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What’s interesting is that Dalio believes in a massive upcoming crash and a major paradigm change in the markets ie stocks and indexes will no longer always go

What’s interesting is that Dalio believes in a massive upcoming crash and a major paradigm change in the markets ie stocks and indexes will no longer always go up long term

mym1990 4y ago
A revolution some might say
beepbooptheory 4y ago
Not smart with economics, is the mainstream idea that it will always go up long term? I always kind thought crashes were inevitable occurrence, and that its gotta go down for it to go back up again. And inflation and the ever higher line and so forth is just ultimately a superficial thing to keep things moving. Or rather, wouldn't it be more rational to strive for the line to stay even? Such that we can save all the tumult, the upticks in suicide, the poverty.
- deleted 4y ago
  [deleted]
- rr808 4y ago
  > its gotta go down for it to go back up again. I think that is the point. If it crashes it'll inevitably go back up is the expected behavior. It isn't always true, Japanese market is still lower than 1989. Measured in dollars most international markets have gone sideways for 25 years.
  - SirLJ 4y ago
    That’s why passive investing is great for the regular investor, provided a little research is done to avoid buy and “hope” trap…
  - ac29 4y ago
    > Measured in dollars most international markets have gone sideways for 25 years. This is not even remotely true if you include dividends.
- pixl97 4y ago
  It is massively harder to design a steady state economy than it is to have one with a constant upward trend on things like inflation. You have less degrees of freedom maintaining 0, then you do +.0001 to (some higher number). Also there is game theory elements involved here when it comes to trade. You have to get everyone of any size to also agree to steady state the economy also.
faeriechangling 4y ago
I hear the idea the S&P will go 10% every year (in real value) being treated like a natural law by some people despite the fact that this is obviously impossible. It's a heck of a thing to try and time the peak of the market though.
- everfree 4y ago
  > I hear the idea the S&P will go 10% every year (in real value) being treated like a natural law by some people despite the fact that this is obviously impossible. Why is it obviously impossible? It just requires technology to improve at such a rate so that we can extract 10% more value every year from the same amount of labor (minus inflation).
  - faeriechangling 4y ago
    Because we will run out of natural resources. Our supply of natural resources is not going to increase by 10% year over year over the next century unless one of those technologies we develop is alchemy.
    - SirLJ 4y ago
      As I do this for a living, let me point out, the index is not set in stone, new companies and technologies all replace the old and it will continue forward…
    - everfree 4y ago
      Productivity is a function of technology, labor, and natural resources. If technology improves by 10%, we can still see a 10% increase in wealth even if labor and natural resources remain steady. If technology improves by a whole lot, we could theoretically even see an increase in wealth amidst decreasing labor and natural resources.
    - segmondy 4y ago
      where in the world did you get the idea that the growth of SP500 and natural resources are correlated? This is very naive. There's 0 correlation. SP500 can go up 100x with 0% productivity. It's called hyperinflation.
everfree 4y ago
Why does he believe that? Does he think that public companies will capture less of the world's wealth going forward, or does he think that global wealth will plateau?
- theGnuMe 4y ago
  He has this theory that we basically destroy everything with war and then rebuild. This happens when inequality and debt burdens get too high. The conflicts can be internal to a country and external between countries.
- chaostheory 4y ago
  He has two books that outline his theory on currencies and the rise and fall of empires. As in everything is cyclical, and we are at the start of a long downturn. It reads like a real life, analog of Hari Seldon’s Prime Radiant. This is a summary of his latest book which is no longer freely available online https://www.marketplace.org/shows/marketplace-morning-report/capitalism-economy-ray-dalio-bridgewater-trump-twitter-executive-order-social-media/amp/ https://www.marketplace.org/shows/marketplace-morning-report... His first is still free. https://www.principles.com/big-debt-crises https://www.principles.com/big-debt-crises
bern4444 4y ago
He has to in order to get TV time. He's moved on from being content with being rich - now he's after fame, presence, and recognition and the only way you get that in finance is in making "the end is coming" predictions. If you say everything will be fine, we might have a year of adjustments before the markets work this out - well, you won't get your air time on cnbc.

What’s interesting is that Dalio believes in a massive upcoming crash and a major paradigm change in the markets ie stocks and indexes will no longer always go up long term

mym1990 4y ago

A revolution some might say

beepbooptheory 4y ago

Not smart with economics, is the mainstream idea that it will always go up long term? I always kind thought crashes were inevitable occurrence, and that its gotta go down for it to go back up again. And inflation and the ever higher line and so forth is just ultimately a superficial thing to keep things moving. Or rather, wouldn't it be more rational to strive for the line to stay even? Such that we can save all the tumult, the upticks in suicide, the poverty.

deleted 4y ago
[deleted]
rr808 4y ago
> its gotta go down for it to go back up again. I think that is the point. If it crashes it'll inevitably go back up is the expected behavior. It isn't always true, Japanese market is still lower than 1989. Measured in dollars most international markets have gone sideways for 25 years.
- SirLJ 4y ago
  That’s why passive investing is great for the regular investor, provided a little research is done to avoid buy and “hope” trap…
- ac29 4y ago
  > Measured in dollars most international markets have gone sideways for 25 years. This is not even remotely true if you include dividends.
pixl97 4y ago
It is massively harder to design a steady state economy than it is to have one with a constant upward trend on things like inflation. You have less degrees of freedom maintaining 0, then you do +.0001 to (some higher number). Also there is game theory elements involved here when it comes to trade. You have to get everyone of any size to also agree to steady state the economy also.

faeriechangling 4y ago

I hear the idea the S&P will go 10% every year (in real value) being treated like a natural law by some people despite the fact that this is obviously impossible. It's a heck of a thing to try and time the peak of the market though.

everfree 4y ago
> I hear the idea the S&P will go 10% every year (in real value) being treated like a natural law by some people despite the fact that this is obviously impossible. Why is it obviously impossible? It just requires technology to improve at such a rate so that we can extract 10% more value every year from the same amount of labor (minus inflation).
- faeriechangling 4y ago
  Because we will run out of natural resources. Our supply of natural resources is not going to increase by 10% year over year over the next century unless one of those technologies we develop is alchemy.
  - SirLJ 4y ago
    As I do this for a living, let me point out, the index is not set in stone, new companies and technologies all replace the old and it will continue forward…
  - everfree 4y ago
    Productivity is a function of technology, labor, and natural resources. If technology improves by 10%, we can still see a 10% increase in wealth even if labor and natural resources remain steady. If technology improves by a whole lot, we could theoretically even see an increase in wealth amidst decreasing labor and natural resources.
  - segmondy 4y ago
    where in the world did you get the idea that the growth of SP500 and natural resources are correlated? This is very naive. There's 0 correlation. SP500 can go up 100x with 0% productivity. It's called hyperinflation.

everfree 4y ago

Why does he believe that? Does he think that public companies will capture less of the world's wealth going forward, or does he think that global wealth will plateau?

theGnuMe 4y ago
He has this theory that we basically destroy everything with war and then rebuild. This happens when inequality and debt burdens get too high. The conflicts can be internal to a country and external between countries.
chaostheory 4y ago
He has two books that outline his theory on currencies and the rise and fall of empires. As in everything is cyclical, and we are at the start of a long downturn. It reads like a real life, analog of Hari Seldon’s Prime Radiant. This is a summary of his latest book which is no longer freely available online https://www.marketplace.org/shows/marketplace-morning-report/capitalism-economy-ray-dalio-bridgewater-trump-twitter-executive-order-social-media/amp/ https://www.marketplace.org/shows/marketplace-morning-report... His first is still free. https://www.principles.com/big-debt-crises https://www.principles.com/big-debt-crises

bern4444 4y ago

He has to in order to get TV time. He's moved on from being content with being rich - now he's after fame, presence, and recognition and the only way you get that in finance is in making "the end is coming" predictions. If you say everything will be fine, we might have a year of adjustments before the markets work this out - well, you won't get your air time on cnbc.