Only One Bird in the Bush?

Only One Bird in the Bush -- or None?

Floyd Norris notes in his blog today that Intel shares are now back to where they were twelve years ago ("Approaching New Lows"; The New York Times, 11/13/08). Tell me about it.

Here's what I posted on his blog in response:

Intel shares I purchased in the mid-90’s are now up a cumulative 25%(!) over my 13 year-plus holding period — a stretch that includes the vaunted tech stock boom. Even that overstates my “gain”: according to the Bureau of Labor Statistics, the $9 per share I paid would have to be over $13 now just to have the same purchasing power.

Of course, if I sold now, I’d have to pay capital gains tax on my completely phantom “gain.”

If instead of two birds in the bush, investors can now expect only one — or less than one — where is the incentive to save? Invest?

A whole generation of (non)investors is being taught to ask for their bird in the hand, now, thanks very much.

P.S.: Good thing I'm a student of portfolio theory and thought to diversify my holdings by also buying a mutual fund tied to the Nikkei! (Japan's counterpart to the S&P 500).