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Is the math meaningful though?
by throwk8s 4y ago
Is the math meaningful though?
- JumpCrisscross 4y ago> Is the math meaningful though? "Meaningful" is squishy. Is it strongly predictive, and in some cases, definitive? Yes.
- state_less 4y agoIf we could all get a stable (guaranteed) 15% per year, everyone would invest. But the world economy doesn’t grow at 15%.
- tjs8rj 4y agoThe US economy doesn’t grow at 7% a year but that’s what the s&p is expected to do
- hrunt 4y agoWell, the S&P (assuming the S&P 500) doesn't represent the entire US economy, but 500 companies that represent, arguably, the "winners" of the US economy, so expecting them to grow 7% while the entire economy as a whole grows less is not unexpected.
- majormajor 4y agoHow much of that is inflation? If, historically, GDP growth is about 3% and inflation is about 3%, and you're trying to invest in the strongest companies, is that how you get to 7%+?
- abakker 4y agohow many companies lose money for a few years and fold? if the S&P is winners, then it is counterbalanced by all the bad investments, pre revenue startups, and other businesses which are losing money. balancing out to 3% is not impossible.
- deleted 4y ago[deleted]
- vkou 4y agoPopulation growth + inflation + transfer of wealth from workers to capital owners + productivity gains has over the long run been pretty close to 7%.
- simonh 4y agoTo the same extent that money is meaningful.