Dr. Alan O'Sullivan

It's both in the sort of some narrowness in how much that years don't easily go to double digits.

I mean, there's an inflation problem if we get there or to negative, which we did see in the details.

But those are pretty exceptional things.

And then the related thing is that with equities, expectations can take bigger leaps of faith.

So the growth expectations can be quite aggressive, but then the valuation changes can be again.

So, you know, we could get to CAPE ratio 45.

Why can't we get to 60 or 80 or something like that?

So in some way, sky is the limit.

And we are seeing some of that with the AEI.

AI-related stocks in this situation.

And so I think that excitability is just not there in the same way in bond markets, apart from what you are saying of the purely fundamental narrower scope that are anchored.

Yeah, yeah.

I think the simple big two there are, let's just talk of, like you said, up to about 2000, everybody, including myself, maybe I started a few years earlier, and academics started a few years earlier.

But basically, we were looking at Ibbotson yearbooks that became Morningstar yearbooks.

And so you are looking at

US data since 1926.

What's the average equity premium and other asset class premium?

And that was the expected long-run return for the future.

And that was basically based on the idea that there's some constant premium or constant real return that we can glean from those long-run averages.

And that was then leading to this funny situation in the very tail end of the century where every year you get this 20-25% returns in S&P 500 and