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Experts from a world that no longer exists

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Re: Experts from a world that no longer exists

#121

Post by zackmorris »

pfdietz wrote: post #117
zackmorris wrote: post #106

It's weird reading this as someone who identifies strongly as Gen X, witnessing how we can't seem to address existential threats like global climate change until the Boomers retire. Or a thousand other problems. I've spent the last 20+ years under a near-constant form of gaslighting where everybody told me my ideas would never work. Having to watch time and again as a different version of me wins the internet lottery…

Milton Friedman was a supporter of taxes on pollutants. He recognized that negative externalities are a case where government intervention is needed, and thought Pigovian taxes were the best way for government to do that. Were he alive today he'd be advocating carbon taxes.

Interesting, I didn't know that. Most of the clips I see of him online show him berating young people who aren't wrong IMHO.

A bit serendipitous, but his name popped up just now when I was searching for an article about regulation to make companies responsible for their own externalities:

https://www.bloomberg.com/opinion/articles/2021-10-29/cop26-...

Big investors really do think of themselves as universal investors

The typical attitude is: “If we’re a big investor, we’re universal investors. We can’t say we’re going to divest fossil fuels companies; we have to stay invested.” Other companies in the portfolio will continue to use carbon. At the same time, a universal investor needs to look after the wellbeing of its clients. That means making sure they have a healthy climate to breathe when they retire, and not just that they have an adequate cash flow.

Put differently, the report says they believe that they “own” the negative externalities caused by the companies in their portfolio “due to the sheer depth and breadth of their holdings in all asset classes and regions.” As far as they are concerned: “Such ‘paper’ holdings do not negate their fiduciary responsibility to wider society.” This is a long way from the “shareholder value” philosophy associated with Milton Friedman that held sway for decades.

Right now I put the responsibility for environmental collapse squarely on the shoulders of corporations, their shareholders and fundamentally consumers who (due to tragedy of the commons) frankly don't know how to begin to be sustainable when it takes everything they got to make it in today's world.

To say that another way, I don't think that Friedman's views are fundamentally incorrect, I just think that they put attention in the wrong places. For example, capitalism is just economic evolution. It doesn't need to be defended as some alternative to social democracy. Capitalism isn't going anywhere, but it can be constrained by human will so that it doesn't make us slaves to it, toiling in the workaday world every day until we die as the earth burns around us.

Re: Experts from a world that no longer exists

#123

Post by nly »

pezzana wrote: post #116

> “Don’t buy stocks when the P/E ratio is over 20” was a good lesson to learn from the 1970s when interest rates were 7%, the Fed hadn’t yet learned what it’s capable of, and most businesses were cyclical manufacturing companies vs. asset-light digital services. Is it relevant today? At a broad, philosophical level, yes. In practical terms, probably not. In the same sense, buying stocks at all seemed like nothing but…

The problem is we're all now dependent on stock market performance to make retirement feasible. Employer guaranteed defined-benefit pension schemes are dead.

My uncles pension scheme was structured to pay out 1.5% of his final salary, inflation adjusted for the rest of his life, for each year he'd worked. He worked at one company his whole career, from age 18 to age 55, when he retired. Factoring in his mortgage, which he paid off prior to retirement, his disposable income never even dropped when he retired.

Exact figures don't matter too much, but to achieve that with a defined-contribution pension you need to invest something in the range of 15%+ of your gross salary for 30 years and achieve a 7% above-inflation annualized investment return. And it won't be final salary but career average.

Most people aren't doing this so are fucked

Re: Experts from a world that no longer exists

#124

Post by Mc91 »

pezzana wrote: post #116

> “Don’t buy stocks when the P/E ratio is over 20” was a good lesson to learn from the 1970s when interest rates were 7%, the Fed hadn’t yet learned what it’s capable of, and most businesses were cyclical manufacturing companies vs. asset-light digital services. Is it relevant today? At a broad, philosophical level, yes. In practical terms, probably not. In the same sense, buying stocks at all seemed like nothing but…

Yes. The current p/e ratio of the S&P 500 is 29.59. Prior to November 1998 it never hit that high in the prior century. So what has the S&P 500 history been since then?

It kept climbing from November 1998 until the dot-com crash started in spring 2000. By Jan 2003 it hit 29.59 on the way down and went down to 17.46 in April 2007.

Then the subprime boom started really going and it climbed to 27.58 by July 2008, hitting 122.39 in May 2009. By October 2009 it was back down to 20.33 and by September 2011 it was down to 13.01.

Then it started its climb again. It was at 22.04 October 2019, before they were talking about Covid even in Wuhan. It hit 39.26 in December 2020 and is now back down to 29.59.

As the poster says, in 1999 and 2000 and in 2007 and 2008 we were hearing about how we were in a new paradigm unmoored from the old reality and so forth. At the end of the day, the economy always came crashing back to earth. In October 1999, the book Dow 36,000 was published echoing a lot of this sentiment. The Dow was 10336 the day before the book came out, then it went down to 7591 by September 2002. In February 2009 it was at 7062. We just finally hit 36,000 DJIA this month (before going down again).

Re: Experts from a world that no longer exists

#126

Post by Vetch »

dsizzle wrote: post #88

This seems to assume that experts' advice can only be valued (or not) as an appeal to authority. But that would ignore that experts can also provide _explanations_: "This won't work because this subsystem would violate the laws of physics" e.g. -- and that explanation might then spur someone to find an equivalent subsystem without that flaw, or perhaps one would find a flaw in the initial reasoning, or whatever. Simi…

I came here to write something similar: the article does not pay enough attention to changing environments. The dotcom bubble ideas that are now successful do not share the same background environment of internet availability, bandwidth, networks of datacenters, storage, powerful portable computers, and all around higher digital literacy and people used to interacting with computers. If these things hadn't changed then trying and trying again would have continued to fail with high probability.

As written, the statement by Ford is wrong, it is important to keep a kind of Tabu list detailing what didn't work in the absence of gradient information. What experts get wrong is they fail to be sensitive to dependent parameters that are not static (I know the article says something like this too but it sort of glosses over it). The problem is many of these are hard to say outside of hindsight.

Perhaps listing the requirements before launching and listing the state of those requirements after failure, in addition to the idea might form a basis for what to retry. An expert might say something like "A website for dog food and toys will never work, we already did that 20 years ago and it failed spectacularly", when they should be saying "A Website for dog food did not work 20 years ago, here were our requirements and environment, has anything changed?". But even that isn't perfect so the process can't be deterministic.

Re: Experts from a world that no longer exists

#127

Post by toss1 »

msla wrote: post #100
sidlls wrote: post #96

Earlier quoted context omitted.

I don't see how doubling down on the ageism brings anything to the discussion. Old people aren't "only...willing to see what was there decades ago."

I didn't imply they were. You're seeing insults I never made.

Or, you are not seeing insults you did make (however un-/sub-consciously / unintentionally)

Re: Experts from a world that no longer exists

#128

Post by AnimalMuppet »

ericjang wrote: post #85
AnimalMuppet wrote: post #80

Earlier quoted context omitted.

From the book of Proverbs (in the Bible): "The wise man gets a lot of advice" (paraphrased). One chapter later: "The fool listens to most of it" (also paraphrased). If you don't have the time to sort it all out, don't listen to all the viewpoints. Society, collectively, is insane - it believes so many contradictory things that could not all possibly be true. You can't listen to society or "they say" as a guide. You'l…

You don't believe in the "wisdom of the crowds" ?

Here is a set of people. On a given subject, the median position is likely to be at least reasonable. That's the "wisdom of the crowds".

Here is a set of experts. Within the area of their expertise, the median position is probably pretty close to right. The intersection of their views are almost certainly right (though it may be the empty set).

But what you can't do is take the union of the views of a set of people, and expect anything except a bizarre jumble of self-contradiction. And that's what the media gives us. (In fact, the media gives us the union, with extra emphasis added to the outliers, because those are "more interesting" and therefore attract more eyeballs.)

Wisdom of the crowds? Maybe. Wisdom of the media coverage of the crowds? No way.

Re: Experts from a world that no longer exists

#129

Post by kristjansson »

nly wrote: post #123
pezzana wrote: post #116

> “Don’t buy stocks when the P/E ratio is over 20” was a good lesson to learn from the 1970s when interest rates were 7%, the Fed hadn’t yet learned what it’s capable of, and most businesses were cyclical manufacturing companies vs. asset-light digital services. Is it relevant today? At a broad, philosophical level, yes. In practical terms, probably not. In the same sense, buying stocks at all seemed like nothing but…

The problem is we're all now dependent on stock market performance to make retirement feasible. Employer guaranteed defined-benefit pension schemes are dead. My uncles pension scheme was structured to pay out 1.5% of his final salary, inflation adjusted for the rest of his life, for each year he'd worked. He worked at one company his whole career, from age 18 to age 55, when he retired. Factoring in his mortgage, whi…

One wonders about the actuarial assumptions made by your uncle’s former employer and how, or if, they expected to meet that obligation.

Re: Experts from a world that no longer exists

#130

Post by ghaff »

nly wrote: post #123
pezzana wrote: post #116

> “Don’t buy stocks when the P/E ratio is over 20” was a good lesson to learn from the 1970s when interest rates were 7%, the Fed hadn’t yet learned what it’s capable of, and most businesses were cyclical manufacturing companies vs. asset-light digital services. Is it relevant today? At a broad, philosophical level, yes. In practical terms, probably not. In the same sense, buying stocks at all seemed like nothing but…

The problem is we're all now dependent on stock market performance to make retirement feasible. Employer guaranteed defined-benefit pension schemes are dead. My uncles pension scheme was structured to pay out 1.5% of his final salary, inflation adjusted for the rest of his life, for each year he'd worked. He worked at one company his whole career, from age 18 to age 55, when he retired. Factoring in his mortgage, whi…

>He worked at one company his whole career,

Which was one of the issues with defined benefit plans. They were structured around long employee tenure. Move around every few years and you basically got no pension most of the time.

I personally think it's unfortunate that most people won't have defined benefit plans any longer. (I'm glad I'll have one from a long-ago 10+ year job whenever I decide to start collecting.) But it's hard to get away from the tenure requirements unless you make the system portable and then you're basically creating a shadow social security system.

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