Sunday, November 23, 2014

Creme dela creme

Moral: Wherein we celebrate a voice of reason, Morgan Housel. He stands out in this day and age where value (cream) is siphoned off daily by the jerks of Wall Street (and their compatriots).


Morgan is of the WSJ. The weekend of 11/23/2014, Morgan wrote this: The Market Is Your Friend. Really: One Millennial’s Advice to Peers. There will be a lot to discuss, over time, such as: what is the market? friend? why is this? what is value? ...

All in all, though, the article is a very good read, for any of the generations, including my own (retired, being slapped silly by Yellen and crowd).

The image comes from Morgan's article. Essentially, he is looking at different cohort groups based upon several decades in the 1900s and comparing them during the years of 18 to 30. The curves show the difference in value at the end of the period of money that was invested at the beginning ($1,000). The upper curve deals with those born in 1970.

Again, this post is a place holder depicting future discussion. As, take that first question: what is the market? Depends. But, of those definitions that are possible, the ca-pital-sino is the worse of the sort (for many reasons, not the least of which is that it bolsters/inflates year-end bonuses for people doing things that are not necessary; but, we can, and will, go on about this.).


Let's harken back three months. This blog had a post depicting how savers are being flayed to an inch of their skin. For what reason is this? And, why is it still happening when the bubbles of equity markets are apparent to all who can see?

You see, Housel is not talking that market which is short sighted. No, he is talking longer term. And, we will get back to this.

So, about the post (Savings and savers). Notice please. A set of bonds bought in the 1980 were cashed in 2010 for a value that was 4.2 times. You see, those who tout equity do not consider the risks properly.

Why? Well, that is another thing to discuss. But, I, personally, have seen lots of people who lost. Am I lucky or what? That is, for having seen them? No, just observant. At the same time, I came through (applying my own set of rules) unscathed (except for angst in being ineffectual in trying to get the attention of the likes of Yellen - look you Ivy-leagued members of the Fed (am I wrong?), get out to Main Street and talk to real people).

Let me repeat, the return from bonds was 422% over the period. The post, of course, talks about the downturn in earnings of some bond holders brought on by the Fed's feeding the frenzy of the addicts. ... Enough (the blood boils).

Look, again, look, the thrust ought to be sustainable economics (not special interest catering - though, money does talk, as we all know).


Now, in closing this, let's just say the following: so what the difference between $6,800 (or thereabout) and $4, 200 (or so) when it comes to getting one's bucks? At least, that $4,200 is not blood money'd (too, there was little angst over the years). What? Yes, the inflation caused with the current equity schemes (ponzi, made-off -- all of this can be seen here via search) is such that the house grabs (daily) its take.

And, you know what? Let me explain, if you will listen. In doing so, they are diluting the remainder. Taking the cream away, leaving very slim picking (that is, everyone else is forced to diet - how long will such fat cat'ism be the way of the land?).

So, that, at the end, the residue is what people get.

Strange state of affairs, people. Marx is laughing up his sleeve.

Remarks:  Modified: 11/24/2014

11/23/2014 -- Now, given the likes of Morgan, can this old guy rest a little easier?

11/24/2014 -- Over bought. Troubles with stocks: the cheshire multiple, not dollar equivalent. Neither of these say, no equity. But, mature minds do not run after the ephemeral chimera even if it does pay out (because of the fact that its payout is only) to the lucky few.

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