US banks It is little wonder that Warren Buffett says the number one rule of investing is not to lose money. Even after a 60 per cent rebound since the low, investors would have been better off eschewing equities for the past 10 years. In a positive sign – or perhaps a negative one to contrarians who consider the last seven months a suckers’ rally – the sense of disgust with stocks today pales in comparison with earlier lost decades such as the 1930s or 1970s.
Consider the incredulity of their fellow academics back in May 1974 when Roger Ibbotson and Rex Sinquefield predicted that the Dow Jones Industrial Average would be likely to reach 10,000 in November 1999 based on their study of the equity risk premium. Halfway through a crushing bear market, stating we would all fly to work in personal hovercraft by that far-off date seemed more plausible.
