FSD, you said that the return was 7.2% compounded annually. Assuming a nominal 2.5% CPI (actually it was more 10 years back). over the 10 years, the inflation adjusted return would be 4.7%. If you look at Siegels book, “Stocks for the long run”, you’ll see that the long term compound real returns of the stock market have been 6.6%. So, Greenspan was right. The problem is that he didn’t take any action. If he had, we could have averted many bubbles.

Yes, the past decade has been a period of under-performance for stocks. It also included the worst bear market in 30 years. However, even at the depths of that bear market, stocks were always above the point where Greenspan uttered the words irrational exuberance.

If in 1999 I said that housing is due for a correction because the market is irrational, would you think I made a good call.