The same logic applies to investing in stocks and bonds. Recall that the equity premium puzzle asks why people would hold so many bonds if they expect the return on stocks to be 6% per year higher. Our answer was that they were taking too short-term a view of their investments. With a 6% edge in returns, over long periods of time such as twenty or thirty years, the chance of stocks doing worse than bonds is small, just like (though perhaps not as good odds as) the chance of losing money in Samuelson’s original 100-bet game.
