Earlier quoted context omitted.
Nope, nope, nope that's not how statistics works. Median != Mean Also volatility matters, like a lot.
Median is obviously not mean. I never mentioned median anywhere. Where is the median of market return relevant here? Yes, volatility matters and is why people generally prefer to get the lower volatility average market return. But that’s not very relevant to many peoples claims on here that SP500 outperforms most capital, which is obviously incorrect.
TerraUSD crash led to vanished savings, shattered dreams
341–350 of 366 posts
Re: TerraUSD crash led to vanished savings, shattered dreams
#342Earlier quoted context omitted.
By definition, 50% of capital outperforms the SP500, which is an average. What the Buffett bet was all about is that you don’t know WHO will outperform, and with fees being a net-drag, a basket of hedge funds will on average underperform due to the average of them being, average, and then negative due to fees.
Nope, nope, nope that's not how statistics works. Median != Mean Also volatility matters, like a lot.
Re: TerraUSD crash led to vanished savings, shattered dreams
#343Earlier quoted context omitted.
Median is obviously not mean. I never mentioned median anywhere. Where is the median of market return relevant here? Yes, volatility matters and is why people generally prefer to get the lower volatility average market return. But that’s not very relevant to many peoples claims on here that SP500 outperforms most capital, which is obviously incorrect.
Not OP but I think the 50% of cases above or below only applies if you refer to the median ( https://en.wikipedia.org/wiki/Median ). If you refer to the average, or mean, the distribution could be different.
Re: TerraUSD crash led to vanished savings, shattered dreams
#344Earlier quoted context omitted.
Of course some do, but there are just as many (and a bit more) that under perform. The average performance relative to the index matters.
Yes, but that’s not what the comment I’m replying to said. There seems to be some pervasive belief that absolutely no one ever beats the S&P500 index in the long run, which is obviously nonsense.
Re: TerraUSD crash led to vanished savings, shattered dreams
#345Earlier quoted context omitted.
Not OP but I think the 50% of cases above or below only applies if you refer to the median ( https://en.wikipedia.org/wiki/Median ). If you refer to the average, or mean, the distribution could be different.
But I’ve never mentioned median. I’m stating that by definition, 50% of $ outperforms SP500. Sure that could be skewed, with a median underperforming, where in the extreme 1 participant has $20T outperforming and the other 1,000 collectively have $20T underperforming. But on average your $ has a 50/50 chance of under or over performing total market (and thus basically SP500) by throwing darts at a board.
In the case you mentioned, with an average, there might be extreme outliers that make the average different from the median, thus rendering the assertion that 50% of the cases are above the average and 50% under false.
Re: TerraUSD crash led to vanished savings, shattered dreams
#346Earlier quoted context omitted.
Not OP but I think the 50% of cases above or below only applies if you refer to the median ( https://en.wikipedia.org/wiki/Median ). If you refer to the average, or mean, the distribution could be different.
But I’ve never mentioned median. I’m stating that by definition, 50% of $ outperforms SP500. Sure that could be skewed, with a median underperforming, where in the extreme 1 participant has $20T outperforming and the other 1,000 collectively have $20T underperforming. But on average your $ has a 50/50 chance of under or over performing total market (and thus basically SP500) by throwing darts at a board.
Re: TerraUSD crash led to vanished savings, shattered dreams
#347Earlier quoted context omitted.
But I’ve never mentioned median. I’m stating that by definition, 50% of $ outperforms SP500. Sure that could be skewed, with a median underperforming, where in the extreme 1 participant has $20T outperforming and the other 1,000 collectively have $20T underperforming. But on average your $ has a 50/50 chance of under or over performing total market (and thus basically SP500) by throwing darts at a board.
But you mentioned average (mean). You can have the same average but different median, and only if you would talk about median it would be guaranteed that 50% of the cases are above and 50% under. In the case you mentioned, with an average, there might be extreme outliers that make the average different from the median, thus rendering the assertion that 50% of the cases are above the average and 50% under false.
Re: TerraUSD crash led to vanished savings, shattered dreams
#348Earlier quoted context omitted.
Concise and well said. Only one thing to add, war time booms are a bit of a myth. For example, where was the post Iraq War boom? It is a real thing. You have to blow up your industrial competitors to achieve a worthwhile and meaningful postwar boom. The difference today is that even if we blew up China, companies still wouldn’t invest here. They just go to India or Vietnam. We do need more unions in this country. Bec…
> where was the post Iraq War boom? Indeed. I wartime booms are a thing of the past. I guess the reason is that mobilizations are smaller as a function of the total economy and/or the economy is a permanent wartime economy given that the USA is almost always at war somewhere. > We do need more unions in this country Agreed, but I don't think that would allow us to repeat the gains of the last century. Capital make bi…
Agreed. Partially due to increased globalization. We've been globalized since colonial times, but instant communication was the real game-changer. There's no turning back now. No matter how many populist movements rise up around the world as a last gasp against it. It's hard work to achieve collective bargaining, easy to overthrow a government in a coup. People are clearly choosing the latter in the USA, but they won't like the loss of democratic freedom in the end.
What unions in the US can achieve is dignity for workers. They won't get the share of wealth they once had, but they can be treated with more respect, more time off to enjoy themselves and their family and friends. Essentially we could achieve a western European quality of life, at best.
There's nothing wrong with that. The way people live over there with less income, but overall better quality of life is the best-case scenario for the US going forward. While they have some serious security risks, I'm envious that they have already sorted these things out while the US still has struggle ahead economic side. And we may fail, and simply become another Brazil, rather than like Germany. I think Rio de Janeiro style slums are more likely in our future, rather than Berlin. Our people and leaders just don't have the culture and stick-to-it to achieve that reality, in my opinion.
The working class here is too easily divided by the asset holding class. Just tell them unions are bad, or focus on minority issues, whether it be LGBTQ or racial minority strife and you have a distraction for 1 to 3 generations' lifespans. Right now, given the lack of focus on the working class and corporate focus on general social justice issues, we're kissing away the next 100 years that need to be put towards all working class people. Money and job security are what people need, no matter who you are.
I don't see a true working class revolution begin in the US until 2060 or so. It may take all the way out to 2100. There's just too many people that would otherwise be working on this, that are extremely focused on gender and racial studies. No money is going to come out of that for anyone. Corporations and the capitalist class know it.
You'll know you have achieved enlightened corporations when they are publicly promoting collective bargaining. They're flying rainbows instead, keeping the money, and everyone on both sides is feeling good.
While that's a pessimistic take, the good news is that the propaganda that unions drove out US enterprise is demonstrably false. That has been revealed to have been a total scam and I think everyone sees it at this point. You lose nothing at all when you have collective bargaining rights, it's all upside. As long as the business is solvent, the boss may be angry at merely one Lamborghini rather than five though. Or just wealth for him to retire at 45, rather than generational wealth for the next 3 generations being available.
Worker-owned enterprise also needs to happen. There's just no rational reason why for proven business models, like 7-Eleven out of Japan, needs to run half of our convenience stores when those could be owned and operated by the employees. With better pay and customer service as a result. I'm fine with venture capital and risk-reward for unproven business models, but many of these large corporations are parasites like 7-Eleven. We have to kick these corporations out and retake our local economy. No reason to allow them to have end-to-end control all the way, and it will encourage some local suppliers to pop up as fellow cooperatives see eye to eye and work together.
Re: TerraUSD crash led to vanished savings, shattered dreams
#349I occasionally get asked by relatives and friends of what to invest in. Now I'm no expert but I guess in the valley of the blind the one-eyed man is king. Thing is what I tell them seems to bore them because, well, it's boring. My advice is basically this: Put your money in a broad index fund and don't look at it for 10 years. In giving this advice you start to realize it's not what people want to hear. It's not that…
>Put your money in a broad index fund and don't look at it for 10 years. That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a miraculous economic cure: slowly print money and throw it into the economy, so people keep transacting with each other, and the GDP (and stocks) keep growing. Turns out, most of this growth was on paper - fads, speculative investments, overvalued stocks. Now that t…
Slightly different perspective here - there is an abundance of debt that spends like dollars. Government debt and some pension debt is nearly unserviceable in some States and countries, so there will be a dollar short squeeze in attempt to get dollars to pay the debt. Yep, seems counter-intuitive at first glance that the USD short squeeze will increase the dollar appetite.
Re: TerraUSD crash led to vanished savings, shattered dreams
#350Earlier quoted context omitted.
I've literally never heard of anyone referring to index funds that way. You're not making any sense at all.
I assume when people say savings they mean investments. Because it would be stupid not to invest a large cash position.