![]() ![]() Siegel sidesteps pessimism not because he thinks bad stuff doesn’t happen, but because he has a longer time horizon than most. The last 10 years has just offset the previous decade.” “But that’s only because we had unreasonably high returns in the 1990s. “The past decade has been frustrating,” he said. Over the previous 20 years – 1991 to 2011 – the market had actually performed above average. But he doesn’t care about 10-year returns. Over all long historic periods the stock market has produced positive returns after inflation.Ī journalist in the room rebutted that stocks had actually shrunk over the previous decade. He was, in 2011, bullish on the stock market. Six years ago I interviewed Jeremy Siegel, a Wharton finance professor with a reputation for investment optimism. Pessimism can be grown from a crazy thought and clutched indefinitely. ![]() Optimism demands facts and is ditched at the first sign of trouble. We coddle it for longer than is necessary. We don’t just respond faster to pessimism. ![]() Daniel Kahneman once wrote: “Organisms that treat threats as more urgent than opportunities have a better chance to survive and reproduce.”īut on the other hand it’s crazy. Forecasting the bankruptcy of oil giants as electric cars proliferate sparks immediate giggles. SARS got more attention than the massive decline in HIV mortality.įorecasting $250 a barrel oil in 2008 sparked immediate congressional hearings. Y2K got more media attention than any individual tech company. Pessimism can be hard to distinguish from critical thinking and is often taken more seriously than optimism, which can be hard to distinguish from salesmanship and aloofness. Hearing that the world is going to hell is more interesting than forecasting that things will gradually get better over time, even if the latter is accurate for most people most of the time. Tell someone they’re in danger and you have their undivided attention. Tell someone that everything will be great and they’re likely to either shrug you off or offer a skeptical eye. Pessimism is intellectually seductive in a way optimism only wishes it could be. ![]()
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