Making Money The golden age of returns is over - Stock market expert
24 snips
Sep 15, 2025 
Elroy Dimson, a stock market expert and emeritus professor at London Business School, sheds light on the evolution of stock market research and its implications for future investment returns. He discusses the pitfalls of survivorship bias and the importance of quality data in analyzing long-term trends. The conversation dives into the ideals of American exceptionalism in investing and contrasts Norway's innovative management of its sovereign wealth fund with traditional approaches. Dimson emphasizes the need for careful long-term strategies in a changing market landscape.
AI Snips
Chapters
Books
Transcript
Episode notes
Financial Archaeology Of Old Market Records
- Dimson recounts 'financial archaeology' like searching dusty exchange books in Austria to extend historical data.
- Researchers climbed ladders and transcribed old handwritten records to reconstruct markets.
Survivorship Bias Inflates Historical Returns
- Survivorship bias can inflate historical index returns when back-histories include only survivors.
- Dimson warns markets or companies that collapsed may be missing from old series, skewing results upward.
Use Common Currency For Fair Comparisons
- Dimson finds world equity returns (20th century) averaged about 4.8% real across countries and 5.6% for the world index.
- He stresses using common currency (USD) to compare countries because inflation differs widely.
