TY  - JOUR
AU  - Barsky,Robert B.
AU  - Long,J. Bradford De
TI  - Bull and Bear Markets in the Twentieth Century
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3171
PY  - 1989
Y2  - November 1989
UR  - http://www.nber.org/papers/w3171
L1  - http://www.nber.org/papers/w3171.pdf
N1  - Author contact info:
Robert B. Barsky
Department of Economics
University of Michigan
Ann Arbor, MI  48109-1220
Tel: 734/764-9476
Fax: 734/764-2769
E-Mail: barsky@umich.edu

J. Bradford DeLong
Department of Economics
601 Evans Hall
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-4027
Fax: 510/642-6615
E-Mail: delong@econ.berkeley.edu
AB  - The major bull and bear markets of this century have suggested to many that large decade-to-decade stock market swings reflect irrational "fads and fashions" that periodically sweep investors. We argue instead that investors have perceived significant shifts in the long-run mean rate of future dividend growth. and that stock prices depend sufficiently sensitively on expectations about the underlying future growth rate that these perceived shifts would plausibly generate large swings like those of the twentieth century. We go on to document that analysts who have often been viewed as "smart money" held assessments of fundamental values based on their perceptions of future economic growth and technological progress: the judgments of these analysts, like the assessments of fundamentals we generate from simple dividend growth forecasting rules, track the major decade-to-decade swings in the market rather closely.
ER  -