My father once taught remedial math at City College in New York. He had a student, nicknamed “Less Than Chance” Diaz, who would consistently, on four-option multiple choice exams with no guessing penalty, score below 25%. But at least the guy didn’t pass. (Link courtesy of Kimberly Swygert over at No. 2 Pencil, an interesting blog about standardized tests.)
Greenspan made his famous remarks about “irrational exuberance” on December 5, 1996. The Dow closed that day at 6413. If you had bought the index the next morning and sold it at the open today (probably not a very clever idea), you would have earned a compound rate of about 3.75%. Now that isn’t great; you would have done a little better in bonds. But it beats inflation. So why is everyone acting like blood is running in the streets? Is there a divine right to 20% annual returns?