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July 27, 1998

I have personally tried to invest money, my client's money and my own, in every single anomaly and predictive device that academics have dreamed up--and I have yet to make a nickel on any of these supposed market inefficiencies. A true market inefficiency ought to be an exploitable opportunity. If there's nothing investors can exploit in a systematic way, time in and time out, then it is hard to say that information is not being properly incorporated into stock prices.
Richard Roll: Source: "Still on a Random Walk" by Burton Malkiel in Bloomberg Personal Finance (July/August 1998)

The bull market from 1982 through 1997 has given investors an after inflation return of 12.8 percent per year, which is nearly six percentage points above the historical average. But the superior equity returns over this period has barely compensated investors for the dreadful stock returns realized in the previous 15 years, from 1966-1981, when the real return was -0.4 percent. In fact, during the 15-year period that preceded the current bull market, stock returns were more below their historical average than they were above their historical average during the past 16 years.
     Jeremy J. Siegel in Stocks for the Long Run

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