the demand for equities is based on future expected total return rather than purely speculative zero-sum capital gains expectations You’ve obviously not spent many decades in the various global markets.
equities are zero-sum throughout the day assuming no new information, but are not zero-sum in the long-term. we will be dead before the population begins to decline? as if you or anyone on earth can have any credibility in making that call. new research shows that less and less males are being born because of increased exposure to synthetic materials and chemicals. if this is actually true, expect a population decline (or at least a material, worldwide decline in population growth) sooner rather than later. i did say that oil is a necessity, but the key argument was that it is a consumable. consumables are necessities, whether they be coke, water, caviar, etc. if you live in the ocean and all you can eat is caviar, its still food and its still a necessity. gold is not a necessity. we don’t need it to live, but we do need water (whether it be pure or whether it be in coke) and we need food (whether it be McD’s or whether it be a loaf of bread). the only justification for your investment is that its going up. using that argument, you could justify a purchase of any real or financial asset (not including currencies) in the world at this point.
The population will grow by billions before it declines. Unless you have proof that is is near peaking, which obviously you don’t. http://knowledge.allianz.com/en/globalissues/demographic_change/population_growth/population_growth_positive_negative.html When Jerry Parker was asked why he bought oil in the $30s in the early 2000s, he said because it was going up. My CTA managers have done me very well within a portfolio context. They are trend followers. There are many ways to make money in the markets. Price going up is a very valid justification. And I have already offered you the fatc that it is under owned, quantitative easing, and debasement of all paper currencies, geopoliticals etc …
all i have to say is that you lose all credibility when you try and justify a point by saying “I’m right until I’m wrong, yet its inevitable that I’ll be proved wrong” and by also saying “the trend will continue until it doesn’t”. you and I are equally right about population growth because we will not know its path until that path becomes history. hell, i could be right tomorrow if nuclear bombs go off in every pool of fresh water on earth. the population growth rate will be -100% in that case. a change in trend can happen any second, day, month, year, decade, etc. for example, theres a reason why we have to include this: “past returns do not predict future results”
I agree with that. I am 100% guilty of the trend is your friend until it isn’t. It involved a lot of trial and error over the years and extensive use of trailing stops. I truly don’t put price targets on anything I trade. In my early days I learned how much commodity prices move on technicals and do trend. I’ve had to force myself to often trade contrarily to my fundamental view. Or at times to just take no position either way if I cannot reconcile my technical and fundamental view internally. I’ve long admired Paul Tudor’s trading style. In his younger years he said that prices move first and fundamentals second. Whether that strategy is right for someone else, that is up to them, but it has helped keep me out of trouble over the years. I spend a lot of time “listening to the market.” If it does not go up on bullish news then it is not bullish. I will wait for the turn, even if I am fundamentally bearish to go short, as the technicals have to confirm for me. Also the longer a bull market has been in place the more frequently it ends in a parabolic blow off top, where the most money is made and lost. This was gold in 1980 as it had gone from $35 to $850, Japan in 1989, Nasdaq and large growth in 2000, energy stocks in 79-80 etc… Decade or two decade long bull markets that have the final blast off and prices can go up multiples in a very short period of time before they collapse. I spend the bulk of my time on small cap resource stocks and I have found that a large price spike on high volume from a base on no news usually leads prices higher. I have no scientific reason for this. I would guess it is because insiders are few, there is little analyst coverage, and there is often concentrated ownership. I do take my cue from the markets. Happy Thanksgiving and safe travels to anyone hitting the road.