The economy is just a mechanism to have a predictable environment in which to raise children.
In that case it's an exceptionally bad one.
Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
11–20 of 163 posts
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#12This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…
right, lots of fund managers accept that crashes happen periodically...the permabears like Hussman assume they STAY low over a long period of time yet society retains enough order to let them fulfill their thesis
if the market crashed that low for a decade, you would see massive regime change in every democratic nation and the rich would be stripped bare
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#13This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…
This company has ~$750mm under management, and has several funds that manage to have both a) high expense ratios and b) horrible performance over the short and long terms.
Serious question, for those who work in finance: how do companies like this stay in business? Shouldn't the transparency of their poor performance have long since driven them out of business?
Semi-serious question, also for those who work in finance: what are the barriers to entry to starting funds for those of us who could do better than this guy?
Edit: I'm also stunned that anyone running any kind of "growth" fund could manage to lose money the last few years.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#14Understanding Bitcoin is hard. Here is a response to some of the criticism:
> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted.
This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/
> The system already features a rather steep cost per transaction, and hardly any of those transactions are for the purchase of goods and services
Second-layer scaling allows an arbitrary number of off-chain transactions based for a single on-chain transaction. See https://lightning.network
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#15The economy is just a mechanism to have a predictable environment in which to raise children.
The most striking moment to me in my IPE class was when the professor, after we'd covered how governments and, in democracies (by proxy), We the People, bring modern economies into being and choose, to some degree (other governments and a variety of natural factors have more than a little say), the shape they'll take, innocently asked, "so, why have an economy?"
Yours is a better answer than what any of us came up with at the time.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#16This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…
right, lots of fund managers accept that crashes happen periodically...the permabears like Hussman assume they STAY low over a long period of time yet society retains enough order to let them fulfill their thesis if the market crashed that low for a decade, you would see massive regime change in every democratic nation and the rich would be stripped bare
actually, the corporate nanny state will just bail them out. See: Long Term Captial Management, S&L crisis/Continental Illinois under Reagan/Bush Sr, 2008 crisis
They have an implicit subsidy, Too Big To Fail: access to cheap credit because creditors know the nanny state will bail them out.
Why don't we call it welfare when we give money to the rich? Capitalism for the poor, socialism for the rich. We don't need market discipline, but YOU do
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#17This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…
This company has ~$750mm under management, and has several funds that manage to have both a) high expense ratios and b) horrible performance over the short and long terms. Serious question, for those who work in finance: how do companies like this stay in business? Shouldn't the transparency of their poor performance have long since driven them out of business? Semi-serious question, also for those who work in financ…
He may have raised funds 20 years ago and over 20 years delivered good returns. Also, underperforming S&P is not necessarily the right metric - as part of an overall portfolio that includes S&P, his funds may provide diversification benefits.
To answer the question as to why can't random joe raise that money - the answer is, raising money is harder than you think.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#18Lots of permabears will go long when it's obvious markets are headed up, not Hussman. https://www.hussmanfunds.com/strategic-growth-fund/ As always, Hussman manages the near impossible feat of reliably losing money in virtually any market environment The Dow has risen 5k in a year and Hussman still manages to be in the red....I'm sure his clients are thrilled on top of the how-is-that-possible string of losses in eve…
It’s a canary in the coal mine IMO. Sure, he’s early; but he’s not wrong. A very significant portion of growth over the last decade has been the growing ability of US companies to avoid paying US taxes. That growth eventually caps out until you reach a 0% corporate tax rate — the problem here is that shifts the tax burden 100% onto the populace, which absolutely destroys consumer spending and ultimately the economy a…
sorry but the only answer any investor should care about is achieving their financial goals over the expected investment timeframe.
markets tend to rise and as a result market declines tend to be temporary
the permabear thesis appeared in the early 80s when the US was in a rut and we also became a debtor nation. the permabear thesis -that debt and fiat currency would produce an economy favoring the pessimistic (but not completely imploding to the point of collapse, because you can't invest in that), proved to be wrong over a thirty year window
if you have an axe to grind, you will always find a permabear manager willing to tell you tales of doom...it will cost you your financial goals though
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#19I find myself in agreement with most of the author's statements, especially regarding bitcoin and paper wealth.
I also like the following statement -- "If our policy makers are interested in boosting long-term structural U.S. GDP growth, they should be providing direct and targeted tax incentives for real investment, education, research & development, and other factors that could, over time, increase our nation’s productive capacity."
Too bad our political system no longer has that capability, if it ever did. It seems tax incentives find their way to the most powerful factions instead of the most productive ends.
Real Investment - too many parasitic factors. Education - too many parasitic factors. R&D - too many parasitic factors.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#20Lots of permabears will go long when it's obvious markets are headed up, not Hussman. https://www.hussmanfunds.com/strategic-growth-fund/ As always, Hussman manages the near impossible feat of reliably losing money in virtually any market environment The Dow has risen 5k in a year and Hussman still manages to be in the red....I'm sure his clients are thrilled on top of the how-is-that-possible string of losses in eve…
That's what the British thought about the East India Company. Then what happened?