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

How wealth dies

surplusenergyeconomics.wordpress.com

Post reply on HN
Print view View original

71–80 of 85 posts

Re: How wealth dies

#71

Post by wakawaka28 »

bryanlarsen wrote: post #66
treis wrote: post #57

Earlier quoted context omitted.

It points out a problem but ignores the obvious solution. We want the nominal value of stocks, houses, and essentially everything to continually increase. The escape hatch is that these can increase in value slower than inflation and thus be reduced in real value.

Everybody assumes that correction will happen via crash. And perhaps that's the case for stock market prices. But while we have had housing price crashes in the past, that's very much the exception. House prices are very sticky, people are irrationally unwilling to sell their houses for a loss. I've seen several markets where real estate nominal prices stayed roughly flat for a couple decades, moving the market from…

Home building is indeed the solution, but it can never outrun the printing presses. Ultimately there is a bare minimum cost of a house too. If people are too poor to pay for that, the home building pipeline will have to stall. People need to be productive and competitive enough in the economy to be able to pay for all the new houses being built.

Re: How wealth dies

#72

Post by Jweb_Guru »

cosmic_quanta wrote: post #61
mwkaufma wrote: post #27

>> 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.

Wait, it's not obvious to me why this is quackery?

It makes people uncomfortable. That's the long and the short of it.

Re: How wealth dies

#73

Post by dzonga »

well written article but he doesn't use data to prove his point that energy is what drives the economy.

you look at the UK example[0] - energy production / consumption has been going down. likewise quality of life has been going down. but yet if you listen to the economists / politicians they will tell economy is doing okay.

energy and how its used is what determines how successful an economy is. & like the prof says - money alone doesn't produce goods. energy does. money is just a transfer mechanism - which on its own is useless.

[0] - https://ourworldindata.org/grapher/per-capita-energy-use

Re: How wealth dies

#74

Post by gen220 »

rout39574 wrote: post #68
gen220 wrote: post #26

Earlier quoted context omitted.

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 con…

I understand your point; but against it I lay the truism that every time a retail investor trades, value is destroyed. ;) My own personal financial history has been more damaged by actions taken, than by forbearance and waiting. "Time in the market beats timing the market", style. So I wait for the moment when I've got Something Better To Do with the money, and then I act. And try not to second-guess later.

I don't think we're at odds here!

One possible solution to my framework is (1) to only buy things for which you have a coherent theory (2) that coherent theory holds water over the duration of your investing life.

It's possible that you had a coherent theory for purchasing TSLA at a certain price. If that price has out-run your theory, there is no contradiction in selling that TSLA and parking it in some place you have a coherent theory for, like VOO. This is maturity and humility, not hubris.

If I were in your position, I'd try to ask myself: does this decision to rollover TSLA into something I better-understand (e.g. VOO) fall inside or outside the pattern of "my own personal financial history has been more damaged by actions taken".

FWIW, "Time in beats timing" is a truism that applies to market-spanning indices, not a choice between individual securities. It would be a mistake to apply that logic to individual positions, unless you've given yourself the arbitrary restriction of only buying or selling TSLA and nothing else!

Re: How wealth dies

#75

Post by DaveZale »

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)

I made the mistake of gambling on 3x gas and oil futures once. Problem was, I got lucky a couple of times. They got all my money back and then some eventually. Gains based on luck can be toxic! Unless it's a well thought out statistical approach, maybe- but that would be a full time job.

Re: How wealth dies

#76

Post by DaveZale »

is_true wrote: post #28
drcode wrote: post #13

Earlier quoted context omitted.

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

also if the losses are in a non-IRA, they are (or were? talk to your cpa) tax deductible against other gains. But is it all worth even one lost night of sleep. Nah.... of course, there are ways of covering bets with options but that is professional level stuff.

Re: How wealth dies

#77

Post by generativenoise »

bryanlarsen wrote: post #67
intalentive wrote: post #65

Claims that ring true: * Energy physics puts an upper bound on material wealth * The disparity between notional and material wealth is large and growing * Notional wealth figures are largely speculative / fictitious Claims that could be true (if empirically verified): * Material wealth is decreasing * Energy is decreasing * The monetary system will collapse Claims that have been implied but not demonstrated or argued…

> * Energy physics puts an upper bound on material wealth Sure, but that's such a high upper bound that it may as well be false from our perspective in 2025. We use a miniscule fraction of the energy we receive from the sun.

We directly use a miniscule fraction, indirect use is quite a bit higher since that is used delivering ecosystem services we depend on.

Then there is the question of how much of that potential we want to turn into waste heat inside the atmosphere, which is more governed by how much radiative cooling we have rather than how much energy is incident or available on the earth.

I think that humanity would be limited by pollution and ecosystem destruction before energy for most human scale material wealth. The bit where it becomes tricky is energy does change what how easily and fast you can do things, which may place enough of a real world limit.

Re: How wealth dies

#78

Post by aeternum »

georgefrowny wrote: post #42
Etheryte wrote: post #22

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, an…

Yes, any shortage of energy we have today is more or less entirely voluntary on a species level. You can blame Moloch or wall Street or whatever for making it functionally impossible for whatever multipolar market-actor reasons, but with the right choices we could have plenty of energy today, just as we could (but don't) feed everyone on Earth. Eventually the will bea point where it does actually become physically im…

Seems more correct to say with different choices rather than the right choices.

For example plenty of energy likely means far more nuclear reactors, and the unfortunately truth is that most can be used to breed plutonium, so while we could be living with energy abundance, we also at least slightly increase the chance of global nuclear war. (IMO probably still worth it but it's no longer a super clear right/wrong).

With food, the problem is not producing it, it's the distribution. You aren't going to get it distributed in many countries that need it without overthrowing governments which will include lots of killing and bombing. Now it being the right choice to feed everyone is much murkier.

Re: How wealth dies

#79

Post by hapless »

fragmede wrote: post #43
mwkaufma wrote: post #27

>> 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.

That may be 100% true, but the market can remain irrational longer than you can remain solvent, and in this case, gold has been doing awkwardly well under current conditions.

Roughly half the gold produced each year vanishes into gold hoards. Half.

This has been going on for forty years. There's literally decades of gold production sitting in hoards all around the world.

Gold prices could get very strange very fast.

Re: How wealth dies

#80

Post by bryanlarsen »

generativenoise wrote: post #77
bryanlarsen wrote: post #67

Earlier quoted context omitted.

> * Energy physics puts an upper bound on material wealth Sure, but that's such a high upper bound that it may as well be false from our perspective in 2025. We use a miniscule fraction of the energy we receive from the sun.

We directly use a miniscule fraction, indirect use is quite a bit higher since that is used delivering ecosystem services we depend on. Then there is the question of how much of that potential we want to turn into waste heat inside the atmosphere, which is more governed by how much radiative cooling we have rather than how much energy is incident or available on the earth. I think that humanity would be limited by po…

It's still a tiny fraction. Plants are surprisingly inefficient users of sunshine. And our use of plants is less surprisingly inefficient.

Of course more efficient usage isn't necessarily a good thing.

Post reply on HN