Elroy Dimson

We thought that book, Triumph of the Optimists, we did that because we have a century of data

If you looked at the beginning of 1900 and you asked who was investing in financial assets, there would have been a small number of optimists who thought the commercial and industrial companies would do well.

and a much larger group of people who were cautious.

If you look at US endowments 100 years before, you would find that the endowments were full of bonds.

So the 20th century was one in which optimists, that's the people who bought common stocks, did well.

That does mean that you can now look at out-of-sample data because we put into the market data for the last complete century, the 20th century.

We've now got a quarter of a century out-of-sample rolling forward, which has been quite good, but not as good as the 20th century.

We can also go back in time.

And so some people have been looking

at evidence that predates 1900.

There's papers by a number of individuals.

The National Ambulance Journal has become a popular location for talking about these historical issues.

And it's clear that if you start in 1900 and you go back in time, performance of art equities wasn't quite so good either.

Our data changed the way people think about the reward for risky investment, for the equity risk premium.

And it's still changing because people are now saying, well, it was a good century, but it wasn't quite so good before that.

It's difficult going back in time.

We've done that using British data, which goes back further.

The attempts at doing the same comparisons for the United States are more difficult because if you want to cover the 1800s,

then you can't find a history for government bonds.

Essentially, you can find government bonds for part of it.