First off, the chart you link to does not support your blanket statement. Staying with last year’s hot sector beats switching to last year’s loser 15 of 20 years. If you started with $1000 and invested in the previous year’s best sector every year from 1987-2005, you’d end up with $11770. Switching every year to last year’s worst sector gets you $3081.
The next analysis you link to is a bit suspect since the guy claims 1% increase for 20 years is, yes, 20% (it’s 22 – compounding). That bumps his supported price up to $346k instead of $315. And who says the 1986 price was the ‘right’ one? If you take the 1994 median of ~250k and give 12 years of 3.9% appreciation, you’d predict a price today of $396. If you took the 1997 price of 292k – just at the beginning of the boom/bubble – you’d predict a supported price of $412.
Your San Diego stuff is better, since Rich has collected more convincing (longer term) numbers.
