Generational Dynamics Forum - New Site

John, when you talk about the average p/e ratio, it is important to make the distinction whether, the companies in the basket are constant or not. when I said there was no law of mean reversion, ?I was talking about a constant group of companies. you seem to be talking about the average of whatever ...

freddyv, The funds will underperform the index and in the long run they will get crushed. It is when the severe bear market arrives, that liquidity will disappear and the index funds will go belly up. I am surprised that you use the period from 1961 to 1997 as a reference period after reading this b...

Fred, the fact will stocks will go to zero, a basically nothing, has a lot to do with real investors, and not much to do with caves.
A lot of people are up for some surprises. But the timing is always uncertain.

Actually, a lot of stocks have already gone to zero in the last few months.

freddyv, you are right that my statement would be disproved if there is an index fund that can track sp500 indefinitely, but there is not. I challenge you to show us an index fund that has tracked an index 50-60-70 years or more, and if there is, my statement is that it will lose at some point in th...

Hi john you keep talking about the law of mean reversion of p/e ratios. But such a law does not exist. You are not very precise about how you define it, but I assume you mean something like this. The average of p/e ratios in the future of a stock, or a basket of stocks, will be equal to the average ...

Hi John Thanks for your answer. Yes, I was not clear on Hitler-like, and there are probably many possibilities. But one criterium could be a person who wanted to throw all immigrants out. Someone who said that the US was a better country when it was inhabited by white Christians, and not by Hispanic...

John, a question for you.

You make the comparison between the US now and Europe in the 1930s with both of them being indebted. Asia is the new creditor corresponding to the US back in the 30s.

Will you then continue the analogy and predict that the US will elect a Hitler like president?

Gordo, I assumed you had read Kurzweil because of your use of the word "exponential". Kurzweil likes the word even though there is no way to define what exponential growth means. y=k*exp(a*t), sure, but what is y? And if you replace y with log(y), it becomes linear growth. I am not a luddite. Saying...

Very nice blog. The generational theory makes a lot of sense. It is similar to the Kondratieff cycle, or are you saying something different? About the market. It will not go down in a straight line. That would be too easy for short sellers. So one should expect violent rallies, also rallies that wil...