- November 1, 2014: Vol. 26, Number 10

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Grape expectations: Investors should not drink the Kool-Aid

by Randall Zisler and Matthew Zisler


Dogma, or received wisdom, can, and often does, blind the otherwise discerning investor, especially when the investor must report to institutional investors and their investment committees. “Drinking the Kool-Aid,” which usually pertains to those holding an unquestioned belief without critical examination or nuanced introspection, can also refer to endorsing knowingly or supporting reluctantly a doomed or dangerous idea because of peer pressure, so-called expert opinion, or the money management equivalent of acting in a flagrantly arbitrary and self-serving fashion. Authority trumps evidence under pressure!

This essay addresses three issues: The first is the extent to which return expectations have ratcheted downward; the second is the need to recognize and embrace these changes; and the third is how investors can still invest profitably in a maturing market. We have prepared an extensive report, portions of which this article summarizes. We invite cur

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