Mr Buffett on the Stock Market(Fortune, 22 November 1999):[A...

Mr Buffett on the Stock Market
(Fortune, 22 November 1999):
[A snip of what is a great article and puts things into perspective]

from the end of 1964 through 1981. Here's what took place in that interval:

DOW JONES INDUSTRIAL AVERAGE Dec. 31, 1964: 874.12 Dec. 31, 1981: 875.00

"Let me summarise what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like – anything like – they’ve performed in the past 17. If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate – repeat, aggregate – would earn in a world of constant interest rates, 2% [CPI], and those hurtful [brokerage and other transactions] costs, it would be 6%. If you strip out the [CPI] component from this nominal return, that’s 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more.
Now, maybe you’d like to argue a different case. Fair enough. But give me your assumptions. If you think the American public is going to make 12% a year in stocks, I think you have to say, for example, ‘Well, that’s because I expect GDP to grow at 10% a year, dividends to add two percentage points to returns, and interest rates to stay at a constant level.’ Or you’ve got to rearrange these key variables in some other internally-consistent manner. But the Tinker Bell approach – clap if you believe – just won’t cut it."