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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Thu May 11, 2017 8:33 am 
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"Buffet Now Contradicting His Very Own [World Famous] Investment Philosophy" :shock:

"Recently one of the most successful Wall Street investors Warren Buffet urged investors to forget about active investment and simply put their money into index funds.

Contrary to his previous ideas that one should strive to make investment decisions based on the understanding of fundamentals, now he is of the view that it is better to embrace a passive approach and follow the index.

It seems that Buffet has succumbed to the popular view as presented by Modern Portfolio Theory (MPT) that financial asset markets always fully reflect all available and relevant information, and that adjustment to new information is virtually instantaneous.

On this way of thinking, asset prices respond only to the unexpected part of any information, since the expected part is already embedded in prices.

According to MPT, the individual investor cannot outsmart the market by trading based on the available information since the available information is already contained in asset prices.

This means that methods which attempt to extract information from historical data, such as fundamental or technical analysis, are of little help. For whatever an analyst will uncover in the data is already known to the market and hence will not assist in “making money”...................":
https://mises.org/blog/essential-link-b ... al-markets

Regards, onebornfree.

And so, dear reader, Obf asks the question:

what _is_ next: Recession? Inflation? Deflation? Stock market boom?
And what can you reasonably do about it without "losing your shirt", or "betting the farm"?
See: "Got Money You Can Afford To Lose?":
http://onebornfreesfinancialsafetyrepor ... fford.html

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Thu May 11, 2017 10:43 pm 
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OBF, I don't know, but those rate hikes sure did caused a big mess in the markets...

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sat May 13, 2017 9:21 pm 
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Quote:
And so, dear reader, Obf asks the question:

what _is_ next: Recession? Inflation? Deflation? Stock market boom?
And what can you reasonably do about it without "losing your shirt", or "betting the farm"?


Isn't MPT claiming that you already know the answers, as do we all?

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 14, 2017 2:39 am 
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SmilingDave wrote:

Isn't MPT claiming that you already know the answers, as do we all?


Not according to the article linked to:

".......According to MPT, the individual investor cannot outsmart the market by trading based on the available information since the available information is already contained in asset prices.

This means that methods which attempt to extract information from historical data, such as fundamental or technical analysis, are of little help. For whatever an analyst will uncover in the data is already known to the market and hence will not assist in “making money”..................."

Or am I missing your point? "Tongue in cheek", perhaps?

Regards, onebornfree

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 14, 2017 8:32 pm 
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Quote:
".......According to MPT, the individual investor cannot outsmart the market by trading based on the available information since the available information is already contained in asset prices."
The bolded part means, I think, that everyone already knows what there is to know, and based on that knowledge has decided what they are willing to pay for any given item.

"This means that methods which attempt to extract information from historical data, such as fundamental or technical analysis, are of little help. For whatever an analyst will uncover in the data is already known to the market and hence will not assist in “making money”..................."

Here too, the bolded part seems to be saying that "the market", meaning all of us, already know all that is knowable.

From which I concluded, as noted in the previous post, that we all everything. So why are you asking us for opinions, when we all have the same opinion, as do you yourself?
Of course, I was using the question as a device to show the absurdity of the underlying assumption of MPT.

I may be missing some subtlety, but I can't see what it is.

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Mon May 15, 2017 7:42 am 
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SmilingDave wrote:
Quote:

From which I concluded, as noted in the previous post, that we all everything. So why are you asking us for opinions, when we all have the same opinion, as do you yourself?



To be clear, and speaking only for myself- I have absolutely no idea what's coming next- because I don't [ nor can I] know everything. I have some personally held intuitions as to what might happen next, at this time, but that's all. There are no guarantees.

I also have no idea as to whether everyone else here thinks the same thing [about future economic scenarios]; are you suggesting that they do?

As for asking for others opinions, the purpose of the thread to date has been to post the predictions of famous and semi-famous persons who claim to know whats coming next as a contrast to my own view that no one can reliably/consistently predict future economic scenarios/events. The famous and semi-famous persons posted obviously believe otherwise. Members here have sometimes added their own thoughts - but they are not expected to give their personal unique opinion here, but because its a forum, some will add their comments [which is great].

MVP theory is bunk, as you said. I would add that at as theory, it is not nearly as neutral and none-predictive in outlook as Buffet and others glibly assume.

Putting the majority or all of one's personal savings into the stock market, even if its in the form of "conservative" "safe" index funds, is still a blatantly [and dangerous] predictive act; the underlying predictive assumption being that the stock market as a whole will continue to gain in value over the long haul, when the fact of the matter is [again ;) ]: that no one can reliably predict the economic future, not even Buffet.

Regards, onebornfree.

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Wed May 17, 2017 6:06 pm 
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The Permanent Portfolio concept explained:

"....during the financial crisis 2007- 9, the Permanent Portfolio actually made money.........":

https://www.youtube.com/watch?v=SIPf6Anuch0

Regards, onebornfree.

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Wed May 17, 2017 8:39 pm 
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How exactly did they calculate the performance? That is, the performance is amazingly different if you rebalanced on September 1st rather than on March 1st.

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Thu May 18, 2017 1:29 am 
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DanielMuff wrote:
How exactly did they calculate the performance? That is, the performance is amazingly different if you rebalanced on September 1st rather than on March 1st.



You are correct, which is why it is more important to look at the longer term results. See:
"Long Term Savings Plan Results Update [1972- 2011]":
http://onebornfreesfinancialsafetyrepor ... pdate.html

Regards, onebornfree

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Thu May 18, 2017 9:37 am 
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Which again raises the question: When calculating the long-term performance, for the year 2008, do you rebalance on March 1, 2008, or on September 1, 2008?

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Thu May 18, 2017 11:22 am 
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DanielMuff wrote:
Which again raises the question: When calculating the long-term performance, for the year 2008, do you rebalance on March 1, 2008, or on September 1, 2017?


In the long term results I show at :
http://onebornfreesfinancialsafetyrepor ... pdate.html , which follows the original plan, the portfolio is only rebalanced back to original 25% allocations once per year, typically in December, so that all results shown reflect that single, annual re-balancing.

The Canadian version does a re-balance twice per year apparently, something I do not believe is necessary, or beneficial to overall performance.

However, the portfolio also does not strictly follow the 25% stock allocation of the original either, wrongly substituting a less volatile SP500 index fund for what is actually used in the original, i.e. a highly volatile ["high beta"] mutual fund specializing in high tech stocks.

If you wished to find out exactly how the Canadian fund [ The Filipiuk Group] calculates annual results, you could maybe try contacting it:
advisors.nbfwm.ca/en/teams/the-filipiuk-group/permanent-portfolio/

Regards, onebornfree

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Thu May 18, 2017 3:00 pm 
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If it's done in December, then there is no way that the strategy wouldn't have lost a ton of money in 2008. So, I find it a lie that the video showed only a ~1% loss for that year.

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Thu May 18, 2017 7:35 pm 
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DanielMuff wrote:
If it's done in December, then there is no way that the strategy wouldn't have lost a ton of money in 2008. So, I find it a lie that the video showed only a ~1% loss for that year.


Whatever! :D

Regards, onebornfree

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 21, 2017 9:12 am 
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"Jeff Deist[Von Mises Institute]: Is the Sky Falling?":

"The media insists the US economy has recovered from the 2008 crash. Equities markets have enjoyed a bull run since the election. Housing prices are rising in expensive coastal cities. Government offices continue to report that GDP is growing while inflation remains in check. And insiders like JPMorgan Chase CEO Jamie Dimon insist that American consumers and businesses are upbeat about the future.

But is the supposed recovery an illusion, fueled by an artificial supply of money and cheap credit from the Fed? Are housing and equity prices headed for a fall? Is inflation actually much higher than reported? Will older Americans ever recover their savings lost in the last crash? Will savers continue to lose ground to artificially low interest rates?

Has the US economy recovered, or is it a house of cards? Jeff Deist assesses the Trump economy."

Audio file : https://mises.org/system/tdf/Deist_2017 ... type=audio

Main article link: https://mises.org/library/jeff-deist-sky-falling

Obf comment: so is "the sky falling", or is something else going on?

One truth is: it's impossible to know for certain.

A second truth is: it is not even necessary for the individual to know what's next.

See: "Speculations- Got Money You Can Afford To Lose? ":
http://onebornfreesfinancialsafetyrepor ... fford.html

Regads, onebornfree

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 21, 2017 9:39 am 
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onebornfree wrote:
The Permanent Portfolio concept explained:


All 'fixed % allocation' strategies have the problem of backward bias (curve-fitting) at the time when they are designed. It's easy to pick today four assets that had not gone to zero over the last N years and build a strategy that rebalances to a fixed % allocation in each of them.

The problem with the NEXT N years is that there is no protection from the scenario where one or more of those assets keeps falling and falling, never to recover back. In that scenario, as the strategy tries to maintain the fixed % allocations with every rebalance, it would keep selling the well-performing assets and keep buying the asset(s) that keep falling towards zero. At some point the investor will be forced to make a decision about whether sticking with the strategy is still a good idea.

There is absolutely no guarantee that one or more of the four assets in the Permanent Portfolio will not go to zero over the next 30 years.

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 21, 2017 11:06 am 
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z1235 wrote:
onebornfree wrote:

There is absolutely no guarantee that one or more of the four assets in the Permanent Portfolio will not go to zero over the next 30 years.


I understand your concern, but I would suggest that you have not as yet fully understood the portfolios core concept by voicing such concerns.

However, I'm not going to argue the point here ;) : https://www.youtube.com/watch?v=XNkjDuSVXiE

Rather, I'd urge you to re-review the short introductory presentation previously posted:
https://www.youtube.com/watch?v=SIPf6Anuch0 , and then to perhaps review other books/videos that clearly explain the same core concepts.

If not, then so be it.

Regards, onebornfree

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 21, 2017 11:27 am 
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onebornfree wrote:
z1235 wrote:

There is absolutely no guarantee that one or more of the four assets in the Permanent Portfolio will not go to zero over the next 30 years.


I understand your concern, but I would suggest that you have not as yet fully understood the portfolios core concept by voicing such concerns.


I think I fully understand the concept. How would you address my concern, in a paragraph or so?

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 21, 2017 12:26 pm 
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z1235 wrote:
How would you address my concern, in a paragraph or so?


I see no benefit for me. How would doing that be in my self-interest, in your opinion? ;)

Regards, onebornfree

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Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 21, 2017 1:35 pm 
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onebornfree wrote:
z1235 wrote:
How would you address my concern, in a paragraph or so?


I see no benefit for me. How would doing that be in my self-interest, in your opinion? ;)

Regards, onebornfree


For the same reason anyone is discussing anything in this forum. You may learn something in the process.

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 Post subject: Re: Whither The Economy 2017? [The Economic Predictions Scam
PostPosted: Sun May 21, 2017 4:02 pm 
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z1235 wrote:
For the same reason anyone is discussing anything in this forum. You may learn something in the process.


Sorry, I'm not buying what you're selling, in this case.

To repeat [once more with feeling :lol: ] :

"I'm not going to argue the point here :

https://www.youtube.com/watch?v=XNkjDuSVXiE

Rather, I'd urge you to re-review the short introductory presentation previously posted:
https://www.youtube.com/watch?v=SIPf6Anuch0 , and then to perhaps review other books/videos that clearly explain the same core concepts.

If not, then so be it.

Regards, onebornfree

_________________
Onebornfree's Financial Safety Services: http://onebornfreesfinancialsafetyreports.blogspot.com/

Obf radio interview on Austrian economics, 9/11, anarcho-capitalism etc. :
https://fauxcapitalist.files.wordpress. ... 15-obf.mp3

Songwriting:'Dreams [Matrix Blues]":
https://www.youtube.com/watch?v=imUywzx9I4M

Personal Freedom Consulting : onebornfreeatyahoodotcom


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