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And you know what happens with the money that you take, save and invest? They go in to public companies, they hire MBA's, and they try to improve profitability
by vincnetas 3y ago
And you know what happens with the money that you take, save and invest?
They go in to public companies, they hire MBA's, and they try to improve profitability of company by letting engineers go.
Your money have come a full cycle :)
- nly 3y agoTINA when CPI inflation (in the UK) is has been 18% in just 2 years.
- andsoitis 3y ago> TINA when CPI inflation (in the UK) is has been 18% in just 2 years. The UK inflation rate was 3.9 percent in November 2023, down from 4.6 percent in the previous month. Between September 2022 and March 2023, the UK experienced seven months of double-digit inflation which peaked at 11.1 percent in October 2022. https://www.statista.com/statistics/306648/inflation-rate-consumer-price-index-cpi-united-kingdom-uk/ https://www.statista.com/statistics/306648/inflation-rate-co...
- sokoloff 3y agoI can't tell from the context of your comment whether you believe the monthly inflation figures are inflation that happened in that month (the "one month's worth of inflation was X%") or if those are annualized figures (the "one month's measure of an annualized rate of inflation"). If you are of the belief that the monthly inflation figures "stack", you are saying inflation is much higher than the 18% in 2 years that GP reported. If you are not of that belief, then the figures you cite are fairly consistent with the 2 year rise in prices being in the +18% neighborhood.
- nly 3y agoUK CPIH index value (includes cost of housing) Nov 2021 - 114.1 Nov 2023 (latest value) - 130.0 So, 14%. 18% slightly out of date figure. Cash in the bank, even at 5% rates, hasn't kept up.
- md_ 3y agoCash in the bank normally doesn't keep up. If it does, the orthodox view is that you risk a deflationary spiral. Central banks want to incentivize investments.
- nly 3y agoIt's not what they want. It's the mechanics of their business. They borrow short at base rates and lend long at a margin
- lotsofpulp 3y agoOwning shares in the entities for which money for goods and services pass through is the way to keep up with inflation. If I buy things from Costco/Apple/Toyota/Novartis/etc, then they increase prices, then their share prices go up accordingly. Anything else will fall short.
- ptero 3y agoThis is a phenomenon of the last two decades. Before the fed started cutting rates after 9/11 (to support the country, the financial markets, the housing markets, etc.) both money market and savings accounts (you had to choose a good bank) usually gave positive inflation adjusted return.
- nly 3y agoBarely. In real terms US bills have returned 0.4%/yr over the last 120+ years
- md_ 3y agoSeems to me Treasury bills meaningfully outpace inflation, on average: https://www.bauer.uh.edu/rsusmel/other/lrret1.htm https://www.bauer.uh.edu/rsusmel/other/lrret1.htm. But I was talking about cash accounts, which typically pay lower interest rates than T-bills or CDs (as noted on the above link).
- deleted 3y ago[deleted]
- Jenk 3y agoProbably a confusion of what that percentage is - whilst the monthly figure is as you have said, the accumulated/aggregate percentage of inflation over those two years is probably what GP refers to as 18%
- andsoitis 3y ago> Probably a confusion of what that percentage is - whilst the monthly figure is as you have said, the accumulated/aggregate percentage of inflation over those two years is probably what GP refers to as 18% “Montly” inflation rates are usually expressed in terms relative to the prior year, not prior month. When we look at another data source, annual inflation rates for the UK don’t appear to be 18%: https://www.macrotrends.net/countries/GBR/united-kingdom/inflation-rate-cpi https://www.macrotrends.net/countries/GBR/united-kingdom/inf...
- nly 3y agoI said in two years, not one.
- pmlnr 3y ago1L Arla Lactofree milk was £1 around 2013 in Tesco. Today, it's £1.85. Bank of England inflation calculator at https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator https://www.bankofengland.co.uk/monetary-policy/inflation/in... says it should be £1.34 So much for the inflation numbers.
- latency-guy2 3y agoInflation measures are not across the board, they are aggregates. Similar to how pay at one company and profit is not ever the same even within the same industry or audience, different products have different prices.
- md_ 3y agoThe average male height is 176cm, but I'm 187. LIES I TELL YOU! PURE LIES! aka, some folks on HN don't know about statistics.
- pmlnr 3y agoOh, I understand statistics, that's not what I'm saying: I'm plainly saying that so far, with anything I threw at it, the gov.uk inflation calculator is a plain lie.
- md_ 3y agoIn my experience--which is anecdotal, and thus shouldn't be trusted--nearly any discussion of inflation involves people waving around their untrustworthy anecdotal experience as evidence that the statistics are wrong.
- ptero 3y agoAre you suggesting that while milk might have a price spike, carrots and beef would compensate? But that's not what happens. What comes down in electronics. If you exclude food, shelter and medicine (things you need to live) the numbers are in line with govt estimates. But most people would bristle at this approach.
- jbu 3y agoThat's why we now have the Vimes Boot Index - https://www.vimesbootsindex.co.uk/ https://www.vimesbootsindex.co.uk/
- bluescrn 3y agoAnd food prices feel like they're up 50% over the same period, especially when you start noticing the shrinkflation. £6 for a pint of beer (outside of London) is 'the new normal'.
- underdeserver 3y agoTINA stands for There Is No Alternative? That's a new one for me.
- TaylorAlexander 3y agoIt’s okay, if they improve profitability enough at places like Boeing our investments will be the least of our worries!
- goodpoint 3y ago> Your money have come a full cycle :) Until the huge bubble around tech companies explodes.
- abirch 3y agoTech (Meta, Apple, Amazon, Microsoft, and Alphabet) is pretty profitable with reasonable P/Es.
- oblio 3y agoReasonable by 2024 standards or by 1990 standards? I'm fairly sure that the P/Es of today would have been considered overvalued a few decades ago, when profits actually meant something, dividends were handed out, etc.
- meltyness 3y agoAmazon is priced for massive relentless growth. Apple, Microsoft, Meta priced for modest growth.
- deleted 3y ago[deleted]
- lotsofpulp 3y agoShare prices increase if the supply and demand curves for the shares move accordingly. Share buybacks decrease supply of shares relative to demand, so share prices increase. Share buybacks are likelier to happen the more profitable a business is. A higher share price at time t+1 than time t means the shareholder can earn a profit if they buy a share and then sell later. Ergo, profits mean something. Edit: as a reply to the comment below this, please take a moment to look around and identify anything providing you utility that was the product of a publicly traded company.