Stocks for the long run
The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies
by Jeremy J. Siegel · first published 1994
42% recommend42% neutral17% critical
Why HN recommends it
Long-run historical data on stock returns versus bonds and inflation, with a clear argument that stocks look less risky over long holding periods; suits investors and readers curious about market history.
Common criticism: Critics say its survivorship-biased data and historical focus overstate long-run stock returns.
Summarised by Claude from recommending comments
Stocks for the Long Run set a precedent as the most complete and irrefutable case for stock market investment ever written. Now, this bible for long-term investing continues its tradition with a fourth edition featuring updated, revised, and new material that will keep you competitive in the global market and up-to-date on the latest index instruments.Wharton School professor Jeremy Siegel provides a potent mix of new evidence, research, and analysis supporting his key strategies for amassing a solid portfolio with enhanced returns and reduced risk. In a seamless narrative that incorporates
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…earnings are quite volatile). The real dividends paid by the companies that make up the stock market have also grown over time. Jeremy Siegel, a finance professor at Wharton, wrote a great book called Stocks for the Long Run that shows stocks have grown about 7% per year (inflation adjusted) over the last 200 years. > What would the market look like if we corrected for the money supply? I think it's better to correct for…
on “Ask HN: Is the stock market's growth largely anything more than inflation?” ↗…time window's length is a large fraction of the 20th century. Not to mention extreme outlier events whose level of impact isn't represented at all in the historical data. A good book to read is Siegel's Stocks for the Long Run.
on “A Miserable Debt-Free Life” ↗>Jeremy Siegel, a finance professor at Wharton, wrote a great book called Stocks for the Long Run that shows stocks have grown about 7% per year (inflation adjusted) over the last 200 years You two are talking past each other. When he says inflation, he means M2, you're referencing something that…
on “Ask HN: Is the stock market's growth largely anything more than inflation?” ↗…and influence people - Carnegie, Feeling Good - Burns, Godel Esher Bach - Hofstadter, Fundamentals of Physics - Halliday and Resnick, Jonathan Livingston Seagull - Bach, The Commodore 64 User Manual, "Stocks for the Long Run", The Player's Handbook and Dungeon Master's Guide - Gygax, Dune - Herbert
on “Ask HN: What book changed your life?” ↗Stocks for the Long Run makes the pretty compelling case that over longer holding periods stocks are less risky than bonds.
on “Google will pay SpaceX $920M per month for compute” ↗…annualized return." He must know that 7% is something of a magic number, it's what Jeremy Siegel argued is the steady, annual inflation-adjusted gains for equites for the past 200 years in his seminal book "Stocks for the Long Run," which was written in 1994 and is the foundational argument for passive equity investing ("Irrational Exuberance" and others argue directly against it). The fact that the S&P 500 did 7.1% over 9 years…
on “Ted Seides Concedes Bet with Warren Buffett” ↗…index funds." Which is perfectly sensible investment advice, but if that's all you want, I can tell you "Go invest in index funds" right now and save you a couple hours of reading. ;-) Jeremy Siegel's Stocks for the Long Run is like Random Walk - it's decent, but the conclusion is basically "go invest in a stock index fund and don't worry about it". I'm not even sure that's great advice right now - he bases a lot of his…
on “Ask HN: Best books/source to learn about investing?” ↗Over the long term, stocks have higher returns than bonds. What makes you think that is true? We simply do not have enough data to judge. Books like Stocks for the Long Run use incredibly poor methodology, because they left companies that failed out of their indexes ( http://gregmankiw.blogspot.com/2009/07/stocks-for-not-so-lon... ). And when we have reliable data, for…
on “Ask HN: Steady 4-5% on $5 million?” ↗…science, etc. Some selected titles off my reading history (my library's software keeps track of books I've checked out): "Founders at Work" (Jessica Livingston), "The Rockefeller Billions" (Jules Abels), "Stocks for the Long Run" (Jeremy Siegel), "The Intelligent Investor" (Benjamin Graham), "When Genius Failed" (Roger Lowenstein), "One Up on Wall Street" (Peter Lynch), "Why Smart People Make Big Money Mistakes" (Gary Belsky…
on “What startup/VC/tech/internet blogs do you read ?” ↗There have been a lot of studies, see for example the book Stocks for the Long Run showing stocks beat bonds over pretty much any 50 year period in history for any country. It's just the nature of things - stocks will have high returns because investors won't invest otherwise and paper…
on “Berkshire Hathaway 2014 Annual Report [pdf]” ↗If you look at the graph from Stocks For The Long Run it's been about the most constant thing in value over a 200 year time frame http://www.pacificinvestmentadvisory.com/graphics/stoxGraph.... I daresay constant is not great. Goes up is better.
on “Segwit2x Bitcoin Fork Suspended” ↗…charts of bubbles it's not like that - the bubble charts you chose a decade or two out of the 200+ year of stock trading and think that's how it will continue. Pinker's analysis is much more like that in Stocks for the Long Run where you look at all available data and figure stocks have averaged like 7% over the 200 years. It doesn't prove it will continue but is quite a fair representation of what has happened so far.
on “Twenty Questions with Steven Pinker” ↗GP is actully referring to just earning the market rate of return, not beating it. Stocks for the Long Run and all that
on “Hyundai to acquire Boston Dynamics” ↗…survivorship bias). Also, remember that we are quite near the top in a market that is 50-60% of world share, so I would be conservative about projections when the end year is favourable (as an example, Stocks for the Long Run had a very big estimate of long-term returns in the late 90s...that fell in the subsequent years).
on “Every thought about personal finance I've ever had, as concisely as possible” ↗…inflation it has historically been good at being fairly constant in value in real terms which is not usually what you actually want in an investment - you want them to go up. Here's the famous graph from Stocks for the Long Run with the 200 year track record https://occaminvesting.co.uk/wp-content/uploads/2021/01/Stoc... That shows stocks as the best, though for a reasonably enterprising private investor rental property probably…
on “Costco is selling gold bars and they are selling out within hours” ↗