblythemostsuccessfullivingmoneymanager,adirectdescendantofthelegendaryBenGrahamunderwhomhestudiedBuffettmadeafortuneforhimselfandhisclientsintheFiftiesandSixtiesbutthrewinthetowelinbecausehecouldnolongerfindbargainsTheninlate,whentheDowJonesindustrialswerebelowandtheairwasthickwithdoom,hetoldForbes:"IfeellikeanoversexedmaninaharemThisisthetimetostartinvesting"Withinmonths,thegreatestrallyinhistorybegan,withtheDJIrunningalmostpointsinabitoverayearWhatdoesBuffettthinknowInthisarticle,heputsitbluntly:Nowisthetimetobuy

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You Pay a Very High Price in the Stock Market for a Cheery Consensus

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