Jeremy Siegel Famous Quotes
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The superior performance of the original S&P 500 firms surprises most investors. But value investors (as described in Chapter 12) know that growth stocks often are priced too high, and excitement over their prospects often induces investors to pay too high a price. Profitable firms that do not catch investors' eyes are often underpriced. If investors reinvest the dividends of such firms, they are buying undervalued shares that will add significantly to their return.
Hindsight plays tricks on our minds.
Fear has a far greater grasp on human action than the impressive weight of historical evidence.
It can be shown that maximum diversification is achieved by holding each stock in proportion to its value to the entire market (italics added) ... Hindsight plays tricks on our minds ... often distorts the past and encourages us to play hunches and outguess other investors, who in turn are playing the same game. For most of us, trying to beat the market leads to disastrous results ... our actions lead to much lower returns than can be achieved by just staying in the market.
The good thing about the dividend-paying stocks is, first of all you have stocks, which are real assets if we have some inflation. I think we're going to have 2%, 3% maybe 4%. That's a sweet spot for stocks. Corporations do well with that. It gives them pricing power. Their assets move up with prices. I'm not fearful of that inflation.
