Future of Investing

Discussion of the Stock portion of the Permanent Portfolio

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jalanlong
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Future of Investing

Post by jalanlong » Wed Apr 14, 2021 3:07 pm

I have been thinking about this for a while...you know how there are certain "sea changes" that come along and we never go back to doing things the same way again. For example, once streaming music came along there was little chance we would all decide to go back to putting music on cassettes and dealing with the limitations of that format. Streaming is better. But then there are things that we start to do differently and then it blows up and we decide to go back and do it the old, "better" way. For example I think we have mostly decided that virtual learning is not nearly as productive as in-person learning for most kids, even though virtual seemed like the way of the future.

In terms of investing, when I listen to podcasts or radio/tv programs on investing now, 80% of the time I am hearing about Bitcoin, NFTs, SPACs, Wall Street Bets etc. If I hear anything about stocks it is mostly about ARK ETFs. The closest thing I ever hear about "old fashioned" investing is Index ETFs but even that is talking about stocks as if they were something like Bitcoin; a commodity to be traded in and out of with the push of a button. The notion that you are buying ownership in an actual business seems irrelevant to most these days.

Is this a sea change that is here to stay? Do I have oldmanitus or some day will these new forms of "investing" crash down and the public will once again turn to the old fashioned notion that you buy a piece of companies that you like and you feel will grow over time and then you hold them forever to bequeath to your children?
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Re: Future of Investing

Post by mathjak107 » Wed Apr 14, 2021 3:27 pm

As jack bowers said

Throughout its 200-year history, the U.S. stock market has seen some rather dramatic
shifts in sector mix.

Before the Civil War, financial stocks were more than 90% of the market cap.

By the 1880s the railroads had largely displaced them, rising to around 70% (they are less than 1% today).

By the early 1920s oil company valuations had climbed above 25% — a feat that would briefly repeat in 1980. Led by IBM, information technology took off in the 1960s.

Despite a major crash and long recovery cycle following Y2K, it’s now back above 25%. And, of course, health care: over the last century, it grew (rather steadily) from zero to 15%.

The S&P 500’s increased exposure to technology, along with tech disruptors in other sectors, now gives it a composition similar to the NASDAQ Composite in the late 1980s. (The NASDAQ started out as a small-cap index in the 1970s, looking much like the Russell 2000 does today, but over time it came to be dominated by successful startups.)
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Kriegsspiel
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Re: Future of Investing

Post by Kriegsspiel » Wed Apr 14, 2021 7:10 pm

jalanlong wrote:
Wed Apr 14, 2021 3:07 pm
In terms of investing, when I listen to podcasts or radio/tv programs on investing now
Consider that they might be more for entertainment/hold-your-attention purposes than for informational purposes?
Bitcoin
It's like gold or currencies, no big deal.
NFTs
It's like a shittier version of art collecting, nothing to be concerned about.
Wall Street Bets, ARK ETFs
Recency bias.
SPACs
Possibly a bad trend, in the sense of the South Sea Bubble "this is a company with a purpose that you don't need to know about but it's awesome" type of scam. I've long thought that there ARE situations where stocks could get crushed. Like if the advantages of incorporating were eroded away, or if people started gaming the system in bad faith (especially with low-information index investing).
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
- John Maynard Keynes
whatchamacallit
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Re: Future of Investing

Post by whatchamacallit » Wed Apr 14, 2021 8:53 pm

It is just frustrating when you see things like dogecoin go up 6500% in less than a year. Unfortunately this feels like the stories you hear from the great depression shoe shine boy stock tips.

It seems like the smart money may be buying up land now though. Bill Gates buying farm land and whoever is buying up the single family residences. Back to basics investing there.
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I Shrugged
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Re: Future of Investing

Post by I Shrugged » Wed Apr 14, 2021 8:53 pm

If there is a sea change, it's the financialization of the economy, and the casino-ization of the investment world.
Do you know there are more ETFs than stocks?
And Robin Hooders playing with futures, just like betting on sports.

So then the question is, are there fundamentals and value somewhere underpinning it all? If so, will they ever matter? Or not?
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Re: Future of Investing

Post by boglerdude » Thu Apr 15, 2021 1:46 am

Fundamentals wont matter if Fed buys corp debt to reach inflation goal
whatchamacallit
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Re: Future of Investing

Post by whatchamacallit » Mon Apr 19, 2021 3:33 pm

Some golden nuggets I found to help get back to the basics.

Paul Merriman
https://youtu.be/XF3IEEr8BfI

William Bernstein book:
https://www.etf.com/docs/IfYouCan.pdf
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jalanlong
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Re: Future of Investing

Post by jalanlong » Mon Apr 19, 2021 4:27 pm

whatchamacallit wrote:
Mon Apr 19, 2021 3:33 pm
Some golden nuggets I found to help get back to the basics.

Paul Merriman
https://youtu.be/XF3IEEr8BfI

William Bernstein book:
https://www.etf.com/docs/IfYouCan.pdf
Thanks! I am watching the Merriman one now.

Its a tough time to be in the PP when 3 of the 4 assets are flat or down but yet people are making money all over the place with stocks and crypto!
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