Triumph of the Optimists: 101 Years of Global Investment Returns (Hardcover)

~ (Author), Paul Marsh (Author), (Author) "The year 2001 was scarred by terrorism, and financial markets were beset by turmoil..." (more)
Key Phrases: real index values, maturity premia, bond maturity premium, United States, United Kingdom, South Africa (more...)

Editorial Reviews

Review

"It's a big book chock full of data, analysis and bonny charts, covering 101 years of investing". -- Alen Mattich, Dow Jones Newswires

"… and now a brilliant new book. -- Jason Zweig, Time Magazine

A brilliant new book. -- Review

Our favorite book on global stock market performance. . . . [It] epitomizes outstanding investment research. -- Active Trader magazine

The evidence produced by Mr. Dimson and his colleagues is striking. . . A provocative lesson. -- Matthew Lynn, Financial Times

This [book] suggests that the recent blind adherence to the cult of the equity needs to be questioned. -- Philip Coggan, Financial Times

Review

At the very least, this [book] suggests that the recent blind adherence to the cult of the equity needs to be questioned and that the strategic weighting of bonds in institutional portfolios should be increased.
(Philip Coggan Financial Times )

A model of how investor research should be carried out. . . . Like most great books, Triumph of the Optimists has us saying 'Wow!' and 'Unbelievable!' with startling regularity. . . . This is a book that belongs on every investor's bookshelf.
(Victor Niederhoffer and Laurel Kenner, "Money" columnists msn.com )

Connoisseurs of financial history will find plenty to enjoy in Triumph of the Optimists. . . . The evidence produced by Mr. Dimson and his colleagues is striking, [and]. . . these issues are more than just academic. . . . A provocative lesson.
(Matthew Lynn Financial Times )

By far the most important investment book in years. . . .It is the best and most complete source of data yet available. . . . If you spend an hour with it and don't learn anything worth the price then you're truly lousy at learning about markets. . . Right now, buying this book makes more sense than buying stocks.
(Ken Fisher Bloomberg Money )

A brilliant new book.
(Jason Zweig Time )

Our favorite book on global stock market performance. . . . [It] epitomizes outstanding investment research. . . . Unless intelligent life is discovered on another planet and a stock market is found to have been operating there for some centuries, it is unlikely that much new data can be brought to bear on the issue of long-run stock returns. Triumph of the Optimists may well be the last word on the subject for some time to come.
(Active Trader magazine )

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Product Details

• Hardcover: 320 pages
• Publisher: Princeton University Press; illustrated edition edition (January 1, 2002)
• Language: English
• ISBN-10: 0691091943
• ISBN-13: 978-0691091945
• Product Dimensions: 11 x 8.8 x 1.2 inches
• Shipping Weight: 3.8 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (13 customer reviews)
• Amazon.com Sales Rank: #394,271 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

70 of 82 people found the following review helpful:

2.0 out of 5 stars Very disappointing given the price, July 14, 2003

By	Tim Josling (Melbourne, Australia) - See all my reviews (REAL NAME)

This is a very handsome book with lovely graphs etc. However I was after a useful summary of historical market performance.

This book was lacking in several respects:

1. The numbers behind the graphs are not provided and are not available so you cannot do any further analysis yourself. The graphs themselves are also drawn in such a way that it is hard to extract the numbers using a ruler.

2. The problem of survivorship bias. They claim that while the 16 countries analysed are an incomplete list (only 70% of world GDP in 1900), this is not a big problem, they feel. Their message that stocks do well in the long run supposedly remains intact, however they do not provide any solid evidence of this. The countries left out of course suffered terrible performance, with total confiscation of assets in most cases and major losses in others.

The countries left out include: Russia, China, Eastern Europe, Latin America. As an example, Argentina was the wealthiest country 100 years ago but was left out. They claim that their criterion for inclusion was the availability of data, but Switzerland was included even though the data is incomplete.

In my opinion, some attempt should have been made to adjust for this problem.

3. No assessment is made of the issue of capital controls etc as an impedement to implementing the world indexing strategy. It is simply assumed that equal dollar indexing could be implemented without any costs, and with no taxes.

All in all, this book fails to provide a realistic and convincing assessment of global investment returns in the real world.

Victor Niederhoffer uses this book to justify his bullishness on stocks, Sorry Vic, no cigar.

15 of 16 people found the following review helpful:

5.0 out of 5 stars Triumph of the Investigators, June 23, 2002

By	Brett Steenbarger (Naperville, IL USA) - See all my reviews (REAL NAME)

"In writing this book," authors Dimson, Marsh, and Staunton conclude, "we set out to answer four big questions: How have stock markets performed over the twentieth century, domestically and internationally? How has this compared with bonds and bills? What has been the impact of foreign exchange fluctuations? And what toll has inflation taken?"

In answering these questions, the authors have achieved perhaps the greatest triumph: assembling a 101 year database from 16 countries that is free from the "easy data" biases that result from utilizing readily available--but skewed--financial information.

In the spirit of their title, the authors find that stocks worldwide provide real risk-adjusted returns above and beyond bills and bonds. Interestingly, their estimates of risk premia are more modest than those offered by traditional sources. They also provide intriguing support for seasonality effects and the favorable returns associated with high dividend yields, value investing, and worldwide diversification.

Quite simply, I know of no other source of information on the "big picture" of investing that is as thorough or as lucidly outlined. This is a rare work of theoretical *and* practical significance.

18 of 21 people found the following review helpful:

5.0 out of 5 stars A remarkable and important book, June 14, 2002

By	James O'Shaughnessy (New York, NY United States) - See all my reviews

Triumph of the Optimists: 101 Years of Global Investment Returns is a remarkable and important book. Churchill's maxim that "The further backward you can look, the farther forward you are likely to see" is useful in approaching this book. The authors have painstakingly created data series back to 1900 for 16 countries and come to brilliant conclusions about what the future holds for investors. From the past the future flows, and as long as human beings price securities it is likely that we will continue to make erroneous predictions based upon our most recent experience.

Triumph of the Optimists shows readers what the most likely returns will be for world investors and offers vital data for investors planning for the future. This is a "must have" book for both professional and amateur investors.