Same Old LA Story

It's a fairly stereotypical week in Los Angeles: beautiful weather bookended by an earthquake and the L.A. Marathon coming up on Sunday. I guess with the time change and warmer weather, everyone wants to get outside and run. I luckily slept through the earthquake, but was much more shaken this week by something my father forwarded me. The Leuthold Group published a study of annualized total returns for the S&P 500 during 10-year periods beginning in the 30s:

Annualized return for the S&P 500

1930 to 1939 .....................+ 0.0%

1940 to 1949 .....................+ 9.2%

1950 to 1959 .....................+ 19.4%

1960 to 1969......................+ 7.8%

1970 to 1979 .....................+ 5.9%

1980 to 1989......................+ 17.5%

1990 to 1999......................+ 18.2%

2000 to 2009......................- 0.9%

Given that the decade of 2000 to 2009 was the worst in history (including the decade that included the Great Depression), it seems somehow self-evident to me that, as the Dow Theory maintains: "During the years 2000 to 2009, the US maintained its fabulous standard of living through credit and borrowing from other countries. And that's still the case, but the process is unsustainable. And if something is unsustainable it will end."

Although there is still plenty of wealth left in the U.S. according to Forbes Magazine's annual list of billionaires, what I'm still trying to wrap my head around is something that I read this week on Culture Monster: "when a billionaire donates $1 million, it's the equivalent of a millionaire giving $1,000; of a person with a net worth of $100k giving $100." Unfortunately, as Mike Boehm wrote, "SoCal billionaires [are] plentiful, but most are not known for giving big sums to the arts." Luckily Eli Broad had a good year.