Thursday, March 29, 2007

Are Growth Stock Prices Reflecting a Cheery Consensus?

In one of his chairman's letters, Warren Buffett once stated that ...

"The future is never clear, you pay a very high price in the stock market for a cheery consensus."

I just looked at the 10 year returns of the Russell 1000 Value Index, and the Russell 1000 Growth Index.

Frightening, the cost of a cheery consensus, particularly those orienting towards the growth side of the equation.

Sidebar note: If you're on a blog aggregator, you can visit The Confused Capitalist here for additional articles and exclusive content!

The difference in the current valuation metrics on the two indices are significant, scary, and points to, may I suggest, more of the same looking forward.



JW

The Confused Capitalist

1 comment:

Monty Loree said...

Hey ConfusedCapitalist,
I saw your post over at CanadianCapitalist's blog and thought I should drop over.

We are running a Canadian Tour of Personal Finance blogs coming up on April 16.

I am looking for the first 10 personal finance blogs which want to participate.

This is similar to the Carnival of personal finance, if you're familiar with that.

Anyway,
If interested please do sign up at http://www.canadian-money-advisor.ca

Thanks and if you can, please tell a few Canadian Personal Finance Bloggers about the event!