Pops: Yeah, well several differences exist. I was a lifelong electronics hobbiest, so I skated through the circuitry part of EE, and didn't enjoy the math/physics/chemistry/quantuum mechanics. Being one of six kids, I had to pay for my own education, and the GI Bill was one way, but my daughter knew she was going to college. Then my kid got a new Jeep in HS but we made her work and make payments. But she was wise enough to not come back to Silly Valley, where she could not succeed with an undergraduate Biology degree. So she worked for the American Red Cross, then got into the health insurance biz as a customer advocate. But she bought a car, established a credit rating, and then bought a condo with a mortgage. Now she is Mommy track, her husband is in IT at UW Madison.
I'm fine with her life choices, so is her mother. We have in fact made her the next trustee for the real estate trust we have created to conserve the family wealth. She will have to select one of her kids as the next trustee.
But she's out of the tech career path I stayed with for almost 40 years of school and employment. Her husband will not likely ever be employed in Silly Valley, either. I'm fine with that, too.
But her kids will grow up with a Nantucket home to vacation at. Maybe two if the wife and I manage to build the 1, 2, or 3 cottages on the family land, also going in the trust. We will of course be conservative and not go into debt, building one at a time.
Money's just not worth what it once was, and you need appreciating assets. But things are SO DIFFERENT from when I was a kid, in ways that I could not have imagined. I was playing with vacuum tubes at age 12, and remember the awe I felt at a six transistor AM radio that fit in a shirt pocket. Not to mention an electronic calcularor, or a laptop PC, or a cell phone. Or a trip to the moon.
Edit: GHung, the accumulation of wealth is a VERY Darwinian process. It is a proven survival trait.
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The Financial System is Destroying the World Economy
Re: The Financial System is Destroying the World Economy
by KaiserJeep » Thu 26 Jul 2018, 19:00:35
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Resistance is Futile, YOU will be Assimilated.
Warning: Messages timestamped before April 1, 2016, 06:00 PST were posted by the unmodified human KaiserJeep 1.0
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Warning: Messages timestamped before April 1, 2016, 06:00 PST were posted by the unmodified human KaiserJeep 1.0
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Re: The Financial System is Destroying the World Economy
by GHung » Thu 26 Jul 2018, 19:10:55
Right, KJ. We humans have been subverting and doing end-arounds of Darwinian processes for centuries, if not millennia. WTF is Darwinian about being able to hire other people to do your killing because your daddy was rich?
Doesn't wash, except as a rationalization.
Doesn't wash, except as a rationalization.
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Re: The Financial System is Destroying the World Economy
by Pops » Thu 26 Jul 2018, 19:57:03
KJ, I'm not making any judgment, just saying your basic story seemed to fit the study, maybe I'm wrong.
GH, I guess I dragged this toward education and income by ranting on increasing wealth inequality and the lack of class mobility, and what happens to what's left of political stability with the end of growth, AKA: DOOM!
Frankly I'm not all that motivated or envious of money or afraid of not getting by. I'm more interested in doing something interesting and frankly could never really settle on what. I walked away from the best money I'd ever made because of a version of the Peter Principle I guess: I'd risen to the level of my unhappiness. I had a pretty good little company but it required me to be a manager rather than a creative and I just didn't wanna. So bye-bye 9.9, lol
GH, I guess I dragged this toward education and income by ranting on increasing wealth inequality and the lack of class mobility, and what happens to what's left of political stability with the end of growth, AKA: DOOM!
Frankly I'm not all that motivated or envious of money or afraid of not getting by. I'm more interested in doing something interesting and frankly could never really settle on what. I walked away from the best money I'd ever made because of a version of the Peter Principle I guess: I'd risen to the level of my unhappiness. I had a pretty good little company but it required me to be a manager rather than a creative and I just didn't wanna. So bye-bye 9.9, lol
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: The Financial System is Destroying the World Economy
by Tanada » Thu 26 Jul 2018, 23:08:01
$this->bbcode_second_pass_quote('KaiserJeep', 'M')oney's just not worth what it once was, and you need appreciating assets. But things are SO DIFFERENT from when I was a kid, in ways that I could not have imagined. I was playing with vacuum tubes at age 12, and remember the awe I felt at a six transistor AM radio that fit in a shirt pocket. Not to mention an electronic calcularor, or a laptop PC, or a cell phone. Or a trip to the moon.
That sparked a memory, I can still picture the first time I saw an electronic portable calculator. My sister got it for her 16th birthday, it had a red LED display and was about 1.5" thick (9V battery) by 8" wide and 3.5" high. The thing is the 'institute of higher learning' I went to had large demonstration slide rules in all the math classrooms so the freshmen could learn what those log and trig tables in the back of the textbook were for and the first college computer I learned to use was a punchcard in/out machine for the mainframe using FORTRAN.
Folks with iPhone only experience have no idea how we got where we are.
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Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: The Financial System is Destroying the World Economy
by Newfie » Fri 27 Jul 2018, 05:02:18
$this->bbcode_second_pass_quote('Outcast_Searcher', '')$this->bbcode_second_pass_quote('Newfie', 'T')HIS is what I rant on about in reference to the 0.1% wealth. It is not real, fake I tell you, fake.
So Zuckerburg lost $16 Billion? FB $120 BIllion? I don’t think so.
Here is the analogy, a close analogy. Let’s say you invested $1 million with Bernie Madoff. Bernie sends you letters saying everything is rosey you now have $10 million. Then it crashes and you have zip, $0. How much did you loose? $1 million, not $10 million. You did not loose $9 million because it never existed in the first place. Same here except it doesn’t go to zero. Back to the analogy, Bernie had SOME real assets. FB is not at zero, it still has some real assets.
So Zuckerburg lost $16 Billion? FB $120 BIllion? I don’t think so.
Here is the analogy, a close analogy. Let’s say you invested $1 million with Bernie Madoff. Bernie sends you letters saying everything is rosey you now have $10 million. Then it crashes and you have zip, $0. How much did you loose? $1 million, not $10 million. You did not loose $9 million because it never existed in the first place. Same here except it doesn’t go to zero. Back to the analogy, Bernie had SOME real assets. FB is not at zero, it still has some real assets.
Respectfully, I disagree to at least some extent.
To the extent that Zuckerberg could have unloaded his FB stock (over time) without meaningfully impacting the market, then that wealth was "real". So, if he wanted to liquidate $1 billion in FB stock over the course of, say, 3 months, to diversify -- it's likely VERY reasonable to assume he'd get roughly 99% of the average market price over that time.
For example, people own houses. Though not liquid at full price, isn't their worth "real", or the bulk of their worth? Or used cars. Or stocks or bonds or gold coins or art etc. -- more liquid than houses for sure, but certainly not anything remotely like worthless.
I have a diversified investment portfolio worth X. Because I'm conservative financially, I tend to keep close enough to half of it in near cash (money market funds and the like). (I'd far rather be a happy guy who can eat every day and pay the bills than have X more dollars by being aggressive and lucky. If that's cowardice, I'll stipulate to that. I call it prudence for a retiree.)
Now, is the half in near cash worth .5X but the half in things like stock index funds and gold and stock option spreads worth zero? I beg to differ. I could choose to liquidate the non-near-cash portfolio on day D without moving the markets I'm involved in by even .1%. For the options, I might move that more like 1% in some cases, but not enough to get excited about (remembering the put-call option parity concept).
...
Bottom line, just because assets aren't liquid cash or near cash and aren't even close to being spent doesn't mean they're "fake" or "unreal" IN ANY WAY. They're just less liquid than cash, and far more volatile in value than cash. Major markets trade about 250 days a year, very reliably.
Was the roughly 10X I gained on holding MSFT calls for the last half of the 90's "unreal"? (I'd always rather be lucky than smart). For the 80% of the position I was fortunate enough to exit when the government filed the antitrust lawsuit on them, it certainly didn't seem unreal. It was deposited just fine. It bought other assets just fine.
If an small to mid-sized investor had gotten out of the Madoff scheme, say a year before it was exposed, they would have gotten "full asset value" for their withdrawals, since Madoff wanted the scam to stay undetected. So would the assets they withdrew have never existed? NO, because the cash would have spent or earned interest, etc. just fine.
All this is true. You make nothing in the stock market until you cash out. It’s much like sitting at a roulette table, it does not matter how much you were up at one point if you didn’t stop and cash out then but went in to loose it.
Look at my example of a contractor in bankruptcy, his equipment, real estate, contracts, etc contribute to his worth.
And your own example points to the difficulty, if Z wanted to take out 1 billion and he did that over 3 months to not effect the market value. Yes, it needs to be done slowly, and even then will likely effect the share value. Otherwise the very act of cashing out would collapse the winnings.
So Z and a whole lot of other investors didn’t “loose” anything, their winnings decreased while still at the roulette table.
So Z is sitting with $77 billion, no $61 billion he can’t readily touch. He can’t eat it, he can’t even sell it freely. It brings him prestige, he gets to have lots of toys because you can buy lots of life’s amenities with a tiny fraction of this amount. But it’s not $77 billion or $61 billion in anything real. It’s a concept.
Now Z is still rich by any standard. He likely will not loose it all, even though that sort of thing has happened. So what does this mean to us?
Suppose he decided to be the world’s #1 philanthropist. Suppose he decided to liquidate all his holdings and distribute that wealth evenly across the world. At best it would be $20/person. Even in the Congo that would be a one time > 1% bonus. And he can’t remotely do that because it would crash the stock.
When you look at all those charts that talk about the 0.1% or the 1% much of that wealth is not real. It’s this fake ballon money of over inflated stock market, tulip futures. If you worry about this stuff, if you compare yourself to these folks thinking they are truly proportionally better off than yourself, then you are needlessly depressing yourself or getting worked up about a largely meaningless concept. I think you can, to a smaller but real extent, say the same about the 10%, because their wealth is in retirement, and over inflated house values. A 10,000 sq ft McMansion that costs a fortune to heat and cool is not an asset, the 1,000 sq ft bungalow that’s easy on the pocket is an asset. These stock valuations only make sense within the confines of the game in which they accumulate, like Monopoly money it’s not truly valuable in the real world of food markets, not stock markets.
That’s why I have ceased to get all wrapped up in the terror about the 1% or 0.1%. They are no more happy than I am, likely less. Isn’t that what’s important?
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