Fans of Keyes will remember the famous quote. I was reminded of it while reading the most recent Selected American Shares Update that arrived in the mail. More on the Selected American Shares fund here.

Christopher Davis and Kenneth Feinberg have done a good job for me in the past two years. I bought the fund in Nov. 2003 and have seen roughly 12% average annual returns since then. Not bad, I'll take it. Keep up the good work guys.

I appreciate their candid and well written reports. This time they lead with a discussion on the likelihood of outsized returns for the S&P 500 over the decade starting in 2000. They note:

"Because [the S&P 500] return has been a negative 2.4% per year over the last five years, it would have to be a positive 17% per year over the next five years in order for the 10-year return to reach 7%...If instead the market compounds at a very satisfactory 10% per year over the next five years, a decent result for those starting today, the 10-year return would be only 3.5%. Thus, our prediction for a low-return decade does not mean that we are pessimistic about the future, but rather realistic about the past. In fact, investors starting today are for more likely to enjoy satisfactory returns than those starting five years ago despite the fact that the mood then was euphoric and today is very wary."

I particularly like that last part. It really speaks to the irrational investment mindset that so many people have. So, this is the BEST time to invest, when people as a whole feel WORSE about the market.

Like Chris Tucker said in Friday, "Remember it, write it down, take a picture, I dont' give a f*ck." This is key stuff.mortgage calculator