JY's Weblog

 jeudi 3 octobre 2002

Humbling Lessons From Parties Past.
  

I'm reading A Random Walk Down Wall Street, the last edition was reviewed in the end of 1998, and here is an excerpt from page 346:

"And if there are future shocks to the system (wars, recessions, terrorist attacks, droughts, etc...) that increase perceived risks, the various valuation relationships of the late 1990s could fall substantially, creating even lower returns than the 8 percent projection i have made. Thus, actual risks in the stock market may have increased as risk premiums in the market have been reduced.[...] And remember also that in the early 1990s, the financial press was replete with stories touting the wonders of the Japanese economic system and management techniques and insisting that the extraordinary multiples in the Japanese stock market were justified. The unexpected frequently happens".