4 ms·

Compounding, growth etc https://www.youtube.com/watch?v=O133ppiVnWY https://www.youtube.com/watch?v=O133ppiVnWY Taught me the logical impossibility of the sto

Compounding, growth etc https://www.youtube.com/watch?v=O133ppiVnWY https://www.youtube.com/watch?v=O133ppiVnWY Taught me the logical impossibility of the stock market to go up by x% per year, forever. Taught me that getting better today (however small) can give resources to getting better(er?) tomorrow. Taught me that many "experts" just say whatever to get voted in or to get a budget without regards to the absurdity of their own statements, and that many people eat up this kind of absurdity without fact checking / validating it.

maest 7y ago
> Taught me the logical impossibility of the stock market to go up by x% per year, forever. I mean, it's just a number, at ofc it can go up x% every year. For example, consider the case where the currency gets aggressively devalued.
- maerF0x0 7y ago
  we only care about the real return % which would account for what you're saying. Non-real return is meaningless
imrish 7y ago
Man, I saw the whole video. Amazingly informative. Thanks you so much.
abetusk 7y ago
For me, this type of thinking does the exact opposite in that it has a chilling effect on finding solutions and correctly assessing reality. While some of what Al Bartlett says is true, that unfettered exponential growth can't go on forever, other statements are misleading or outright false. He has a soapbox about limiting population growth now (in the US) [0], tied in to concepts of peak oil and other "dark green" talking points. This type of thinking misses the larger picture. The irony is that exponential growth happens all across the board, not just in population growth and energy usage but in innovation for more efficient energy usage and in finding alternative energy sources. Al Bartlett builds a straw man argument, saying "technological optimists assure use that technology will always solve all of our problems ..." [1] but this isn't true. The argument against Bartlett's statement is that we haven't hit the ceiling on energy that's available to us. This is one of the first issues I have with this thinking: if we were to take his argument at face value, limit population growth, turn down our energy usage and try to live with what we have, then we're setting ourselves up for failure as every other country on the planet shifts to solar because it provides cheaper energy (yes, even to coal) and will only get exponentially cheaper for a good period of time [2] [3]. Here's some simple arithmetic [4]: The average US household consumes 30kWh of energy a day. The available energy falling to the surface of the earth is about 700 * 10^12 kWh per day. That means, at US levels of consumption, the ceiling on just using the sun for our energy needs is 23 trillion people. The earth's population is 7.6 billion now. Even taking Bartlett's estimate of population doubling every 40 years, that's over 400 years of growth. This is zero-sum thinking and leads to all sorts of "us vs. them" mentality. My first thought is that these are the proto arguments for new forms of eugenics and other oppressive behavior. It also ignores the complexity of the situation of population in the US. I think it's pretty conclusive that strong public education and financial freedom lead to less children. In the US, we already are at sub-replacement but for immigration that boosts our population [5]. I would suggest you take Al Bartlett's advice and not let other people do your thinking for you [6]. [0] https://youtu.be/O133ppiVnWY?t=4042 https://youtu.be/O133ppiVnWY?t=4042 [1] https://youtu.be/O133ppiVnWY?t=3640 https://youtu.be/O133ppiVnWY?t=3640 [2] https://e360.yale.edu/digest/renewables-cheaper-than-75-percent-of-u-s-coal-fleet-report-finds https://e360.yale.edu/digest/renewables-cheaper-than-75-perc... [3] https://en.wikipedia.org/wiki/Swanson%27s_law https://en.wikipedia.org/wiki/Swanson%27s_law [4] https://youtu.be/O133ppiVnWY?t=4070 https://youtu.be/O133ppiVnWY?t=4070 [5] https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_01-508.pdf https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_01-508.pdf [6] https://youtu.be/O133ppiVnWY?t=3332 https://youtu.be/O133ppiVnWY?t=3332
- maerF0x0 7y ago
  I agree that the limits maybe inconceivably high from here. But disagree they'll always grow. When populations are doubling you'll only at 50% before you're 1 doubling away from collapse / exhaustion. >That means, at US levels of consumption, the ceiling on just using the sun for our energy needs is 23 trillion people. The earth's population is 7.6 billion now. Even taking Bartlett's estimate of population doubling every 40 years, that's over 400 years of growth. I think we're starting to see the that the current limiting factor is not the inputs on earth's energy balance, but on the outflows. If we do not reflect a good portion of that energy, but instead utilise it (w/ a good portion being converted to heat) we'll eventually cook ourselves.
- JoeAltmaier 7y ago
  Isn't this all obsolete thinking? America (and nearly every other nation in the world) is at replacement population, or nearly. The idea of geometric population growth is some 1950's meme that won't die.
  - maerF0x0 7y ago
    He uses population growth as an example, but the big point is anything that grows geometrically has a doubling rate, and when you're at 50% consumption your only 1 doubling away from catastrophe. Or if you want to talk about summations, If you want to double the availability of something (say houses) you have to repeat the entire time series of production thus far (not counting removals, like demolitions) Same with the stock market. A stock is basically priced based on it expected future income flows compared to other investment options like bonds. Most things being equal, you need to build an entire whole new business of equal size if you want to double your share value (without dilution i might add). This task of doing the whole sum again sounds (doubling) much more difficult than "oh just grow at 6% per year for 7 yrs" (rule of 42).
vmception 7y ago
I want to point out the primary indices like the Nasdaq and S&P500 kick out poorly performing companies. So they very well could go up x% per year if their managers felt like it. It doesn't really bound to the marketcap of its components, just their relative marketcap amongst each other.
- maerF0x0 7y ago
  If you assume we've only tapped 10% of the planet's economic capacity (raw materials, energy, human support capacity) then we're only about 30 yrs from exhausting this planet. To continue doubling we'll need a new _a new earth_ every 12 years to continue it's growth rate. This is the point of the video, that when you're consuming a finite resource, you cannot have infinite growth and when you're 1 doubling away from complete exhaustion you'll only have consumed about 50% of those resources ... if doublings are 12 years apart that means the span between rapid growth and halted growth could be as small at 12 years.
  - vmception 7y ago
    I understand that talking point and that's not the point of my response. The "stock market" - particularly the indices that are improperly used to show the health of the market - can indeed continue going up to infinity for a variety of reasons that have nothing to do with physical production of physical goods. If that rocks your world so much and would like to know more then let me know
    - maerF0x0 7y ago
      I definitely would like to hear about how there can be a real valuation approaching infinity barring playing numbers games like currency/denomination manipulation[1] or artificially inflating share price extrapolated to the whole business[2]. [1]: massive devaluation of currency or a currency split can change the "valuation" in absolute count of the currency, but it wouldnt buy you any more real assets (bread, land, tanks, gold) [2]: Start a business with a trillion shares, convince a friend to buy 1 share for $1. You're now a trillionaire on paper.

maest 7y ago

> Taught me the logical impossibility of the stock market to go up by x% per year, forever. I mean, it's just a number, at ofc it can go up x% every year. For example, consider the case where the currency gets aggressively devalued.

maerF0x0 7y ago
we only care about the real return % which would account for what you're saying. Non-real return is meaningless

imrish 7y ago

Man, I saw the whole video. Amazingly informative. Thanks you so much.

abetusk 7y ago

For me, this type of thinking does the exact opposite in that it has a chilling effect on finding solutions and correctly assessing reality. While some of what Al Bartlett says is true, that unfettered exponential growth can't go on forever, other statements are misleading or outright false. He has a soapbox about limiting population growth now (in the US) [0], tied in to concepts of peak oil and other "dark green" talking points. This type of thinking misses the larger picture. The irony is that exponential growth happens all across the board, not just in population growth and energy usage but in innovation for more efficient energy usage and in finding alternative energy sources. Al Bartlett builds a straw man argument, saying "technological optimists assure use that technology will always solve all of our problems ..." [1] but this isn't true. The argument against Bartlett's statement is that we haven't hit the ceiling on energy that's available to us. This is one of the first issues I have with this thinking: if we were to take his argument at face value, limit population growth, turn down our energy usage and try to live with what we have, then we're setting ourselves up for failure as every other country on the planet shifts to solar because it provides cheaper energy (yes, even to coal) and will only get exponentially cheaper for a good period of time [2] [3]. Here's some simple arithmetic [4]: The average US household consumes 30kWh of energy a day. The available energy falling to the surface of the earth is about 700 * 10^12 kWh per day. That means, at US levels of consumption, the ceiling on just using the sun for our energy needs is 23 trillion people. The earth's population is 7.6 billion now. Even taking Bartlett's estimate of population doubling every 40 years, that's over 400 years of growth. This is zero-sum thinking and leads to all sorts of "us vs. them" mentality. My first thought is that these are the proto arguments for new forms of eugenics and other oppressive behavior. It also ignores the complexity of the situation of population in the US. I think it's pretty conclusive that strong public education and financial freedom lead to less children. In the US, we already are at sub-replacement but for immigration that boosts our population [5]. I would suggest you take Al Bartlett's advice and not let other people do your thinking for you [6]. [0] https://youtu.be/O133ppiVnWY?t=4042 https://youtu.be/O133ppiVnWY?t=4042 [1] https://youtu.be/O133ppiVnWY?t=3640 https://youtu.be/O133ppiVnWY?t=3640 [2] https://e360.yale.edu/digest/renewables-cheaper-than-75-percent-of-u-s-coal-fleet-report-finds https://e360.yale.edu/digest/renewables-cheaper-than-75-perc... [3] https://en.wikipedia.org/wiki/Swanson%27s_law https://en.wikipedia.org/wiki/Swanson%27s_law [4] https://youtu.be/O133ppiVnWY?t=4070 https://youtu.be/O133ppiVnWY?t=4070 [5] https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_01-508.pdf https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_01-508.pdf [6] https://youtu.be/O133ppiVnWY?t=3332 https://youtu.be/O133ppiVnWY?t=3332

maerF0x0 7y ago
I agree that the limits maybe inconceivably high from here. But disagree they'll always grow. When populations are doubling you'll only at 50% before you're 1 doubling away from collapse / exhaustion. >That means, at US levels of consumption, the ceiling on just using the sun for our energy needs is 23 trillion people. The earth's population is 7.6 billion now. Even taking Bartlett's estimate of population doubling every 40 years, that's over 400 years of growth. I think we're starting to see the that the current limiting factor is not the inputs on earth's energy balance, but on the outflows. If we do not reflect a good portion of that energy, but instead utilise it (w/ a good portion being converted to heat) we'll eventually cook ourselves.
JoeAltmaier 7y ago
Isn't this all obsolete thinking? America (and nearly every other nation in the world) is at replacement population, or nearly. The idea of geometric population growth is some 1950's meme that won't die.
- maerF0x0 7y ago
  He uses population growth as an example, but the big point is anything that grows geometrically has a doubling rate, and when you're at 50% consumption your only 1 doubling away from catastrophe. Or if you want to talk about summations, If you want to double the availability of something (say houses) you have to repeat the entire time series of production thus far (not counting removals, like demolitions) Same with the stock market. A stock is basically priced based on it expected future income flows compared to other investment options like bonds. Most things being equal, you need to build an entire whole new business of equal size if you want to double your share value (without dilution i might add). This task of doing the whole sum again sounds (doubling) much more difficult than "oh just grow at 6% per year for 7 yrs" (rule of 42).

vmception 7y ago

I want to point out the primary indices like the Nasdaq and S&P500 kick out poorly performing companies. So they very well could go up x% per year if their managers felt like it. It doesn't really bound to the marketcap of its components, just their relative marketcap amongst each other.

maerF0x0 7y ago
If you assume we've only tapped 10% of the planet's economic capacity (raw materials, energy, human support capacity) then we're only about 30 yrs from exhausting this planet. To continue doubling we'll need a new _a new earth_ every 12 years to continue it's growth rate. This is the point of the video, that when you're consuming a finite resource, you cannot have infinite growth and when you're 1 doubling away from complete exhaustion you'll only have consumed about 50% of those resources ... if doublings are 12 years apart that means the span between rapid growth and halted growth could be as small at 12 years.
- vmception 7y ago
  I understand that talking point and that's not the point of my response. The "stock market" - particularly the indices that are improperly used to show the health of the market - can indeed continue going up to infinity for a variety of reasons that have nothing to do with physical production of physical goods. If that rocks your world so much and would like to know more then let me know
  - maerF0x0 7y ago
    I definitely would like to hear about how there can be a real valuation approaching infinity barring playing numbers games like currency/denomination manipulation[1] or artificially inflating share price extrapolated to the whole business[2]. [1]: massive devaluation of currency or a currency split can change the "valuation" in absolute count of the currency, but it wouldnt buy you any more real assets (bread, land, tanks, gold) [2]: Start a business with a trillion shares, convince a friend to buy 1 share for $1. You're now a trillionaire on paper.