stockmarkets -are we nearing the bottom or is there further to go ??

Thrugelmir

Glen_Clark wrote: »

Doesn't look like it because the English Establishment was still throwing money at Scotland after then when the Scots were threatening devolution. The English Establishment don't want to lose Balmoral, or Faslane, for a start. Politics is very relevant to Savings and Investments because it would be very useful to know where the politicians are going to throw our money.

The G10 summit in May 2010 clearly identified the fact that tightening Governmental spend, While at the same contracting the banks balance sheets was going to be a monumental task. No one foresaw the growth in debt in Asia nor the change in commodity prices nor the false economic data emanating from China though. There's concurrent games of poker being played. Who knows who the winners will be.

JohnRo

Thrugelmir wrote: »

No one foresaw the growth in debt in Asia nor the change in commodity prices nor the false economic data emanating from China though.

There were and are voices talking clearly and in considerable detail about these things, they're not included in the mainstream narrative though. I think the collective term is "doom mongers"

Thrugelmir

JohnRo wrote: »

There were and are voices talking clearly and in considerable detail about these things, they're not included in the mainstream narrative though. I think the collective term is "doom mongers"

6/7 years ago? I'd be surprised. As focus was clearing up the mess that already existed and hadn't been quantified.

BananaRepublic

grey_gym_sock wrote: »

absolutely. investing is not an zero-sum game. (monevator's explanation of this: http://monevator.com/is-investing-a-zero-sum-game/ )

however, active investing is a zero-sum game, or when you allow for costs, a negative-sum game. (see monevator again: http://monevator.com/is-active-investing-a-zero-sum-game/ - or indeed see fama & french: https://www.dimensional.com/famafrench/essays/why-active-investing-is-a-negative-sum-game.aspx )

active investing is - as it was a few decades ago - a huge waste of money, in which investors all spend a lot of money trying to be better than average, they can't all be, and only the investment mangers get rich. most ppl (if they have any capital to invest) would be much better off investing passively.

now, there are many more investing products available than a few decades ago. and a few of them are even useful. at one time, investing passively meant buying a few blue-chip shares and holding them forever (or thereabouts). now it means buying and holding some index trackers. it's easier and cheaper, and diversifying to overseas markets is much more practical.

however, it is a timeless truth (so far) that the expensive investments vehicles are in effect a device for transferring wealth from the investor to the investment manager.



active investment managers are not generally crooks - they just offer an expensive product which is as likely to subtract value as to add it - a rip-off, not a scam.

the top bankers, however, are literally crooks. the authorities have in practice decided never to prosecute individual bankers for control frauds, or even to ban them from holding top roles in banking, and instead to seek fines from the banks, not the bankers, or empty promises for the banks to amend their conduct.

for failures to prosecute to date, see: http://www.nybooks.com/articles/2014/01/09/financial-crisis-why-no-executive-prosecutions/

for some proposals for how to fix this (which they are asking US presidential candidates to adopt), see: http://neweconomicperspectives.org/2016/01/announcing-bank-whistleblowers-groups-initial-proposals.html

(yes, those links relate to the USA, not UK ...)

If by active investing you mean purchasing shares in a unit trust which is actively managed, then you are repeating an idea that is widespread, and which the Blair government promoted. The truth is that some fund managers do consistently beat the market, and my own experience is that my actively managed funds have all bar one beaten the market, quite substantially too. The exception is a Japan fund, but my other gains have more than compensated. It is often said that past performance is no guide to future performance, but it does seem to be a good measure. I had one poor fund, which I bought when naive, and did not research properly, but after a few years I moved the funds and they have since done better.

Obviously it is bad to put all eggs in one basket, but I am happy with a spread of actively managed funds, and I am moving my passive investments to active ones. The latter did quite well, doubling in value, but mainly because I invested near the low of the last crash.

JohnRo

Thrugelmir wrote: »

6/7 years ago? I'd be surprised. As focus was clearing up the mess that already existed and hadn't been quantified.

"Dr. Doom" Roubani, Schiff and several other prominent doom mongers predicted the collapse that arrived in 2007. Stockman has been talking in detail about counterfeit GDP in Asia, the red Ponzi and central banking insanity, amongst other things, from as far back as 2010.

themanfromamarillo

Biggles wrote: »

Ooh, you're playing a dangerous game, racing blue. Someone is now going to point out how Roman soldiers had formed a 'head and shoulders' (or some other total tosh) and thus their decline was predictable from the chart.

BTW I'm short centurions.

Ah but if you'd diversified geographically in Visigoths, Persia, Franks etc.......

But seriously, the Roman Empire in 100AD and Japan in 1989 were both probably about 10% of the world economy. Yes economies rise and fall. Yes some countries fall into longer term decline. Yes the world can go through depressions. But in the end, the world economy bounces back.

racing_blue

themanfromamarillo wrote: »

Yes economies rise and fall. Yes some countries fall into longer term decline. Yes the world can go through depressions. But in the end, the world economy bounces back.

I don't want to sound like a nut-job. But on a purely Malthusian level, at some point civilisation will end & at that point in time, investors are going to get burned. Burned I tell you. Perhaps even literally, with brimstone and stuff, and frogs, plagues of frogs.

Aegis

grey_gym_sock wrote: »

absolutely. investing is not an zero-sum game. (monevator's explanation of this: http://monevator.com/is-investing-a-zero-sum-game/ )

however, active investing is a zero-sum game, or when you allow for costs, a negative-sum game. (see monevator again: http://monevator.com/is-active-investing-a-zero-sum-game/ )

It's interesting that he changes the game when defining what constitutes a zero sum game between those two articles. In the first, investing isn't a zero-sum game because of the dividends which flow in over time, meaning everyone who buys and sells shares can effectively be a winner (i.e. can have made money on their purchases). In the second the definition is changed to make the game all about beating the market rather than just generating a return over time. He has good points to make, but making these in quick succession looks a little dishonest, as by his own definitions active and passive investing would simultaneously both be positive sum and negative sum games.

Ideally he needs to stick with one definition.

There's also a further issue that different investors making up the market are playing different "games". The goals of an income investor might well be different to those of a growth investor, and where you have multiple games going on in a single space it is much more complicated the determine which are positive sum and which are negative even if at first glance the entire system seems to be one large zero-sum game. It is possible that with differing win conditions within each subset of the market all games could be positive sum - clearly this isn't the case in reality because we can all identify catastrophic single-fund investments than no-one could feel they won on, but analysing further does show that the concepts of positive sum, zero sum and negative sum are not as simple as merely looking at the market and deciding that the only game is to beat the market in absolute performance terms using only one measure.

themanfromamarillo

racing_blue wrote: »

I don't want to sound like a nut-job. But on a purely Malthusian level, at some point civilisation will end & at that point in time, investors are going to get burned. Burned I tell you. Perhaps even literally, with brimstone and stuff, and frogs, plagues of frogs.

True, but if I end up scrabbling through a nuclear wasteland for dead rats to eat I think the value of my ISA won't be high on my list of priorities.

racing_blue

themanfromamarillo wrote: »

True, but if I end up scrabbling through a nuclear wasteland for dead rats to eat I think the value of my ISA won't be high on my list of priorities.

Indeed.

But - hear me out - what if the journey to that point starts softly. With a few years of deflation, economic contraction, a stalling of economic growth. At some point in the future, there may be generations of investors who are caught with no trunks when the tide goes out.

I don't even know what my point is. About diversification possibly. Do you have any rat spare?