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THE PROBLEM

WHAT WARREN BUFFETT, JOHN TEMPLETON,
JOHN BOLLINGER, BARTON BIGGS AND OTHERS
HAVE SAID ABOUT THE FUTURE OF THE STOCK MARKET
Many investment experts, including the "Oracle of Omaha" Warren Buffett, John Templeton (now deceased founder of the Templeton family of mutual funds), John Bollinger (noted technical analyst, and the creator of the "Bollinger Bands") and Barton Biggs (managing partner of hedge fund Traxis Partners and former Chief Global Strategist of Morgan Stanley), predicted in recent years that investment returns in the stock market would most likely be significantly lower than the generous returns of the past for many years to come. Their predictions have proven to be correct, and were intended to apply far into the future.
WARREN BUFFETT'S OWN WORDS

     At the annual meeting of Berkshire Hathaway, Inc., held in April 2001, its chairman, Mr. Buffett, warned his shareholders to expect "returns from equities that are dramatically less than most investors have either experienced in the past or expect in the future."
     He also made his point in writing on page 3 of the annual report when he said, "The long-term prospect for equities in general is far from exciting."
     Mr. Buffett was also quoted in a Fortune magazine article as saying:
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...it would be 6%.  If you strip out the inflation 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.
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JOHN TEMPLETON'S OWN WORDS

     In October 2001, after a market decline of truly historic proportions, Sir John Templeton...a pioneer in the mutual fund industry and the namesake of the Templeton Funds...warned of even graver prospects in an interview with Consuelo Mack on CNBC TV's Business Center:
Over the next century you should expect your share prices to average 6% (return) a year.  Over the next five years, ten years, I think you'll be lucky to come out even on share prices.
JOHN BOLLINGER'S OWN WORDS

     Based upon his technical analysis of the market,  on October 29, 2001 John Bollinger provided his long-term view of the market in an interview with William Griffith on CNBC.
I think we've transitioned to a market like the one that prevailed in the late 60s through the 70s...the sideways market.  The Dow has gone absolutely nowhere for three, coming on four years now.  I think this will last maybe for another ten years.
BARTON BIGGS' OWN WORDS

     In the October 29 issue (Vol. 144, No. 8, Page 191) of Fortune, Mr. Biggs was quoted as saying the following regarding the relative performance of the U.S. stock market in the future compared with Europe and other markets:
The U.S. could be the worst big market in the world for a half-decade.
     These words from some of our country's most successful, experienced long-term investors are as valid today as when they were spoken. We should heed them.  These experts have lived through many market cycles and have seen it all.  In the past, Mr. Buffett has chosen not to comment publicly on the stock market.  One can only assume he has felt very strongly about the excessive optimism investors appear to have had for stock market performance in recent years and for the future.

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