"I think the future of equities will be roughly the same as their past; in particular, common-stock purchases will prove satisfactory when made at appropriate price levels. It may be objected that it is far too cursory and superficial a conclusion; that it fails to take into account the new factors and problems that have entered the economic picture in recent years -- especially those of the movement toward less consumption and zero growth. Perhaps I should add to the my list the widespread public mistrust of Wall Street as a whole, engendered by its well-night scandalous behavior during recent years in the areas of ethics, financial practices of all sorts, and plain business sense." -- Benjamin Graham, June 1974 (source: Financial Analyst Journal of Sept./Oct. '74, via Longleaf 3Q11 letter)
Facts and Figures
11.6% of Americans moved residences between 2010 and 2011, the lowest level since records began in 1948. The peak of 20.2% occurred in 1985. (source: U.S. Census Bureau via Bloomberg)
"Among the 20,000 Chinese with at least 100 million yuan ($15 million) in individual investment assets, 27 percent have already emigrated and 47 percent are considering it. Rich Chinese [with 10 million yuan] have about 3.6 trillion yuan ($564 billion) invested overseas." (source: China Merchants Bank and Bain & Co.)
In September, stock price correlations surpassed the levels experienced in 2008 after Lehman's collapse. Correlations hit 85% for the FTSE 100 and 90% for the S&P 500 (vs. a rough historical average of 30%). (Source: Longleaf 3Q letter)
These figures from a recent Allstate/National Journal poll are pretty striking -- the ongoing deleveraging of consumers' balance sheets has largely been forced by lower incomes and asset values, but now it is also backed by a decided anti-debt bias by the majority of borrowers, which is a sea-change from just a few years ago (although that's not quantified).
The affluent were much less likely to see debt as an obstacle, but otherwise the belief that it created more problems than benefits for society was widespread. That conviction is evident in another stunning result: Three-fourths of those polled said they believed they personally would be better off if they carried “no debt by paying off all your lo