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Save like a pessimist, invest like an optimist

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Re: Save like a pessimist, invest like an optimist

#121

Post by xmprt »

paulryanrogers wrote: post #105
fennecfoxen wrote: post #100

Earlier quoted context omitted.

> At some point the exponential curve has to go S-shaped. In principle yes, of course. In practice, you are imagining a world in which we never expand our civilization into space and across the galaxy, because otherwise you would be looking at the S curve and thinking "wow, this thing has only just gotten started" and marveling at what lies ahead.

Our space-ward expansion has some hard physics limits. And we've not yet eclipsed what was already done decades ago. And even settling Mars will require more sustainable lifestyles than most first world citizens now enjoy.

We're talking about hundreds and thousands of years though. A few hundred years ago, the mere thought of airplanes and cell phones would be considered witchcraft. I don't think it's a long shot to be reasonably optimistic about where humanity can get in terms of technology.

Re: Save like a pessimist, invest like an optimist

#122

Post by el_nahual »

skybrian wrote: post #101
el_nahual wrote: post #87

I'm a foreigner that's lived in the US since college. Half of my friends and family are american and the rest foreign. There's a huge cultural difference between both sides' approach to wealth. My american f&f (outside of silicon valley) think of wealth in terms of "saving for retirement." 401ks, tax strategies, etfs, stocks etc. It's very passive, probably "correct", and very unambitious. The foreign side is totally…

Interesting. In what countries would you say that being a boss is a common ambition, and what kinds of businesses do you mean?

In my experience, this is true in all of LatAm.

Re: Save like a pessimist, invest like an optimist

#123

Post by count »

paulryanrogers wrote: post #105
fennecfoxen wrote: post #100

Earlier quoted context omitted.

> At some point the exponential curve has to go S-shaped. In principle yes, of course. In practice, you are imagining a world in which we never expand our civilization into space and across the galaxy, because otherwise you would be looking at the S curve and thinking "wow, this thing has only just gotten started" and marveling at what lies ahead.

Our space-ward expansion has some hard physics limits. And we've not yet eclipsed what was already done decades ago. And even settling Mars will require more sustainable lifestyles than most first world citizens now enjoy.

European global expansion also had hard physics limits. The age of sail grew the global GDP tremendously. I wouldn't discount multi-year asteroid mining trips/etc. from having the same impact in 50-100 years.

Re: Save like a pessimist, invest like an optimist

#124

Post by el_nahual »

darkerside wrote: post #109
el_nahual wrote: post #87

I'm a foreigner that's lived in the US since college. Half of my friends and family are american and the rest foreign. There's a huge cultural difference between both sides' approach to wealth. My american f&f (outside of silicon valley) think of wealth in terms of "saving for retirement." 401ks, tax strategies, etfs, stocks etc. It's very passive, probably "correct", and very unambitious. The foreign side is totally…

> The owner of a business with 200k in revenue is higher status than a McKinsey employee with a 500k salary. What makes you say that?

Status is weird like that. Different cultures assign status differently. In many parts of the world--certainly in LatAm--status is about power and independence more than it is about money.

Re: Save like a pessimist, invest like an optimist

#125

Post by sanderjd »

Moodles wrote: post #99
sanderjd wrote: post #66

Earlier quoted context omitted.

Why does that seem very unlikely? It seems to me that the right way to think about that is that the likelihood is simply unknowable either way.

It seems very unlikely since there's 200 years of data to show that was the biggest crash ever. So a crash twice that size is very unlikely. You could do the math to calculate the exact probability given the sample size of stock market years.

But ... that 200 years of data has nothing to do with what is going to happen in the future...

Re: Save like a pessimist, invest like an optimist

#126

Post by paulpauper »

xchaotic wrote: post #113
paulpauper wrote: post #90

Earlier quoted context omitted.

path dependency is the main problem with margin trading. S^P 500 fell 60% in 2007-2008. So that should give you an idea of how much of a cushion you need to give yourself for the worse case scenario.

If this is just retirement money, so what? It rebounded pretty well since.

if you have have 100% margin and the market falls 50%, the broker will close out all your positions at a large loss to protect its own assets (often well before the 50% target), at which point it will not matter how much the market rebounds after that

Re: Save like a pessimist, invest like an optimist

#127

Post by sanderjd »

roenxi wrote: post #115
sanderjd wrote: post #62

I'm totally philosophically aligned with this article and enjoyed reading it, but I'm just interested to hear whether anyone else has this problem: More and more stuff I read seems to be name-droppy like this. For instance, I've been reading "The Psychology of Money" recently, and I'm enjoying it, but its style is a lot like this article; an endless series of anecdotes about famous and semi-famous people, with insigh…

> Is this a new trend of some kind, or has it just become more obvious to me lately? It is a classic trend. Anyone writing a book or trying to reach a wide audience has to cater for the fact that the audience has none of the skills required to assess complex claims. Most of the readers aren't going to be good at maths, are not going to have a grasp on the nuances of human behaviour and incentives, struggle with scien…

Interesting insight!

Re: Save like a pessimist, invest like an optimist

#128

Post by Moodles »

sokoloff wrote: post #103
Moodles wrote: post #93

Earlier quoted context omitted.

I mean honestly, using a credit card for a month before interest hits is usually fine too? My credit limit is like 50k or something ridiculous across all my cards. Not to mention when all in on stocks you can sell for better long-term capital gains tax treatment or even tax loss harvest losses too, which you can't do with a savings account. And ETFs are actually pretty liquid: I can sell and withdraw in a few days if…

Yes, but then you need cash to pay off the credit card, which is cheaper to pull from your margin available than to let the credit card charge you interest.

I'm not suggesting to pay credit card interest. I'm saying you can cover any emergency expense with a credit card which buys you a month, and then you might have ordinary salary or time to sell your stocks before interest is due.

No offense but I'm pretty surprised you commented what you did. Literally my first sentence says "... before interest hits...".

Re: Save like a pessimist, invest like an optimist

#129

Post by Moodles »

sanderjd wrote: post #125
Moodles wrote: post #99

Earlier quoted context omitted.

It seems very unlikely since there's 200 years of data to show that was the biggest crash ever. So a crash twice that size is very unlikely. You could do the math to calculate the exact probability given the sample size of stock market years.

But ... that 200 years of data has nothing to do with what is going to happen in the future...

Not nothing.

Re: Save like a pessimist, invest like an optimist

#130

Post by sokoloff »

Moodles wrote: post #128
sokoloff wrote: post #103

Earlier quoted context omitted.

Yes, but then you need cash to pay off the credit card, which is cheaper to pull from your margin available than to let the credit card charge you interest.

I'm not suggesting to pay credit card interest. I'm saying you can cover any emergency expense with a credit card which buys you a month, and then you might have ordinary salary or time to sell your stocks before interest is due. No offense but I'm pretty surprised you commented what you did. Literally my first sentence says "... before interest hits...".

I’m perhaps equally surprised that you’d consider anything an emergency that would covered by your ordinary salary within a month’s time. I mean, that’s just normal credit card use, right?
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