john bogle comment at yahoo

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john bogle comment at yahoo

Postby bankmaggot » Thu Feb 07, 2013 12:38 am

What did john bogle mean when he said (paraphrasing) lots of money going into equities is a bad sign for the market?
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Re: john bogle comment at yahoo

Postby SSSS » Thu Feb 07, 2013 1:17 am

Probably something like this:

Image
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Re: john bogle comment at yahoo

Postby stemikger » Thu Feb 07, 2013 1:37 am

Does anyone have a link. Thanks.
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Re: john bogle comment at yahoo

Postby Langkawi » Thu Feb 07, 2013 1:53 am

stemikger wrote:Does anyone have a link. Thanks.

The OP obviously does not understand the concept of a content scraper. Mr. Bogle's remarks were actually made during an interview on CNBC last Friday (Feb. 1).
http://video.cnbc.com/gallery/?video=3000145269
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Re: john bogle comment at yahoo

Postby NYBoglehead » Thu Feb 07, 2013 8:08 am

I think the sentiment of the point was everyone tends to rush in after the market has had a good run. These are the same people who get out of the market when it goes down. So they get on this hamster wheel of getting in and out during the ups and downs and their personal returns lag the returns of the market.

So it would have been more beneficial for these people to have been in the market the whole time and experienced the more than 110% gain since the 2009 lows.
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Re: john bogle comment at yahoo

Postby matthewjheaney » Fri Feb 08, 2013 11:35 am

Your rate of return on an investment is the earnings (of a stock, say) divided by the price you paid. If lots of people get into the market, this drives up prices, thus diminishing future returns. Basically, the earnings yield of a stock is the reciprocal of the P/E. During periods of euphoria, the P/E gets bid way up, so the yield goes down.

A classic example is Legg Mason. That fund beat the S&P 500 for something like 15 years straight, but the only people who made money were the ones who bought that fund very early on. Ditto for anything you might have bought during latter part of the 90s.

-Matt
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