You know, on average, you got around a seven and a half % real return above inflation from holding equities for a long time. So you would say, that's wonderful. So now all i need to do is just own more equities when they're going to give a higher return, o less equities when thy're goin o give a lower return, and i'm going to do better than somebody that just does a static aplication of always being, say, 65 % in equities and 35 % and, say, treasury bills. And you would think that that is what you would find, but when you run the numbers, you don't find that. I mean, you find that over the last hundred and 20 years, that that extra information from the earnings yield didn't help you. And in fact, over the last 20 years it's been really terrible. I would have had you very under weight equities, because the earnings yield has been relatively low. I mean, to day, the us. Earnings yield is in the 98 per centile of bad. And so you would not want to own very many equities to day based on that rule. But what's happening is it's missing the it's missing a critical component. What is it that you should be investing in if you're not investing in equities? Or what should you compare those equities too? Well, you might say, i'm going to compare it to bills, because i'm either going to be in bills, i'm going to be in a in equities. Well, if you're going to do that, then you need to think about what's the expected real return of owning bills. You can't just say, i' mon to own this based on its expected return, or i'm just going to own that without thinking about its expected return. And really what we should be comparing is more apples to apples. You know, either equities that well deliver this long term real return, a including a premium for the risk we're taking, or something else that gives us a safe, long term, real return. And that thing exists, and its tips. It's its us inflation protected bonds called tips. And they've been around since 19 97. Unfortunately, they haven't been around for a hundred and 20 years. A they had been, i'm sure that the research that we've done and the understanding of this would be just second nature to everybody. But tips is still a little bit of a

weir little corner.

You know, like a lot of people haven't even heard of them exactly. Or it's like or those those eye bonds that you can buy at the post office. So what we did in our researches, we said, well, what if now we did this apples to apples investment programme, where you were either invested in equities or in tips, depending on the spread in expected return between the two. So let's take the earnings yield of equities minus the yield, the real yield on tips, and we'll call that the excess expected a return on em on equities, or the excess earnings yield. And let's do our aplication according to that. And wi'll either be in equities or be in tips, depending on how attractive that is. So back in 19 99, for instance, amazingly, and partly this is because u at the us. Tips market was so young. In 19 99, tips were yielding four %, four % above inflation. And a us. Equities back then, it was sort of a pretty a ebuliant time for equities. The earnings yield was around four %. Why ou you want to own equities if theyr expected long term return as four %, but you could buy tips and get four %? Well, there might be some reasons to own a little bit of equities, but you wouldn't want to own a lot. And sure enough, that was a really good decision, ex post but it made sense. It's not just, is not a cherry picking thing, just makes sense, right? And over the last few years, a right, tips have been negative. I mean, which is really weird, et cetera. But you know, the real interest rate has been negative because a inflation has been relatively high, and expected to be high, compared to what a we can get on a treasuries. And so even though the earnings yield has been really low a, the spread between the earnings yield and tips has been pretty high. And so it made ense on that basis, continued to own a healthy amount of equities. And so then you say, well, ok, you know, that's just 19 97. That's really a short time. What, 25 years? That's a really short time, and is super short when youetinking about the stuff. So we said, well, what would it look like if we went back to 19 hundred? Well, there is no tips. So we said, well, can we try to make believe you don't, figure out what tips might have been trading at going back? And so in our research paper, we did that. You know, it's far from perfect. I mean, who knows where they would have traded, but we've made some guesses based on the information that existed at each moment and time going back. And then we ran the analysis all the way back. And you know, just as from 19 97 till to day, it was a good way to invest your money. It was all so good from 19 hundred 19 97. So that's really the research paper and a nutshell, and it's really just based on this idea that, the all else equal, the more you expect to earn relative to your safe asset, the more exposure to take. And is right back to the whole coin flipping, the whole coin flipping exercise as well.