4 ms·

This. I’ve been investing professionally for almost 20 years. You know those internet memes with the bell curve iqs…. For much of my career I was contrarian to

This. I’ve been investing professionally for almost 20 years. You know those internet memes with the bell curve iqs…. For much of my career I was contrarian to this view but after watching the government responses to repeated financial asset crises, you don’t want to be positioned too far from what the voting masses will demand if they see their home prices or 401ks sharply decline. Can governments keep this up forever? Logic would say no but then again doomsayers have been arguing about the unsustainability of trends for all five decades of my life. The “smartest” investors I know always see a climax around the corner when finally all the accumulated problems come to roost. Guess what. Last fifty years you didn’t want to be sitting out of assets holding cash. This stuff is hard. It’s really really hard as you get older and your hopefully accumulated savings are high relative to your current income and your expected remaining working life earnings. In your 20s you can ride up a bubble, lose it all, and chalk it up to a cruddy learning experience. Later in life it gets exponentially harder because mistakes are permanent and irrecoverable. You can play the game and risk it in what seem like expensive assets. Or you can sit it out and fall behind without any compounding to create wealth and offset inflation. The latter option isn’t really an option unless you start with so much wealth that you can just spend down principal being eroded by inflation year after year and still have enough. Good luck!

deleted 5y ago
[deleted]
ianai 5y ago
Which is the jump off point for portfolio management theory and risk tolerance approximation. The problem with the future though is wide systemic problems vastly unlike seen previously. The US population will get smaller as the baby boomer generation is larger than its successive generations. That’s almost the definition of negative market growth and in some cases (health care) it is. That also looks like what Japan has undergone for the last several decades. Climate change is a whole other bag of large systemic change likely to increasingly play out the younger the investor is. My point here is the future 50 years will not be as rosey as the last 50 years. And the last 50 years haven’t been exactly rosey. Edit-my proscription would be: people, not just investors, need to be willing to put in a lot of work and potentially ever increasing work into anticipating and acclimating to the world that’s headed our way. Study up on macroeconomics, micro, portfolio theory, some climate and migration patterns, and how your governments and institutions work. Maybe then you have a chance at survival. Also look for ways to make not just your life better but the conditions for life better for your neighbors, family, and future generations. Resist “tearing down the wall keeping the century-high tide away for the sake of a few pennies a brick.” Resist tearing down “the other” because while it might feel viscerally satisfying it actually creates an environment of prosecution and suffering that you will eventually suffer. Embrace the struggle of survival because it’s what we the living must do.
- prirun 5y ago
  > The US population will get smaller as the baby boomer generation is larger than its successive generations. That’s almost the definition of negative market growth and in some cases (health care) it is. And all that money the boomers have accumulated, at least what they don't blow before dying, is going to be inherited. And the heirs are going to invest it, and the government is going to force them to spend it (or at least have it taxed) within 10 years of inheriting it. No idea what effect this will have, but as usual, there are a lot of moving parts so it's hard to say how things will turn out.
- simonh 5y ago
  The last 80 years have been a golden age. Almost a billion people raised out of poverty, hundreds of millions up to a reasonably middle class standard. Dramatic health care improvements for most of the planet. Political and economic stability unlike any previous eras. A precipitous decline in deaths from warfare. Pandemics and just plain local epidemics were frequent and caused carnage. In the 70s I knew few middle class people who had travelled internationally for leisure, now I barely know anyone who doesn’t (Here in Europe may differ from the US). Yes I know there have been ups and downs, but nothing remotely like the utter existential devastation that would randomly strike previous generations. Just take a good look at any 80 year period prior to WW2 and compare it to the post war period. The difference is stark.

deleted 5y ago

[deleted]

ianai 5y ago

Which is the jump off point for portfolio management theory and risk tolerance approximation. The problem with the future though is wide systemic problems vastly unlike seen previously. The US population will get smaller as the baby boomer generation is larger than its successive generations. That’s almost the definition of negative market growth and in some cases (health care) it is. That also looks like what Japan has undergone for the last several decades. Climate change is a whole other bag of large systemic change likely to increasingly play out the younger the investor is. My point here is the future 50 years will not be as rosey as the last 50 years. And the last 50 years haven’t been exactly rosey. Edit-my proscription would be: people, not just investors, need to be willing to put in a lot of work and potentially ever increasing work into anticipating and acclimating to the world that’s headed our way. Study up on macroeconomics, micro, portfolio theory, some climate and migration patterns, and how your governments and institutions work. Maybe then you have a chance at survival. Also look for ways to make not just your life better but the conditions for life better for your neighbors, family, and future generations. Resist “tearing down the wall keeping the century-high tide away for the sake of a few pennies a brick.” Resist tearing down “the other” because while it might feel viscerally satisfying it actually creates an environment of prosecution and suffering that you will eventually suffer. Embrace the struggle of survival because it’s what we the living must do.

prirun 5y ago
> The US population will get smaller as the baby boomer generation is larger than its successive generations. That’s almost the definition of negative market growth and in some cases (health care) it is. And all that money the boomers have accumulated, at least what they don't blow before dying, is going to be inherited. And the heirs are going to invest it, and the government is going to force them to spend it (or at least have it taxed) within 10 years of inheriting it. No idea what effect this will have, but as usual, there are a lot of moving parts so it's hard to say how things will turn out.
simonh 5y ago
The last 80 years have been a golden age. Almost a billion people raised out of poverty, hundreds of millions up to a reasonably middle class standard. Dramatic health care improvements for most of the planet. Political and economic stability unlike any previous eras. A precipitous decline in deaths from warfare. Pandemics and just plain local epidemics were frequent and caused carnage. In the 70s I knew few middle class people who had travelled internationally for leisure, now I barely know anyone who doesn’t (Here in Europe may differ from the US). Yes I know there have been ups and downs, but nothing remotely like the utter existential devastation that would randomly strike previous generations. Just take a good look at any 80 year period prior to WW2 and compare it to the post war period. The difference is stark.