Dr. Alan O'Sullivan

valuable debate to be had on should you expect that the kind of growth we saw in the last 10-20 years should continue in the future or whether we should expect something less and I mean that something less rates again 2% rather than the 3-4% numbers that have been there in the last decade.

Yeah, I think certainly one gets humble when the markets go the other way in something as important as U.S.

equities for a long time.

But the more I've studied this, I think the better I understand what happened and it doesn't

Yeah, it certainly doesn't make me change, like sort of throw in the towel at these points.

And in some way, I say that it is a Rorschach test for any investor to judge whether you care of this one observation of what has happened in the last 10 years compared to the evidence over the last 50 or 100 years, which is going the other way and saying that using contrarian measures such as this objective K-prime

they tend to get right.

And again, they can have these mistakes and there are ways of trying to improve them.

But I would just say that as a humble starting point, they are better than looking at the rear view mirror.

Rear view mirror more often than not has pushed you to the wrong direction.

Now, for the last decade, it worked the other way.

But is that what you want to extrapolate for the future?

That one observation?

If I can, I do then say that it worked fine for bonds, but for equities, any success that I had there, whether from luck or skill, was very short-lived in the sense that the equity bear market was short.

And I must say that I do think that equity investors were really lucky

that chat GPT came in end 22 and sort of saved, I think the bear market would have been more lonely.

And related to that, I have had this, let's say, deep puzzlement and frustration with this fact that the riskless real yield, like 10-year Gipsy yield in the US went from minus 1% to plus 2% in the 22-23 period and has stayed pretty much like that.

And earlier, many real assets, risky real assets, equities, real estate, private equity, etc., they were all justifying their high valuations partly by those very low real yields.

And then when real yields rose very sharply, there was just total sort of de-severing of that linkage.

Nothing to do with us.