Bull and Bear Served at Fund Manager Dinner

Grantham concluded that investors who buy, say, an index fund -- such as Vanguard's (VTSMX Quote)Total Stock Market Index fund -- and hold it for the next seven years are likely to lose about 1.8% a year, after inflation.

Bull champion Siegel came armed with his own presentations but didn't seem to fight with conviction. He also argued that bonds and commodities, including oil, are overvalued. And he didn't claim that Wall Street was a bargain, either. "Stocks are not cheap by any means," he admitted.

It doesn't exactly make you want to rush out and invest.

So don't be surprised if a few fund managers pause before throwing more money into the market in the next few weeks. Boston is the home to Fidelity, Putnam, MFS, Evergreen and other big fund companies, and most had people present.

Yet the most intriguing question of the night went unanswered. And it goes right to the heart of Grantham's case and the small matter of whether you should be putting more money into the market or taking some out.

Today, from Wall Street to Washington, the debate is raging over skyrocketing U.S. company profits. The statistics appear to show these are now taking a far higher share of the economy than ever before in modern history. Naturally there are lots of cheerleaders who say how healthy this is. But stock market bears, like Grantham, argue it means profits must fall again back to average historic levels. Meanwhile, in Washington, many Democrats argue these record profits prove that ordinary workers are getting a raw deal.