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It’s no secret I’ve been bearish but in the spirit of seeing the other side of the trade, I’ve been looking for a compelling bull case for equities for some time now. So this is a call to all the equity bulls out there. I’m looking for someone to make a compelling case for owning the broad US stock market over the next 3, 7 and/or 10 years.

I’m using these timeframes because I’ve shown here that margin debt suggests 3-year returns could be very poor. Jeremy Grantham’s shop, GMO, believes 7-year real returns will be negative. And there are plenty of measures that suggest 10-year returns should be close to zero. In fact, if the Fed is right, and demographics do matter to asset prices, returns over the coming decade could be significantly worse than zero.

Here are the ground rules. Any bullish case for equities under consideration here should:

  1. Be more than just a trend-following argument. I know the uptrend is in tact but that, in itself, doesn’t mean investors are likely to generate positive returns in coming years.
  2. Do more than simply criticize the CAPE (which is not even mentioned above) or any other measure, for that matter. Debunking any of my previous studies is welcomed but that’s not going far enough. It should make the positive case for owning equities going forward.
  3. Demonstrate, using some sort of historically valuable (meaning more than merely one prior occurrence) measures, that equities will likely outperform the risk free rate over any of the aforementioned time periods.

Send your responses here. I’m eager to see what you come up with. I’ll select a few that meet this criteria for publication here.