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We're just at a point in the economy where it doesn't make sense to hold on to cash. It's just completely losing its value thanks to a long sustained QE. Peopl

We're just at a point in the economy where it doesn't make sense to hold on to cash. It's just completely losing its value thanks to a long sustained QE. People are just putting their money into anything as a hedge - real estate, stocks, crypto, gold. Until the value of the at can be sustained and inflation comes back, it's unlikely much else will change.

adventured 6y ago
> We're just at a point in the economy where it doesn't make sense to hold on to cash. We're not at that point, and I'm speaking as someone that supports a gold standard or equivalent to prevent rampant fiat debasement. I take it you didn't live through the 1970s. There have been numerous times in the past century where currency in major economies was prominently debased far worse, far faster than what we're seeing today. Sutained QE has done far less damage to the USD as one example, than what the 1970s did to it or the extreme destruction we saw during the George W Bush years (go to Google, type in "Belgium GDP", Netherlands GDP, Czech GDP, or Brazil GDP, almost any nation; you'll see a comical liftoff in their GDP chart, far beyond any real growth rates, that's the dollar getting massacred thanks to the idiotic fiscal policies during the GWB years). Gold went from around $250 to $1900 over a little more than a decade from ~2000-2011, before sustained QE became a thing. In the 1970s it basically went up 1,000%. Not much has actually changed about how governments destroy currencies, it's the same old same old. Perma QE didn't change much, it's not a new tool, and nothing is very different today versus the past (except that so far this is a cakewalk compared to the destruction in the past; maybe it'll get a lot worse yet, of course). You're better off holding cash than Tesla shares at $800 or $900. I'd rather take a 3% average debasement per year than sit in the S&P 500 at these levels (especially given what the US economy is going to look like in the coming decade). From these heights I'll bide my time for the next inevitable crash or significant decline, that's when the serious returns are generated, not chasing mania ever higher in markets at late stages. The big money was already made in Bitcoin, from $0 to $50,000; the upside from here is a joke by comparison to the risk. So it goes to $150,000 (maybe). That isn't a crazy return vs the outsized risk, that's the kind of return you could have gotten in any cloud stock after IPO. Yet it takes an extraordinary move of adding ~$2 trillion in market cap for Bitcoin to get there. The risk vs reward in Bitcoin at these levels is like a lot of absurdly overvalued stocks presently. And of course everyone becomes certain that something is fundamentally different today - it's not, this mania won't endure either (to be clear, we're not just in an asset bubble, this is a mania, the 8th or 9th inning of a bubble phase). Significant inflation isn't coming back anytime soon (not until or unless they start devaluing the USD directly, but that isn't for at least 20 years yet), the US is in a heat-death stage of economic erosion. Ever greater sums of capital are being put into the freezer in the form of very low yielding debt, that process will continue to rob the US of dynamism and growth, trending growth toward zero as it goes. This is the exact same process Japan went through, and it's why they were unable to spark traditional inflation with their crazy spending and QE-like programs, they tried everything in the Keynesian book and it all failed (for the same reason the US didn't drown in inflation from 2010-2020 despite the rather insanely low interest rates over that time). We're not going to see a serious wave of inflation this decade now for the same reason we didn't the prior decade.
- antoniuschan99 6y ago
  What’s your strategy? Because if that’s the case with the US then holding cash has its own issue too? Even Silver is being pumped. Can’t we say the reason why gold isn’t up 1000% is because its digital form of it, bitcoin, took that position? Isn’t QE inflating assets instead of monetary value hence why stocks/equity is going up? Btw very interesting take thank you!
  - adventured 6y ago
    No I don't think gold would be up 1,000% if Bitcoin didn't exist. Bitcoin is a more of a speculative investment than a store of value at this stage, because it has been producing such extraordinary returns (whereas gold is the opposite, on average far more of a store of value than a speculative investment (with some rare bursts of euphoria)). Bitcoin still isn't very widely/greatly (immense sums) held by the rich or the elite institutions, they're only beginning to dip their toes into it. Will Bitcoin end up primarily as a store of value over time (and less of a speculative frenzy)? Sure, that appears to be the likelihood at this point. Gold moves, across time, in line with the destruction of the US Dollar (it'll see occasional temporary bursts due to fear / panic / commodity bubbles etc). Gold is overwhelmingly priced in dollars. Most commodities are. If gold would be up 1,000% as representative of enormous inflation / destruction in the USD, we'd be seeing that in an epic commodity bubble of the sort we saw in the 2000s. You'd see it in everything from copper to oil to silver. While those commodities are clearly seeing some inflationary push-up from the dollar losing value (and bets on future dollar destruction), it's not remotely close to a 1,000% gold move type debasement. Low interest rates over a very long period of time, is indeed inflating assets, exactly as it helped cause the 2003-2007 real-estate bubble previously. I wasn't disputing any of that in what I said. Those low interest rates are causing housing values to rest far beyond where they otherwise would be (people buying more house than they otherwise could, due to artificially low mortgage rates). Those low interest rates are driving speculative money into most asset classes, from art & collectible cards to stocks and real-estate and most everything inbetween. It took a while but the high asset prices became a bubble which then became a mania, which will then either crash or otherwise be forced to stagnate across a very long period of time (think: Nasdaq from 2000 to 2015). This market doesn't have to crash, it may just decline or swing in tantrums, while inflation erodes its value and brings the valuations back in line with the mediocre US (and global) growth rates. The China boom phase is well over and there is no next China-like outcome coming soon, so global growth will largely disappoint this decade. This current market is a rather extreme case of future returns - distant future returns - being pulled forward. How many decades will it take for Tesla or Snowflake or Shopify to grow into their valuations? Tesla needs to become as profitable as 2 to 4 Toyotas to justify its present valuation, that should only take about 40 years of perfect execution and world conquering dominance. When you pull returns forward from so far into the future, the penalty you pay is stagnation as you eventually pass through that future time. And if this market does crash spectacularly, they'll pump and pump and pump and reinflate the valuations again at some point, most likely, even if it takes the better part of a decade to do it (which isn't to say those valuations will reach present mania levels again, maybe that doesn't happen but once every several decades; but to get back to abnormally elevated valuations, they can certainly drive us back to that after a crash with QE and low interest rates plus 5-10 years). My strategy is to pay as far below what I consider to be fair value as I can for high quality assets. It ends up being taking advantage of the fact that very few investors are capable of objectivity, capable of controlling themselves, capable of controlling their greed or emotions. Markets always go too high and sell down too low; you sell into the froth and buy the panic (Buffett's mantra of being greedy when others are fearful, and fearful when others are greedy, it is that simple; then repeat it with discipline across a lifetime). The disciplined win over time. I generated enormous returns from both the run up to the present, and the March quick crash. You don't need to do that very often to make a lot of money over time, as returns compound, you only need a few giant hits rarely; as such you can afford to be very strategic and very patient about it; this is one of the points that amateur investors most often fail to learn, they think you must always have your money at work, you must always be doing something, it's entirely wrong. Understanding there are many times when you should do nothing, when you should be patient, is very important. There are critical times to act, where you can strike and generate the extreme bulk of max potential returns, and that doesn't happen constantly (although people think it does during mania phases, a lot of those people will ride the mania back down the other direction though; see: Dave Portnoy as a microcosm of a typical bubble amateur routinely losing playing with a mania he doesn't understand). One of the most important rules is to first do no harm, first don't lose money, and if you can do that compounding returns will generate an extraordinary outcome over time. The people that ride this mania back down (which will be most investors), may see their progress reset by a decade (or worse), as happened with the dotcom bubble crash or real-estate bubble crash. It can take a very long time of average returns to climb back out of a 40% or 70% drop in your portfolio (eg playing with speculative fire in a stock like Tesla that could drop by 90% and still be overvalued). I don't know whether we'll see sustained damage to the economy from whatever the next crash-type event is, such that stocks stay down for a long time, or if we'll see something more like micro crashes more frequently (with QE & low interest rates bouncing valuations back up faster). Either way, my strategy is to take advantage of any event where I can buy value cheaply or cheapish. I don't need that to happen very often, I only need to make sure I get a nice hit when that pitch arrives, and I can safely stay out of the mania while others take all that risk (I seek to unload my previously purchased assets to buyers during the mania, rather than be buy-heavy at that time, in other words; then I'll reload later at a cheaper value). The only way this fails is if values never - literally never - become cheap, or reasonably priced, ever again. I don't believe that's going to be the case. If you generate a huge return from doing this, you can afford to sit out the volatile ending mania stage, even if it lasts multiple years, you become free to disregard all of it, the risk gets assumed by everyone playing in the fire and they're ultimately the desperate sellers I'll buy from later on. As a side note, this isn't timing markets (which is a common misconception). This is calculating value and making a determination about what one considers a good price to pay for an asset. When Buffett sits out the insanity, as in 1999, he isn't timing anything, he's deciding not to overpay based on his personal judgment about price vs value (price is what you pay, value is what you get). We all make such value judgments, consciously or subconsciously; you have a choice as to whether it's conscious & deliberate or abdicated, you can be calculated about it or you can throw dice or play follow the leader in a mania (eg they're all buying GME on Reddit, so I should too; shit it crashed from $500 to $40). You can train yourself to get good at judging price vs value, or you can offload to someone else's opinion of that. Those are the only choices.
Ekaros 6y ago
I'm really starting to wonder what makes sense to hold? Maybe I need to start looking into land prices. And for that I mean forest or agricultural...
- solosoyokaze 6y ago
  With land you'll have to pay property tax, which will be impacted by inflation as the land will be reappraised. Just something to keep in mind.
  - ImprovedSilence 6y ago
    A lot of states have tax breaks for ag land, or land that doesn't contain a permanent dwelling. Taxes overall can be quite low in rural counties regardless. And even with property tax, money can be made leasing the land to farmers or timbering it. There is plenty of value to be had in owning land. Plenty to be lost too, sure if you don't know what you're doing.
    - solosoyokaze 6y ago
      Interesting, thanks for adding that. I'm not a sophisticated investor but I do like to invest in REITs to capture rising property values.
- hfsp 6y ago
  hope.com
tedfernau 6y ago
Isn’t cash losing value the definition of inflation?
- Sparkle-san 6y ago
  Yes, and it's been sitting around or below 2% for some time which economists generally consider a good level for spurring spending.
  - csomar 6y ago
    The 2% is complete b.s. unless you are homeless and surviving on canned food.
  - ric2b 6y ago
    Sure, until you want to go to college, or buy a house, or have access to healthcare or buy some stocks to save for retirement. But if you don't want to improve your life and just want to survive until the next paycheck sure, I guess inflation is low.
    - Sparkle-san 6y ago
      Given that all of those things have increased in cost at rates far beyond 2%, I don't really see how you blame that on the inflation of the USD as a whole. They have their own systemic problems attributing to their astronomical costs.
      - ric2b 6y ago
        > Given that all of those things have increased in cost at rates far beyond 2%, I don't really see how you blame that on the inflation of the USD as a whole. My point is inflation isn't being measured in a way that actually matters to people worried about more than buying groceries and a new laptop. If all those things were included in the measurement inflation would be way over 2%.
- Cullinet 6y ago
dragonwriter 6y ago
> We're just at a point in the economy where it doesn't make sense to hold on to cash. One of the whole purposes of conversion to pure fiat is to eliminate any reason to hold cash other than short-term liquidity in order to encourage investment in productive assets, driving production. > It's just completely losing its value thanks to a long sustained QE. Except...it's not, the quantity of direct, utility-producing goods and services you can get for a given number of dollars is declining much slower than the long-term average rate. Easy-money policies aren’t driving significant inflation, probably because we’d be seeing significant deflation without those policies given other conditions.
- hfsp 6y ago
  Zero/negative interest rates drive capital misallocation. You are spewing MMT dogma. This is why we have zombie companies like IBM chortling around. There is asset price inflation for the things we want to buy. Stonks. Real estate in desirable places. If you examine the 500 most commonly bought household goods, inflation is tracking ~10%+ in major metro areas in the US. This is before covid.
  - deanmoriarty 6y ago
    Do you have a reference for that 10% on the top 500 items?
    - hfsp 6y ago
      www.chapwoodindex.org
lottin 6y ago
It has never made sense to hold on to cash, and it has absolutely nothing to do with QE. Read Keynes' theory of demand for money.
- adventured 6y ago
  Cash is what you want to be sitting on when discounted opportunities abound. The people that lack cash at such critical times, suffer enormously for that error. How nice was it to have plentiful cash after the real-estate implosion? They were practically giving homes and condos away in markets like Nevada or Florida, condos that were going for $250,000 during the bubble were being given away for $35k-$50k at the bottom of the implosion and there were few takers, entire buildings were sitting empty in formerly hot markets in Florida. How nice was it to have a lot of opportunity cash at the ready as the S&P 500 collapsed in late 2008 / early 2009 (or March 2020 for that matter), while everybody else was getting mauled, worried about margin calls, fleeing the market in fear. You wanted to be buying from those people as they were dumping nice assets for $0.25 on the dollar. To do that you needed cash on hand. The time period after steep asset declines or crashes, is when the majority of investors lack for cash the most, they're always pinned, scared by the hits they took, and can't seize the opportunities that become available; and that's when you make the biggest killing, that's when you take up your greatest potential return positions, not during rah rah times (that's when you cash out your prior opportunistic positioning and build cash, rinse & repeat). That's not to suggest you should always be holding nothing but cash, that isn't the point. The notion that it never makes sense to hold cash is way off the mark however. At a minimum you want some opportunity cash on hand at nearly all times, and you can increase or decrease how much that is depending on the context of the economy/market/personal/etc.
danny021 6y ago
bye bye cash

adventured 6y ago

> We're just at a point in the economy where it doesn't make sense to hold on to cash. We're not at that point, and I'm speaking as someone that supports a gold standard or equivalent to prevent rampant fiat debasement. I take it you didn't live through the 1970s. There have been numerous times in the past century where currency in major economies was prominently debased far worse, far faster than what we're seeing today. Sutained QE has done far less damage to the USD as one example, than what the 1970s did to it or the extreme destruction we saw during the George W Bush years (go to Google, type in "Belgium GDP", Netherlands GDP, Czech GDP, or Brazil GDP, almost any nation; you'll see a comical liftoff in their GDP chart, far beyond any real growth rates, that's the dollar getting massacred thanks to the idiotic fiscal policies during the GWB years). Gold went from around $250 to $1900 over a little more than a decade from ~2000-2011, before sustained QE became a thing. In the 1970s it basically went up 1,000%. Not much has actually changed about how governments destroy currencies, it's the same old same old. Perma QE didn't change much, it's not a new tool, and nothing is very different today versus the past (except that so far this is a cakewalk compared to the destruction in the past; maybe it'll get a lot worse yet, of course). You're better off holding cash than Tesla shares at $800 or $900. I'd rather take a 3% average debasement per year than sit in the S&P 500 at these levels (especially given what the US economy is going to look like in the coming decade). From these heights I'll bide my time for the next inevitable crash or significant decline, that's when the serious returns are generated, not chasing mania ever higher in markets at late stages. The big money was already made in Bitcoin, from $0 to $50,000; the upside from here is a joke by comparison to the risk. So it goes to $150,000 (maybe). That isn't a crazy return vs the outsized risk, that's the kind of return you could have gotten in any cloud stock after IPO. Yet it takes an extraordinary move of adding ~$2 trillion in market cap for Bitcoin to get there. The risk vs reward in Bitcoin at these levels is like a lot of absurdly overvalued stocks presently. And of course everyone becomes certain that something is fundamentally different today - it's not, this mania won't endure either (to be clear, we're not just in an asset bubble, this is a mania, the 8th or 9th inning of a bubble phase). Significant inflation isn't coming back anytime soon (not until or unless they start devaluing the USD directly, but that isn't for at least 20 years yet), the US is in a heat-death stage of economic erosion. Ever greater sums of capital are being put into the freezer in the form of very low yielding debt, that process will continue to rob the US of dynamism and growth, trending growth toward zero as it goes. This is the exact same process Japan went through, and it's why they were unable to spark traditional inflation with their crazy spending and QE-like programs, they tried everything in the Keynesian book and it all failed (for the same reason the US didn't drown in inflation from 2010-2020 despite the rather insanely low interest rates over that time). We're not going to see a serious wave of inflation this decade now for the same reason we didn't the prior decade.

antoniuschan99 6y ago
What’s your strategy? Because if that’s the case with the US then holding cash has its own issue too? Even Silver is being pumped. Can’t we say the reason why gold isn’t up 1000% is because its digital form of it, bitcoin, took that position? Isn’t QE inflating assets instead of monetary value hence why stocks/equity is going up? Btw very interesting take thank you!
- adventured 6y ago
  No I don't think gold would be up 1,000% if Bitcoin didn't exist. Bitcoin is a more of a speculative investment than a store of value at this stage, because it has been producing such extraordinary returns (whereas gold is the opposite, on average far more of a store of value than a speculative investment (with some rare bursts of euphoria)). Bitcoin still isn't very widely/greatly (immense sums) held by the rich or the elite institutions, they're only beginning to dip their toes into it. Will Bitcoin end up primarily as a store of value over time (and less of a speculative frenzy)? Sure, that appears to be the likelihood at this point. Gold moves, across time, in line with the destruction of the US Dollar (it'll see occasional temporary bursts due to fear / panic / commodity bubbles etc). Gold is overwhelmingly priced in dollars. Most commodities are. If gold would be up 1,000% as representative of enormous inflation / destruction in the USD, we'd be seeing that in an epic commodity bubble of the sort we saw in the 2000s. You'd see it in everything from copper to oil to silver. While those commodities are clearly seeing some inflationary push-up from the dollar losing value (and bets on future dollar destruction), it's not remotely close to a 1,000% gold move type debasement. Low interest rates over a very long period of time, is indeed inflating assets, exactly as it helped cause the 2003-2007 real-estate bubble previously. I wasn't disputing any of that in what I said. Those low interest rates are causing housing values to rest far beyond where they otherwise would be (people buying more house than they otherwise could, due to artificially low mortgage rates). Those low interest rates are driving speculative money into most asset classes, from art & collectible cards to stocks and real-estate and most everything inbetween. It took a while but the high asset prices became a bubble which then became a mania, which will then either crash or otherwise be forced to stagnate across a very long period of time (think: Nasdaq from 2000 to 2015). This market doesn't have to crash, it may just decline or swing in tantrums, while inflation erodes its value and brings the valuations back in line with the mediocre US (and global) growth rates. The China boom phase is well over and there is no next China-like outcome coming soon, so global growth will largely disappoint this decade. This current market is a rather extreme case of future returns - distant future returns - being pulled forward. How many decades will it take for Tesla or Snowflake or Shopify to grow into their valuations? Tesla needs to become as profitable as 2 to 4 Toyotas to justify its present valuation, that should only take about 40 years of perfect execution and world conquering dominance. When you pull returns forward from so far into the future, the penalty you pay is stagnation as you eventually pass through that future time. And if this market does crash spectacularly, they'll pump and pump and pump and reinflate the valuations again at some point, most likely, even if it takes the better part of a decade to do it (which isn't to say those valuations will reach present mania levels again, maybe that doesn't happen but once every several decades; but to get back to abnormally elevated valuations, they can certainly drive us back to that after a crash with QE and low interest rates plus 5-10 years). My strategy is to pay as far below what I consider to be fair value as I can for high quality assets. It ends up being taking advantage of the fact that very few investors are capable of objectivity, capable of controlling themselves, capable of controlling their greed or emotions. Markets always go too high and sell down too low; you sell into the froth and buy the panic (Buffett's mantra of being greedy when others are fearful, and fearful when others are greedy, it is that simple; then repeat it with discipline across a lifetime). The disciplined win over time. I generated enormous returns from both the run up to the present, and the March quick crash. You don't need to do that very often to make a lot of money over time, as returns compound, you only need a few giant hits rarely; as such you can afford to be very strategic and very patient about it; this is one of the points that amateur investors most often fail to learn, they think you must always have your money at work, you must always be doing something, it's entirely wrong. Understanding there are many times when you should do nothing, when you should be patient, is very important. There are critical times to act, where you can strike and generate the extreme bulk of max potential returns, and that doesn't happen constantly (although people think it does during mania phases, a lot of those people will ride the mania back down the other direction though; see: Dave Portnoy as a microcosm of a typical bubble amateur routinely losing playing with a mania he doesn't understand). One of the most important rules is to first do no harm, first don't lose money, and if you can do that compounding returns will generate an extraordinary outcome over time. The people that ride this mania back down (which will be most investors), may see their progress reset by a decade (or worse), as happened with the dotcom bubble crash or real-estate bubble crash. It can take a very long time of average returns to climb back out of a 40% or 70% drop in your portfolio (eg playing with speculative fire in a stock like Tesla that could drop by 90% and still be overvalued). I don't know whether we'll see sustained damage to the economy from whatever the next crash-type event is, such that stocks stay down for a long time, or if we'll see something more like micro crashes more frequently (with QE & low interest rates bouncing valuations back up faster). Either way, my strategy is to take advantage of any event where I can buy value cheaply or cheapish. I don't need that to happen very often, I only need to make sure I get a nice hit when that pitch arrives, and I can safely stay out of the mania while others take all that risk (I seek to unload my previously purchased assets to buyers during the mania, rather than be buy-heavy at that time, in other words; then I'll reload later at a cheaper value). The only way this fails is if values never - literally never - become cheap, or reasonably priced, ever again. I don't believe that's going to be the case. If you generate a huge return from doing this, you can afford to sit out the volatile ending mania stage, even if it lasts multiple years, you become free to disregard all of it, the risk gets assumed by everyone playing in the fire and they're ultimately the desperate sellers I'll buy from later on. As a side note, this isn't timing markets (which is a common misconception). This is calculating value and making a determination about what one considers a good price to pay for an asset. When Buffett sits out the insanity, as in 1999, he isn't timing anything, he's deciding not to overpay based on his personal judgment about price vs value (price is what you pay, value is what you get). We all make such value judgments, consciously or subconsciously; you have a choice as to whether it's conscious & deliberate or abdicated, you can be calculated about it or you can throw dice or play follow the leader in a mania (eg they're all buying GME on Reddit, so I should too; shit it crashed from $500 to $40). You can train yourself to get good at judging price vs value, or you can offload to someone else's opinion of that. Those are the only choices.

Ekaros 6y ago

I'm really starting to wonder what makes sense to hold? Maybe I need to start looking into land prices. And for that I mean forest or agricultural...

solosoyokaze 6y ago
With land you'll have to pay property tax, which will be impacted by inflation as the land will be reappraised. Just something to keep in mind.
- ImprovedSilence 6y ago
  A lot of states have tax breaks for ag land, or land that doesn't contain a permanent dwelling. Taxes overall can be quite low in rural counties regardless. And even with property tax, money can be made leasing the land to farmers or timbering it. There is plenty of value to be had in owning land. Plenty to be lost too, sure if you don't know what you're doing.
  - solosoyokaze 6y ago
    Interesting, thanks for adding that. I'm not a sophisticated investor but I do like to invest in REITs to capture rising property values.
hfsp 6y ago
hope.com

tedfernau 6y ago

Isn’t cash losing value the definition of inflation?

Sparkle-san 6y ago
Yes, and it's been sitting around or below 2% for some time which economists generally consider a good level for spurring spending.
- csomar 6y ago
  The 2% is complete b.s. unless you are homeless and surviving on canned food.
- ric2b 6y ago
  Sure, until you want to go to college, or buy a house, or have access to healthcare or buy some stocks to save for retirement. But if you don't want to improve your life and just want to survive until the next paycheck sure, I guess inflation is low.
  - Sparkle-san 6y ago
    Given that all of those things have increased in cost at rates far beyond 2%, I don't really see how you blame that on the inflation of the USD as a whole. They have their own systemic problems attributing to their astronomical costs.
    - ric2b 6y ago
      > Given that all of those things have increased in cost at rates far beyond 2%, I don't really see how you blame that on the inflation of the USD as a whole. My point is inflation isn't being measured in a way that actually matters to people worried about more than buying groceries and a new laptop. If all those things were included in the measurement inflation would be way over 2%.
Cullinet 6y ago

dragonwriter 6y ago

> We're just at a point in the economy where it doesn't make sense to hold on to cash. One of the whole purposes of conversion to pure fiat is to eliminate any reason to hold cash other than short-term liquidity in order to encourage investment in productive assets, driving production. > It's just completely losing its value thanks to a long sustained QE. Except...it's not, the quantity of direct, utility-producing goods and services you can get for a given number of dollars is declining much slower than the long-term average rate. Easy-money policies aren’t driving significant inflation, probably because we’d be seeing significant deflation without those policies given other conditions.

hfsp 6y ago
Zero/negative interest rates drive capital misallocation. You are spewing MMT dogma. This is why we have zombie companies like IBM chortling around. There is asset price inflation for the things we want to buy. Stonks. Real estate in desirable places. If you examine the 500 most commonly bought household goods, inflation is tracking ~10%+ in major metro areas in the US. This is before covid.
- deanmoriarty 6y ago
  Do you have a reference for that 10% on the top 500 items?
  - hfsp 6y ago
    www.chapwoodindex.org

lottin 6y ago

It has never made sense to hold on to cash, and it has absolutely nothing to do with QE. Read Keynes' theory of demand for money.

adventured 6y ago
Cash is what you want to be sitting on when discounted opportunities abound. The people that lack cash at such critical times, suffer enormously for that error. How nice was it to have plentiful cash after the real-estate implosion? They were practically giving homes and condos away in markets like Nevada or Florida, condos that were going for $250,000 during the bubble were being given away for $35k-$50k at the bottom of the implosion and there were few takers, entire buildings were sitting empty in formerly hot markets in Florida. How nice was it to have a lot of opportunity cash at the ready as the S&P 500 collapsed in late 2008 / early 2009 (or March 2020 for that matter), while everybody else was getting mauled, worried about margin calls, fleeing the market in fear. You wanted to be buying from those people as they were dumping nice assets for $0.25 on the dollar. To do that you needed cash on hand. The time period after steep asset declines or crashes, is when the majority of investors lack for cash the most, they're always pinned, scared by the hits they took, and can't seize the opportunities that become available; and that's when you make the biggest killing, that's when you take up your greatest potential return positions, not during rah rah times (that's when you cash out your prior opportunistic positioning and build cash, rinse & repeat). That's not to suggest you should always be holding nothing but cash, that isn't the point. The notion that it never makes sense to hold cash is way off the mark however. At a minimum you want some opportunity cash on hand at nearly all times, and you can increase or decrease how much that is depending on the context of the economy/market/personal/etc.

danny021 6y ago

bye bye cash