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What you'd really want is a machine you can buy that provides you useful goods and services at almost-zero maintenance cost. The stock market is sort of a proxy

by marvin 6y ago

What you'd really want is a machine you can buy that provides you useful goods and services at almost-zero maintenance cost. The stock market is sort of a proxy for this wish: You have excess capital, and you want to invest it in something that yields a return. Maybe that's a machine producing goods you can sell, maybe it's a machine that produces food and gives medical aid to you, the owner. You don't want to operate such a machine (if it is available at all), so you outsource the responsibility for a percentage of your return. It seems almost absurd that the world can end up in a state where it is impossible to invest capital in a way that provides any significant return at all. All is relative, but people still want to eat and get shelter from the rain.

dv_dt 6y ago
The stock market is increasingly disconnected from investments in real-world improvements of productivity and even if they manage to invest there in some tiny measure, it's not delivered to most people in the economy. That's the highest risk item in this whole discussion.
- marvin 6y ago
  I've had the sense that growth investments are almost completely closed to the public in the United States. This trend has been gradually solidifying ever since the dot-com bubble, and has reached its logical conclusion today. The only IPOs happen when companies reach 100-billion dollar valuations, and sometimes not even then. IPOs seem more likely for private companies that have lost their growth potential. There's certainly some potential for growth and returns still available when companies reach this stage, but the lion's share is taken out already. The index funds are also often at the ass end of this phenomenon, buying in only at very high valuations. The most absurd example happening a week ago, with Tesla entering the S&P500 as the sixth biggest company. I'd like the possibility of investing in a fund of unlisted companies. The growth sector that's not represented in the major indexes is far too big to ignore. I try to compensate by having a portion of my wealth in "small cap" companies, but there is still a very significant sector that's completely missing.
  - theragra 6y ago
    Maybe you can buy SPACs, or SPAC etf
    - dv_dt 6y ago
      SPACs are interesting, but they manage to be so by injecting an additional layer of uncertainty to the investment. They may be in practical terms not so bad, but in investment terms it's very low-commitment in the stability direction of investments take under the SPAC as I understand it. If investors have no say, then the balancing role of investment attention and selection in the market is limited and still a fundamental disconnect.
imtringued 6y ago
>It seems almost absurd that the world can end up in a state where it is impossible to invest capital in a way that provides any significant return at all. It's pretty obvious. You don't have to invest that money in the same country where that money was created in the first place. If you exchange USD for yuan and the Chinese exclusively buy US assets with their newly acquired USD then there is no reason for workers to produce anything in the US. The factory can be in China after all. In theory you could build housing with that money and employ construction workers but that is crazy talk in the US.

by marvin 6y ago

dv_dt 6y ago

The stock market is increasingly disconnected from investments in real-world improvements of productivity and even if they manage to invest there in some tiny measure, it's not delivered to most people in the economy. That's the highest risk item in this whole discussion.

marvin 6y ago
I've had the sense that growth investments are almost completely closed to the public in the United States. This trend has been gradually solidifying ever since the dot-com bubble, and has reached its logical conclusion today. The only IPOs happen when companies reach 100-billion dollar valuations, and sometimes not even then. IPOs seem more likely for private companies that have lost their growth potential. There's certainly some potential for growth and returns still available when companies reach this stage, but the lion's share is taken out already. The index funds are also often at the ass end of this phenomenon, buying in only at very high valuations. The most absurd example happening a week ago, with Tesla entering the S&P500 as the sixth biggest company. I'd like the possibility of investing in a fund of unlisted companies. The growth sector that's not represented in the major indexes is far too big to ignore. I try to compensate by having a portion of my wealth in "small cap" companies, but there is still a very significant sector that's completely missing.
- theragra 6y ago
  Maybe you can buy SPACs, or SPAC etf
  - dv_dt 6y ago
    SPACs are interesting, but they manage to be so by injecting an additional layer of uncertainty to the investment. They may be in practical terms not so bad, but in investment terms it's very low-commitment in the stability direction of investments take under the SPAC as I understand it. If investors have no say, then the balancing role of investment attention and selection in the market is limited and still a fundamental disconnect.

imtringued 6y ago

>It seems almost absurd that the world can end up in a state where it is impossible to invest capital in a way that provides any significant return at all. It's pretty obvious. You don't have to invest that money in the same country where that money was created in the first place. If you exchange USD for yuan and the Chinese exclusively buy US assets with their newly acquired USD then there is no reason for workers to produce anything in the US. The factory can be in China after all. In theory you could build housing with that money and employ construction workers but that is crazy talk in the US.