Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Stock market charts you never saw (2021)

papers.ssrn.com

Post reply on HN
Print view View original

31–40 of 282 posts

Re: Stock market charts you never saw (2021)

#31

Post by bobleeswagger »

quickthrowman wrote: post #17
jldugger wrote: post #13

Earlier quoted context omitted.

10x matters quite a bit in generational wealth terms. If every generation doubles the number of plausible claimants to the wealth, thats about what is needed to balance out. On the other hand: > If I was alive in 1922 and stashed away $8 million in cash it would only be worth about $140 million today. Why would it not be worth $8 million?

It should read “If I was alive in 1923 and invested $8M in 100y bonds that return the exact rate of inflation , I’d have $140M today” Plugging it into a USD inflation calculator checks out.

$8 million in cash will always be $8 million in cash. "Stashed it away" is pretty vague but cash is cash.

Re: Stock market charts you never saw (2021)

#32

Post by mooreds »

You'll want to download the PDF and then scroll to page 43 to see the charts. The previous pages are about methodology, I think, I scrolled past them to see the pretty pictures.

Interesting look at truly long term results from the US stock market and bond market. Back ot the 1850s. Also looks at when stocks and bonds lagged "the average" or performed poorly for decades.

I guess my question is: where else are you going to go to invest your savings? Maybe real estate (but it can be a lot of work), maybe cash (but you can lose a lot to inflation)?

Government pension or annuities can be an option, but then you're essentially giving up some upside and pushing the same decisions onto another person (though they have more options, since they have much more money).

Just another argument for a diversified portfolio, rebalanced regularly.

Re: Stock market charts you never saw (2021)

#33

Post by [deleted] »

antisthenes wrote: post #24

The reason this kind of analysis is irrelevant is that human civilization has only been exploiting oil since ~ early 1900s. Sure, fossil fuels in the form of coal has been exploited before, but nothing on the scale of coal/gas/oil use that started after the Great Depression and ramped up to peak per capita consumption circa 1970s if memory serves. So you always have to look at that historic period discounting that, a…

[deleted]

Re: Stock market charts you never saw (2021)

#34

Post by hartator »

dot1x wrote: post #11
metacritic12 wrote: post #9

Earlier quoted context omitted.

It seems like this follow up paper clarifies the data's vision a lot more. Notable changes from the previous version discussed in a sister thread here: - There is no more emphasis on price-only-inflation-adjusted returns. Good riddance: getting rid of dividends makes no sense and is borderline intellectually dishonest just to make the point. - He no longer argues stocks don't work for the long run, just that bonds we…

> getting rid of dividends makes no sense and is borderline intellectually dishonest just to make the point How so? Once you retire, you don't let dividends reinvest. Makes perfect sense.

> Once you retire, you don't let dividends reinvest. Makes perfect sense.

You don't let interests from bonds reinvest as well then.

Re: Stock market charts you never saw (2021)

#35

Post by tarboreus »

ilikehurdles wrote: post #20
recuter wrote: post #10

If I was alive in 1923 and stashed away $8 million in ̶c̶a̶s̶h̶ (Edit: 100y bonds) would only be worth about $140 million today. Had I put it into some fancy ETF (Recall Vanguard dates back only to 1975, but whatever) I'd be a billionaire. That's it, that is the entire difference of less than an order of magnitude. Don't reckon the nickels and the dimes matter much to centenarians. Most people don't even have $8000 t…

If you had $8million in 1923 cash stashed away, you’d have $8million in 2023 cash today. Ie you’d have lost about 94% of your buying power.

Through most of that history, interest rates in savings accounts exceeded inflation, often significantly so. So I find this unconvincing. Obviously not a great investment comparatively, but the number in the account is going to be significantly higher.

Re: Stock market charts you never saw (2021)

#36

Post by b33j0r »

recuter wrote: post #10

If I was alive in 1923 and stashed away $8 million in ̶c̶a̶s̶h̶ (Edit: 100y bonds) would only be worth about $140 million today. Had I put it into some fancy ETF (Recall Vanguard dates back only to 1975, but whatever) I'd be a billionaire. That's it, that is the entire difference of less than an order of magnitude. Don't reckon the nickels and the dimes matter much to centenarians. Most people don't even have $8000 t…

Not fair. That Princess Diana beanie baby is a hold. Take a long position, you're going to be looking at it until you die!

I wish I still had my pogs! (Almost not kidding that it's due for a re-commercialization or embedded marketing for some comic book franchise)

Re: Stock market charts you never saw (2021)

#37

Post by cmrdporcupine »

antisthenes wrote: post #24

The reason this kind of analysis is irrelevant is that human civilization has only been exploiting oil since ~ early 1900s. Sure, fossil fuels in the form of coal has been exploited before, but nothing on the scale of coal/gas/oil use that started after the Great Depression and ramped up to peak per capita consumption circa 1970s if memory serves. So you always have to look at that historic period discounting that, a…

Sure, but it begs the question what happens when fossil fuel exploitation inevitably is curtailed drastically; either early by necessity because of reasonable legislation, or a bit later because of a stronger ecological collapse or depletion.

Solar, wind, or whatever Future Tech is unlikely to have the same direct mine->refine->commodity->sell->use cycle on which a lot of this edifice is built.

This could be quite relevant for current generations before they retire, but even more so for my children's generation.

You can already see the political fallout with various ugly regimes in various petro-states starting to panic. Wait until people's 401Ks start to explode.

Re: Stock market charts you never saw (2021)

#38

Post by tarboreus »

bobleeswagger wrote: post #31
quickthrowman wrote: post #17

Earlier quoted context omitted.

It should read “If I was alive in 1923 and invested $8M in 100y bonds that return the exact rate of inflation , I’d have $140M today” Plugging it into a USD inflation calculator checks out.

$8 million in cash will always be $8 million in cash. "Stashed it away" is pretty vague but cash is cash.

Only if you literally mean physical cash. Banks offered pretty significant interest rates historically.

Re: Stock market charts you never saw (2021)

#39

Post by Kon-Peki »

The reason all the stock market charts you see start in 1926 is because they come from CRSP data, which starts in 1926.

If you are a student at a university almost anywhere in the world that offers an MBA or other advanced degree in business or finance, it subscribes to the CRSP data service with 95+% probability. If you are an engineering or a CS student, the university contract covers you! You'll probably have to talk to someone over at the business school, but they'll get you access for all your ML research needs!

The main advantage over other data providers is that they publish their methodology and formulas, and have a full-time staff dedicated to data quality. Oh, and they're cheaper than everyone else (it's a service run by the University of Chicago instead of a for-profit corporation), so it has become the default academic data source. If you publish research using some other data, colleagues will want to know why.

Re: Stock market charts you never saw (2021)

#40

Post by knodi123 »

jldugger wrote: post #13
recuter wrote: post #10

If I was alive in 1923 and stashed away $8 million in ̶c̶a̶s̶h̶ (Edit: 100y bonds) would only be worth about $140 million today. Had I put it into some fancy ETF (Recall Vanguard dates back only to 1975, but whatever) I'd be a billionaire. That's it, that is the entire difference of less than an order of magnitude. Don't reckon the nickels and the dimes matter much to centenarians. Most people don't even have $8000 t…

10x matters quite a bit in generational wealth terms. If every generation doubles the number of plausible claimants to the wealth, thats about what is needed to balance out. On the other hand: > If I was alive in 1922 and stashed away $8 million in cash it would only be worth about $140 million today. Why would it not be worth $8 million?

> Why would it not be worth $8 million?

mice ate some.

Post reply on HN