BRENNAN ARTICLE ON VG WEBSITE

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EmoIntel
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Joined: Wed Dec 19, 2007 9:47 am

BRENNAN ARTICLE ON VG WEBSITE

Post by EmoIntel »

Early on in the article Mr. Brennan suggests that an investor should not be so concerned with the returns of the market for such a short period of time that we have seen in the last couple of months.
He quotes some longer term returns in % form. He conveniently selects a five year period where he states a 75% return if invested in the market during that period. Now if you look back at the 500, you will see that it was trying to find a bottom from 07/2002 to 03/2003, which during that period it traded sideways in a range from 775 to 950. One time it printed a low of 775, and 3 times it printed a low of 800 during that time period. He selects the final low made in 03/2003 (VG 500 trading at $74.20) to establish his pivot point for investment return purposes. 1997 was the last time that the price of this fund was trading that low. Pretty convenient selection process. Kind of sounds similiar to many of the Mutual Fund companies who recently stopped quoting their 10 year returns, and emphasize their 5 and 3 year returns.
How about if Jack goes back, about 3 more years, when the VG 500 was trading at $141.03 on 03/23/2000. Today, 8 years later, the 500 fund is trading at $123.05.
Shady journalism on his part. Unless of course, you are a great market timer, and new to enter the market at its bottom during 03/2003.
Quoting someone ??? "There are lies, there are d--- lies, and then there are statistics.
Shame on you Jackie boy!!!!

EMO
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soaring
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Location: North Central Florida

Post by soaring »

I'm surprised there are no comments.

I haven't verified your accuracy but assuming it is accurate, I certainly agree this is data mining at its worst. Note: I'm not questioning your input just noting I personally haven't checked it out.

Why in the world would Brennan do this??

Gene
Levett
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Post by Levett »

Is this the piece that's being referred to? https://personal.vanguard.com/us/Vangua ... 08_ALL.jsp

If so, what's the problem? You can click on the 1 year or 30 year graph, which goes precisely to his point about short and long-term views. I've lived through the entire 30-year period. I simply don't see the misrepresentation. Bob U.
kayman
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Post by kayman »

Does anyone have the historical average of 5-year periods in the market?
Topic Author
EmoIntel
Posts: 8
Joined: Wed Dec 19, 2007 9:47 am

TO SPARTIE

Post by EmoIntel »

If you think that his five year selection was strictly coincidental or random, then you certainly qualify to work in the VG Processing dept.

EMO
Topic Author
EmoIntel
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TO KAYMAN

Post by EmoIntel »

You could figure it out if it was relevant outside of MARKETING.

EMO
Topic Author
EmoIntel
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Joined: Wed Dec 19, 2007 9:47 am

TO SOARING

Post by EmoIntel »

Because he does not have the knowledge, VISION, character, or leadership abilities that his great predecessor had, and still has.
Without evidence, I suspect the there is a FIRE behind the SMOKE leading to his stepping down. If my feel is right, it usually takes a couple of months before it leaks to the public.

EMO
Joe S
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Post by Joe S »

1987?
An honest assessment would have at least hinted that the S&P is down since the 2000/2001 peak, and it's sure not looking good to go back up there any time soon. Well, at least he shows the chart - probably hopes his words will distract you.
Note: 10 year annualized total return is 3.99%, Total Stock 4.46%, Total Bond 5.78%.
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Taylor Larimore
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Location: Miami FL

Unfair criticism

Post by Taylor Larimore »

Hi EmoIntel:

Early on in the article Mr. Brennan suggests that an investor should not be so concerned with the returns of the market for such a short period of time that we have seen in the last couple of months.
He quotes some longer term returns in % form. He conveniently selects a five year period where he states a 75% return if invested in the market during that period. --

-- Shady journalism on his part. Unless of course, you are a great market timer, and new to enter the market at its bottom during 03/2003.
Quoting someone ??? "There are lies, there are d--- lies, and then there are statistics.
Shame on you Jackie boy!!!!


Is this the part you are referring to:

When we say that the stock market is down by more than 15% from October, it's helpful to remember that it's down about half that amount in the last 12 months. And over the past five years, the market returned about 75%. So it's not surprising that we have some pullback after a good run. Unpleasant, yes, but a natural part of the market's activities.


Frankly, I don't see anything wrong with this paragraph or the entire article. Mr. Brennan was not using the 5-year figure to promote Vanguard or make any other point. I think you must have misunderstood the article.

https://personal.vanguard.com/us/Vangua ... 08_ALL.jsp

Best wishes.
Taylor
heyyou
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Post by heyyou »

In the long term, does it really matter? That info does not change your allocation or your returns. Maybe you expected better, but disappointment is part of life, quite often too. He is leaving so I don't see the importance of any lame duck articles. Think of the posters that you discount their remarks, sounds like Brennan has been added to that list.
tibbitts
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question

Post by tibbitts »

I don't understand the use of "trading at $x" in the context of this argument. It seems like any use of NAV is misleading, because it ignores the effect of dividends.

It's true that the overall market has provided relatively poor returns (compared to historical averages) for some time now, but NAV just obscures the issue.

Paul
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