And "Chip" chimes in with a defense of Alan Sloan, and a demonstration of yet more... "quote mining" by AEI senior fellows James Glassman and Kevin Hassett:
When Allan Meltzer Ceased Being a Real Economist...: Chip said...
Here is the full quote from Alan Sloan http://www.tcsdaily.com/discussionForum.aspx?fldIdTopic=7385&fldIdMsg=11145:
One of the maxims of investing is that if something sounds too good to be true, it probably is too good to be true. Which brings us to one of the hottest business books around, Dow 36,000 (Times Books, $25) by James Glassman and Kevin Hassett. I don't normally review books, but Dow 36,000 has lots of buzz, as we say in the trendsurfing business. With good reason. Hassett is a former senior economist with the Federal Reserve Board, Glassman is a smart writer who for the past six years produced a fine business column for The Washington Post. More than that, Glassman and Hassett have a head-turning thesis: that over the long term, U.S. stocks are no riskier than your grandmother's boring Treasury bonds and that the Dow, far from being overvalued, should be around 36,000. So you see why the book is buzzworthy. It's also schizophrenic. It has wonderfully clear explanations of financial theory, excellent advice on general investing approaches. But it's also got seriously flawed parts, where the authors assert claims with mathematical precision but actually play fast and loose with numbers.
My problem with Dow 36,000 has nothing to do with the fact that the Dow has fallen more than 1,000 points from its all-time high on Aug. 25. Stomach-churning, but for long-term investors, a mere blip. My problem is that even if you accept the thesis that U.S. stocks are no riskier over the long term than Treasury bonds--which I don't--you have to torture the numbers to justify 36,000 as a reasonable price for the Dow today.
Glassman and Hassett turn this into:
One of the hottest business books around.... It has wonderfully clear explanations of financial theory [and] excellent advice on general investing approaches.
So add Alan Sloan to Burton Malkiel on the list of those grossly and mendaciously misrepresented be the back cover of Dow 36000.
By contrast, the blurbs from Arthur Louis http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/1999/12/07/BU105598.DTL, Jim Jubak, and Allan Meltzer all appear to be fair...