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It's not even that "irrationality persists indefinitely", it's that it increases towards infinity. Equity > GDP as a return to risk would require you to be abl
by h4nkoslo 10y ago
It's not even that "irrationality persists indefinitely", it's that it increases towards infinity.
Equity > GDP as a return to risk would require you to be able to "invest in GDP" in a relatively variance-free way. Social Security or seizing control of the government (or at least its taxing power) is about as close as you can get, but neither is really securitizable.
- smallnamespace 10y ago> Equity > GDP as a return to risk would require you to be able to "invest in GDP" in a relatively variance-free way Technically no, it just requires one to be able to construct a basket that approximately returns GDP growth (along with GDP variance). Note that total returns to equity include dividends, so you can easily have equity give outsize returns without total market cap approaching 100% of assets.