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How wealth dies

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Re: How wealth dies

#21

Post by disgruntledphd2 »

johnnyanmac wrote: post #16
cyberax wrote: post #8

> On this basis, global material prosperity has grown by 25% since 2004, which is nowhere near claimed “growth” of 96% in real GDP over that period. Moreover, the 25% rise in aggregate prosperity has been matched by the rise in population numbers over those twenty years. This assumes that the GDP growth and the material prosperity are in a simple linear relation. I don't think this makes sense. A small solar panel th…

It doesn't make sense. But that is exactly how policy makers justify how "the economy is doing good!" The GDP was never intended to be used as an indicator of national economic well being; only a simple statistic to measure how much money is exchanged between people. But it only takes a few examples counter to what a public service should do to show that GDP reliance creates anti-patterns. e.g. rising healthcare cost…

Yup. A substantial proportion of the difference in GDP between the EU and the US relates to how health care values are assigned. In the EU (for public healthcare), it's at cost while in the US it's the final transaction price. It would be interesting to deflate US GDP against the same metric used in the EU to get more accurate figures, but I've never seen such an analysis.

Re: How wealth dies

#22

Post by Etheryte »

The problems this article outlines are very real, but the explanation for the underlying mechanics doesn't really pass any kind of a sniff test for me. The central thesis is that real economic growth is stagnating because the overhead for producing energy grows with time. But this is not the case! Fossil fuels will run out eventually, yes, but nearly every other type of energy production does not suffer from this, and is in fact getting better over time. Solar panels of today are miles ahead of those of yesterday. Similarly we're building out more and more wind and thermal energy. Nuclear is also fine, if we don't account for the regulatory difficulty in actually getting new plants up and running.

Re: How wealth dies

#23

Post by disgruntledphd2 »

parliament32 wrote: post #7
0xWTF wrote: post #2

Ok, this seems like a good post. At the end of the day, what do I, as a single investor, do? I'm 50 years old, 2 kids in college, I have a $300,000 mortgage on a house presently worth $1M. I have $300,000 cash and an open eTrade account. What do I do with the cash? A) keep it as cash B) Pay off the mortgage C) Buy some QQQ D) Buy some T-notes E) there is no E. I am a simple man. Let's start with a simple solution.

Why is this hard? Calculate the expected value of each option, do a risk analysis, apply risk factor (based on your own tolerance), biggest number wins.

This comment has strong draw the rest of the owl vibes. (and the risk analysis & factor can cover a multitude of sins).

Re: How wealth dies

#24

Post by jopsen »

mkoubaa wrote: post #3

Posts like this make me want to hurry up and buy a farm

...yeah, there is always a post giving you that feeling..

Maybe, we should start with putting solar on the roof :)

Just because there is a risk of apocalypse, doesn't mean it's a good idea to try and time it.

Re: How wealth dies

#25

Post by dfabulich »

"Yet you don’t need SEEDS analysis to know that the British economy itself is at an advanced stage of disintegration."

"Put another way, very little of the world’s supposedly enormous wealth actually exists in any meaningful sense."

Citation overwhelmingly needed. His claim that the economy is disintegrating is supported by the argument that: "you know, just look around." But what we're looking around and seeing is wealth accumulating at the very top.

The mistake he's making is thinking that if most people aren't doing well, then nobody is doing well, that the 1% aren't even really rich because their wealth is all a fiction.

In fact, wealthy people are really, actually wealthy. They are unimaginably wealthy. It is literally beyond the author's imagination how wealthy they are, leading him to the truly absurd conclusion that they're not really even wealthy at all.

"Nobody could be that wealthy, could they?!" Yes, my dude. Yes, they actually can be that wealthy. Indeed, they actually are.

Re: How wealth dies

#26

Post by gen220 »

rout39574 wrote: post #12
mkoubaa wrote: post #3

Posts like this make me want to hurry up and buy a farm

Ahh, we can all buy the farm together. ;) I've been watching my investment accounts, particularly the TSLA fraction, and see-sawing between "This has got to collapse soon, I should..." and "You cannot time the market, idiot". I'm dissatisfied with the inaction, but I can't come up with a coherent theory about how I should act... Bleah.

Recognize that holding is an action and a choice, too.

If you don’t have a coherent theory to {act}ively hold an asset, you probably shouldn’t be acting to hold it, and be acting to sell it.

This is equally true for TSLA and NVDA as it is for VOO and BRK.

Why? Because when prices are too low you need to be able to hold (and ideally buy) with conviction and when prices are too high you need to be able to sell with conviction, although the latter is less important if you have steady income.

If you don’t have a theory of value, you’ll be able to do neither effectively, and risk loss of principal and opportunity in a downturn.

Re: How wealth dies

#27

Post by mwkaufma »

>> Rather, what we need to do is to calibrate the physical economy such that we can benchmark the monetary against the material. This enables us to avoid the futility of measuring the monetary only against itself.

Garden-variety Gold Standard quackery.

Re: How wealth dies

#28

Post by is_true »

drcode wrote: post #13
DaveZale wrote: post #4

Earlier quoted context omitted.

maybe learn about options. do some practice trading. Theory is one thing, patience and common sense are other things. Above all be very, very careful, but have fun. The practice part is important but when you are comfortable, nibble a little with small amounts.

Yeah, my rule when I got started was "If I ever lose a lifetime aggregated $3000 in the markets, then the markets are not for me". Then once you're ahead in the markets, it's fine to continue trading. (Note: I ended up breaking my rule by continuing to trade after losing $5000, but then did great in the markets anyway in the long run LOL)

Most of us lose more than that to inflation

Re: How wealth dies

#29

Post by hagbard_c »

mkoubaa wrote: post #3

Posts like this make me want to hurry up and buy a farm

Hurry, then, while your money is still worth something and there's farms to be had. I did and never looked back, no mortgage, no loans, no nothing. Use your money to become less dependent on future money. In the end it is independence which gives you security, not money in the market or on the bank.
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