I think mortality is good for humans. A little afraid of the concept of computerized immortality. I also wonder if we would even be able to know if the singularity was ever achieved. The only being to truly be able to judge if things were the same would be your current self on the other side. But you run into a false positive concern where asking someone who may be a flawed version of yourself (with flawed view) on the other side if you’re the same creates an informational asymmetry and agency risk.
I’m not an economic historian and it’s certainly reasonable to assume that history will not repeat itself forever, but I imagine if you look back over the last 80 - 90 years, you’ll find plenty of examples of factors that the world’s leading economists at the time believed the markets would not be able to overcome, and yet they did in every instance within a generation.
As previously noted, I’m only banking on 7% though.
i use 10% as a conservative estimate since S&P total returns have that as a median. but historically/statistically, I am 95% certain that 30 year S&P 500 returns will exceed a 4.5%/year CAGR this is with rolling monthly CAGR using shiller’s data which stretches to 1850s. With that said, i think i can generate roughly 20% in long run since i wont invest in a stock unless i perceive at least a 30% return, but i agree that market is prolly expensive right now imo. i got a pretty huge cash balance like 25% of net worth. i might up it to 30 but wont go passed that
If it is possible for the singularity to occur, what do you think the odds are that we are living in the ‘base’ reality rather than one of the simulations? Pretty low, I’d say. Does it even matter?
For returns, what was average inflation over the last 30 years? The ~13% returns over the last 7 years with 2% inflation certainly seems unlikely to be sustainable long term.
I wasn’t particularly serious about the singularity, I don’t have enough knowledge of the subject to be able to guess when an event would occur or to what degree it would occur. What I do think is likely is that average lifespans globally will increase. Probably nothing too crazy (but again, maybe the guys at Calico will actually work through some of the bigger issues with life extension, but I am thinking that even if they do, it’ll be prohibitively expensive to implement widely), because I think a lot of the low hanging fruits been addressed already, but probably world wide the average will continue to go up and there will be some marginal gains in the modernized world. We’ve already seen at least one year with decreasing average lifespans, so I think we’re not gonna keep them increasing ad infinitum.
Other things that I think could be particularly interesting are growth would come from bringing more of the emerging markets peoples out of their extremely low standards of living and in to the global economy (which American multinationals would be able to capitalize on given their exposure to those markets), more readily accessible and produced energy from renewables and storage in new batteries, increasing automation, and greater penetration in places like sub saharan africa for mineral extraction, though I’m guessing that theres a good probability this will go less towards helping the local economies modernize, rather than just helping prop up the growth of the multinationals that would be modernizing the areas, such as china. If we actually could do some asteroid mining as well, that’d be great, but it may be a bit too out there.
And to the downside, I think that a lot of the things which helped in the past aren’t exploitable in the present. Dan Roberts goes through a lot of the things which were exploited by Reagan in the early 80s which helped spur a lot of the growth in the 80s and to this day (given that they’ve largely stayed intact), which can’t be capitalized on now to anywhere near the same degree:
And I posit that it is likely that equally dire fundamentals have existed in the past and the stock market, as measured by the S&P 500, has managed to overcome them given enough time. Making a general historical data case is actually nothing like arguing against gravity because airplanes exist. There’s not even a scintilla of similarity. You’ve moved into BS tunnelvision mode though, so I’m done. Feel free to have the last intractable word.
Will do, IMF, WorldBank Gross, Gundlach and most HF managers agree (as do you… 7%) but you keep positing a vague argument with no supporting evidence that’s not even backed up by your own assumptions (7%?)… who’s being pedantic now?
Anyhow, feel free to actually put forward an argument based on data rather than vague claims. Point to weaker population growth or higher leverage in the past. There’s actually a perfect similarity between my gravity argument and trying to disprove it because airplanes exist. Gravity is a fundamental law and the fundamentals of economics point towards weaker S&P growth because GDP is driven by population growth and debt over long periods of time. Earnings over long periods tie back to GDP and earnings drive long run valuations. Revisit Econ 101.
S&P 500 revenues by geography is roughly 50% domestic. 35% international. 15% emerging. so i dont think a slower US Real GDP of 2% is going to matter. Average world real GDP growth is prolly 3% to 5%, and corporations typically have an increasing share of the pie, so a 7% return nominal or 5% real is not too farfetched.
with that said a lot of ppl are still bullish. gundlach, buffett, tepper. buffet has a 15% cash allocation though from ev.
We are talking about slower world GDP, not slower US GDP and I’m pretty sure something that comprises 50% weight slowing down does matter. Lol. Anyhow, I’m not arguiing with a 5% real return, it’s these 10% numbers that I’m disagreeing with.
Given the long long term SPX return, like since 1920s, is about 10%, it doesn’t seem unreasonable that lower GDP growth could still result in a 7% return. And yes, the proportion of earnings from abroad is ever increasing. Even if US does not grow at the historical 3%+, this might be offset by 6% growth in China, India, or other increasingly important economies.
I wasn’t referring to GDP growth, I was referring to S&P real 2% growth over next 10+ years. Like I said “doom and gloom”. Frankly I don’t care about the predictions much as I will be in it for 30+ years either way it goes.
btw that damodaran guy. has some really good valuation videos on youtube. i saw a couple of the vids and plan to watch the whole thing from the start when i workout.