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Show HN: Inflation-adjusted stock charts – Total Real Returns

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Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#261

Post by tastyfreeze »

mywittyname wrote: post #166
smallerfish wrote: post #102

Earlier quoted context omitted.

Don't buy a house until the real estate market crashes. Then buy. I bought a fixer-upper in 2008 for 200k; sold it for 425k 5 years later. Recently it sold for 650k (we still get redfin notifications.) In the meantime I bought a house for 625k (nice house with some rough edges) and sold it 18 months ago in covid real estate madness for 950k. We certainly put money into both houses over time, but we'd never have been…

> Wait a year or two. The Great Financial Crisis will be the only event of this nature in our lifetimes. The country would need to overbuild like crazy to cause housing to crash like that again. Everyone is expecting housing prices to fall in "a year or two." I've been hearing this for two years now. The market has a habit of doing the opposite of what people expect it to.

As cheap debt dries up there are less people that are able to pay the high price for a house. If the Fed keeps raising the federal funds rate it is a near certainty that home prices are going to fall, on average, due to lack of buyers.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#262

Post by FooBarWidget »

epups wrote: post #252
FooBarWidget wrote: post #234

Earlier quoted context omitted.

In the Netherlands, there are no places where rents are below mortgages. Unless you apply for social housing, but that requires you to be below a certain income threshold, which means that you couldn't have bought a house anyway. Social housing also have 20 years waiting list.

That sounds really weird. In Germany an apartment that rents for about €1000 would sell for €400,000 or so, which means a mortgage would cost 2 to 3 times more (with a 20% down-payment). This is with a 2% interest rate. How does the math work in the Netherlands?

An apartment that's worth about €400,000 rents for about €1,550. The equivalent mortgage with 3.85% interest is €1875, but becomes about €1426 after tax breaks. The 10% down payment can and often is financed too. This leaves about €10,000 of notary fees and taxes that you have to pay yourself.

Interest rates used to be lower so the mortgage used to be much cheaper.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#263

Post by TameAntelope »

skinnymuch wrote: post #260
TameAntelope wrote: post #256

Earlier quoted context omitted.

Who said anything about blind or tradition? That seems like stuff you injected into this convo, not me. I trust institutions who have a strong track record of predictiveness and desirable outcomes. Vanguard has both in spades, and has earned their authority. If they stop accurately predicting future behavior and/or stop producing desirable outcomes, that will change their authority on matters of investing. Not trusti…

Your previous comment was about both. Saying that’s how all education works.

No, "education" as a concept does not mean either of those things.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#264

Post by mistrial9 »

arminiusreturns wrote: post #212
danans wrote: post #187

Earlier quoted context omitted.

> This is only to show that modern investment practices bear strong elements of ritualistic faith. Conversely, ritualistic faith has a long history of financial investing, evidenced by its tendency to procure very high value real estate for itself with the funds of it's adherents. Also, the cathedrals of Europe are glistening with the golden dividends that accrued from religious investment in the conquest of the Amer…

Further, it seems religion may have developed as a part of the need to keep track of resources in ancient Sumeria. My impression is that the studies said something along the lines of by establishing a priest class wich survives on tithes but also function as clerks/scribes that society enters a new new level of economic development.

further casual broad-brush explanations of religion then, gotcha

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#265

Post by icu »

imtringued wrote: post #196
icu wrote: post #195

So you used CPI as your inflation measure? I personally don't think CPI or RPI is a good inflation yardstick, because the calculations change over time. For consistency I would suggest you try Shadow Stats or the year on year growth of the M2 money supply.

Shadowstats doesn't know how exponential growth works. The people who believe in shadowstats don't understand it either.

I'm not sure I see the link between understanding exponential growth and Shadow Stats? Shadow Stats holds the CPI definition constant over the time period, whereas Uncle Sam jukes the CPI however way he's feeling for "reasons". The reason why I suggested Shadow Stats was that it seems like compumike is trying to show the change in purchasing power over time with https://totalrealreturns.com/.

It's a fantastic idea trying to make the concept of the time value of money, and purchasing power more accessable to the masses. It probably took a lot of work and I appreciate the effort. Imho the correct way to do this is to hold as many variables constant over the timeseries.

My point is that since official CPI isn't constant, and imho a bad measure of inflation anyway, using M2 or Shadow Stats woudl be the better way to go.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#266

Post by mywittyname »

tastyfreeze wrote: post #261
mywittyname wrote: post #166

Earlier quoted context omitted.

> Wait a year or two. The Great Financial Crisis will be the only event of this nature in our lifetimes. The country would need to overbuild like crazy to cause housing to crash like that again. Everyone is expecting housing prices to fall in "a year or two." I've been hearing this for two years now. The market has a habit of doing the opposite of what people expect it to.

As cheap debt dries up there are less people that are able to pay the high price for a house. If the Fed keeps raising the federal funds rate it is a near certainty that home prices are going to fall, on average, due to lack of buyers.

There's too much demand for housing for this to happen. Worst case, they go down 5-10% in the hardest hit areas, but most places are going to see low or no growth even if rates hit 7%.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#267

Post by someguydave »

whatshisface wrote: post #220
someguydave wrote: post #194

Earlier quoted context omitted.

People are willing to pay fewer dollars for each asset class.

People can't be willing to pay fewer dollars for the third asset class, which is dollars.

you absolutely can pay fewer dollars for dollars delivered at some point in the future

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#268

Post by sytelus »

withinboredom wrote: post #242
sytelus wrote: post #216

Earlier quoted context omitted.

You might be even more heartened to know that one of the top most and highly respected computer scientist, Donald Knuth, is ardently religious. The contrast between his works that is extraordinarily precisely well reasoned after decades of thinking and his complete submission to ancient religion where logical reasoning is not all that welcome, is absolutely a thing to behold. It makes me marvel at complexity and perh…

Is it really all that surprising? I’m a fairly spiritual person, and work with logic and reasoning every day. I like to think about this kind of stuff for fun and one of my answers to this is that if you like fiction, you are able to suspend disbelief at will (whether aware of it or not). I think faith requires disbelief and trust to work. Without disbelief, you will question, and without trust, you’ll undermine.

Spirituality is not same as ardently following very specific religious practices. I believe everyone is spiritual in some way. I also don’t think we suspend disbelief when reading/watching work of fiction. We accept that to be fake but we are curious about what-if scenarios and it’s merely learning and/or entertain. This is not same as reading religious texts were you do not accept it to be fake and questioning is feared for.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#269

Post by sytelus »

shepherdjerred wrote: post #227
sytelus wrote: post #216

Earlier quoted context omitted.

You might be even more heartened to know that one of the top most and highly respected computer scientist, Donald Knuth, is ardently religious. The contrast between his works that is extraordinarily precisely well reasoned after decades of thinking and his complete submission to ancient religion where logical reasoning is not all that welcome, is absolutely a thing to behold. It makes me marvel at complexity and perh…

> ancient religion where logical reasoning is not all that welcome If something gives you purpose and makes you happy isn't the most rational thing to do to follow that thing, even if the thing itself isn't logical?

Yes, I myself have done a lot of things that have no logical reasoning but gave life a purpose, or at least it seemed to. That was my “religion”. I really cannot say I am opposed anyone else’s religion. The big issue is that many religious people want everyone else to follow their religion and any refusal or reluctance means target on your back. This is why religions get bad name and produce negative impact on society, for example attempts to squash scientific progress in medieval dark times or formulating laws based on one religion to a force on to everyone else or forcing religious education on all children and actively preventing them from learning scientific concepts like evolution etc. Not everyone does this and in fact most religious people I know are very private about that aspect of their lives.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#270

Post by tangjurine »

WalterBright wrote: post #236
jl2718 wrote: post #127

This period has been very special because of the 401k, which is itself part of the growth story of the corporate legal structure. I think this is coming to an end. Corporate boards and officers no longer represent the best long-term interests of the companies and shareholders they represent. It’s also a very precarious legal status as an arbitrary judicial ruling can make or break a company. Finally, and perhaps most…

> cash flows from working class into the stock market will eventually hit equilibrium with capital extraction from the owner class What? The working class becomes owners when they buy shares.

The working class become owners when they buy enough shares that the dividends or expected growth from those shares are equal to their expenses.

"And according to data from the 2019 Survey of Consumer Finances by the US Federal Reserve, the most recent year for which they polled participants, Americans have a weighted average savings account balance of $41,600 which includes checking, savings, money market and prepaid debit cards, while the median was only $5,300. "

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