OT: Goodbye to the American Dream

[rickman]

On 8/30/2015 12:42 PM, amdx wrote:

On 8/30/2015 10:16 AM, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it
was luck, but mostly just recognizing what companies seemed to have
their act together and buying their stock. I bought Texas
Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P
500 index funds in my 401K . I also bought a little Nucor stock when
it was Nuclear Corp of America. Should have lost my ass on that, but
it turned out okay.

It is really easy to get rich, but you need to start early.


Dan


Except for new issues, the stock market is
mostly a gambling pool.


Sorry John, on this one I need you need to get educated.

In my lifetime (1955) the S&P 500 has went from 50 to 2100.
A 42* multiple, inflation is only a 9 multiple.
Just Dollar Cost Average into a low cost total stock market index, and
hold it until you near retirement, Then you need to back off on the
percentage of stocks**.
Rule #1 You can't time the market.
Rule #2 Don't panic and sell at the bottom of a market correction.

I think rule 1 is defeatist. A friend has timed several aspects of the
economy with good results. He got out of stocks in his 401k just before
black Friday because he saw the market was up irrationally. He sold his
home at the top of the housing bubble again because values had gone up
irrationally. He is now retired in his 50's, living in Vietnam like a
relative king.

I personally found a number of investments which I knew would pay off
within 6 months to a year and they did. In stocks, timing is
*everything*.

BTW, philosophies like Dollar Cost Averaging is pure BS only working for
certain conditions in the market and working very poorly for other
conditions. *Understanding* stocks is a much better way to invest
profitably.

--

Rick

 

[amdx]

On 8/30/2015 10:10 AM, John Larkin wrote:

On Sat, 29 Aug 2015 22:30:43 -0400, DecadentLinuxUserNumeroUno
DLU1@DecadentLinuxUser.org> wrote:

On Sat, 29 Aug 2015 17:32:55 -0700, John Larkin
jjlarkin@highNOTlandTHIStechnologyPART.com> Gave us:

Rich people organize ordinary people to get stuff done. Humans are
tribal and need leaders.

You ain't one.

How many people report to you?

How many people do you report to, in the sense of management levels? I
know some people who are at the bottom of level 12.

I'm under my wife, sometimes that's good.
Mikek

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[rickman]

On 8/30/2015 1:20 PM, John Larkin wrote:

On Sun, 30 Aug 2015 11:42:15 -0500, amdx <nojunk@knology.net> wrote:

On 8/30/2015 10:16 AM, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it was luck, but mostly just recognizing what companies seemed to have their act together and buying their stock. I bought Texas Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P 500 index funds in my 401K . I also bought a little Nucor stock when it was Nuclear Corp of America. Should have lost my ass on that, but it turned out okay.

It is really easy to get rich, but you need to start early.


Dan


Except for new issues, the stock market is
mostly a gambling pool.


Sorry John, on this one I need you need to get educated.

In my lifetime (1955) the S&P 500 has went from 50 to 2100.
A 42* multiple, inflation is only a 9 multiple.

Sure, but stocks have a higher value mostly because other shareholders
think they do. Some popular stocks are in companies that don't make
money and probably never will.

"Some" does not reflect the market as a whole. You are painting with a
very broad brush.

Just Dollar Cost Average into a low cost total stock market index, and
hold it until you near retirement, Then you need to back off on the
percentage of stocks**.
Rule #1 You can't time the market.

Sometimes you can.

Rule #2 Don't panic and sell at the bottom of a market correction.

Agree on that one.



Mikek


* Doesn't include dividends.

Dividends used to be the main reason to hold stocks. That's less
common now, mostly because dividends are double taxed. That's why
there are buybacks and such.


** You need to reduce stock exposure at retirement because the market
does go down and you don't want to withdraw living expenses from a
portfolio that has dropped 35%.
You then with draw from bonds or other fixed income assets.

Here's a neat program that uses historical stock market returns to
see if your portfolio will have money until you die.
It starts with your portfolio, spending rate and inflation, (other
data can be included*) Then, it makes, say a 30 year run from 1900 to
1930. Then repeats that from 1901 to 1931, On and on until it runs 1985
to 2015. If your money goes below zero dollars on any 30 year run, you
need more money.
Of course, previous returns have no bearing on the future, but,
unless you think the stock market will change it's return
during your retirement, it's a neat test of your portfolio.
http://www.firecalc.com/

* you can add when and how much SS income, any pension income, spending
can increase with inflation and several other options can be included.



What dissapoints me is that our capital-intensive economy favors the
prople who can invest, and greatly favors the wheeler-dealers and
brokerages, and destroys small companies and working-class jobs.
Because Wall Street runs Washington.

So your company is on the verge of going under because of Washington and
Wall Street?

The big political movers these days seem to be ex-speculators
(including ex-Nazis) and former hedge fund managers, parasites in my
book.

Whose rule is that about the Internet and the mentioning of Nazis?

--

Rick

 

[rickman]

On 8/30/2015 1:46 PM, dcaster@krl.org wrote:

On Sunday, August 30, 2015 at 1:20:40 PM UTC-4, John Larkin wrote:

Sure, but stocks have a higher value mostly because other shareholders
think they do. Some popular stocks are in companies that don't make
money and probably never will.

Can not agree with that. Generally stocks have a higher value because the company is making more money. The Price to Earnings ( PE ) stays roughly the same. Like anything sentiment does have an effect.

Can you name any companies that are popular and do not make money. There are some, but not many.

You don't have to be bringing in money to be building wealth. The
creation of a large customer base that can be utilized for other uses
can be a huge value which is worth a lot to other companies. They then
buy the company with the large assets often for cash to the investors.

--

Rick

 

[Bill Sloman]

On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:

On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:16:26 AM UTC-4, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

<snip>

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come due
eventually. We spent about 5 years printing 6% of GDP in phony prosperity,
borrowed from our future. The only question is whether we'll make monthly
installments (reductions in future growth), or have the bill come due all
at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP. Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

That was probably about one GDP*years worth of lost production.

You pay your money and you take your chances, but the US economy hasn't actually shrunk (except for about one quarter, before the stimulus got going) since the GFC.

Bastiat wouldn't have liked it, so James Arthur doesn't believe in it.

--
Bill Sloman, Sydney

 

[Les Cargill]

dagmargoodboat@yahoo.com wrote:

On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:16:26 AM UTC-4, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it was luck, but mostly just recognizing what companies seemed to have their act together and buying their stock. I bought Texas Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P 500 index funds in my 401K . I also bought a little Nucor stock when it was Nuclear Corp of America. Should have lost my ass on that, but it turned out okay.

It is really easy to get rich, but you need to start early.

Dan

I don't think that buying established stocks, getting rich that way,
does society much good.

I think it does. If you had zero chance of ever selling your house you'd
have a lot more trouble buying one, getting a loan, or ever justifying the
decision.

A house has real value. People can live in it.

A company can have real value too--it can make something people want. The
ability to make (and sell) something has value, as proven by the fact that
people are willing to pay for it. (Secondarily, companies can have cash and
own assets & land.)

But 50-60-70 years ago, capital meant large heavy things that
you could inventory.

It's much more ephemeral now.

Like a company, a house can have a greatly inflated value. Houses that would
cost $200k in my world might be ten times that in yours, made of the same
materials, similar labor, and offering the same comforts.

I'll take "land position rents" for $200k, Alex. This really is a
thing.

Likewise for buying part-ownership in a company. There'd be almost no original
investors if they had no possibility of selling. An active market in parts of
companies--shares--assures the possibility of selling out when you want to.

Much of the stock market is gambling. The real winners are the
brokerages and arbitragers and high-speed traders.

They profit from the gamblers, that's true. Transactions need not cost much
more than $100 or $200 bucks, a lot lower than selling a house.

On average, the total output, productivity, wealth, income, and profit of U.S.
companies increases (in real terms) over time. The people who own a portion
of that are winners too.

Some of the increase these days escapes measurement via markets and
the price system. Tyler Cowan goes on about this at
length.

I don't see anything harmful in buying a tiny part of a company you think is
good, to gain a claim on some part of its fortunes.

It funds the pros, the Goldman Sachs ("Government Sachs") of the
world, and

That's voluntary--it only happens if you let it (i.e., day trade).

the need for showing quarterly earnings does longterm
damage to companies and jobs.

A separate problem, and not universal. I wish Barack's court followed the same
disclosure rules they impose on their subjects.

The sheer volume of people who are interested in the existing
equilibrium is orders of magnitude greater than those interested in the
facts.

It matters not who sits in that office on this subject.

Small private companies, the ones who
create American jobs, are punished by the current tax policies that
favor the money dealers and funnel money into the public-stock market.

True.

Sarbox et al have done more damage to firm creation
than anything else...

Except for new issues, the stock market is
mostly a gambling pool.

Certainly, many treat it that way. The Feds consider it one more way to
manipulate the economy (by making investors think they're richer).

Yellen is on the back of a tiger she can't get off. She doesn't dare
to do anything sensible for fear of being blamed for triggering the
next, coming crash.

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come due
eventually.

Not so much. Government debt is supposed to be eclipsed by
GDP growth. We ran up *$BILLIONS$* in WWII and by the
time 70 years have passed, a billion isn't what it used to be.

> We spent about 5 years printing 6% of GDP in phony prosperity,

Wasn't even - that "money" was parked in banks and the Fed paid interest
on it - see "Interest On Reserves."

The thing that must balance the Fed balance sheet is GDP and the
attendant tax revenue from that. Because of a long series of horrible
complexity, this violates the preference of
the available leadership.

borrowed from our future. The only question is whether we'll make monthly
installments (reductions in future growth), or have the bill come due all
at once.

So it could be that simply the availability of funds itself is
what is constraining growth.

It could be that simple. Since the Fed has not actually done anything
that can be confused with even equalizing the money supply...

James

--
Les Cargill

 

[Les Cargill]

rickman wrote:

On 8/30/2015 11:16 AM, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it
was luck, but mostly just recognizing what companies seemed to have
their act together and buying their stock. I bought Texas
Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P
500 index funds in my 401K . I also bought a little Nucor stock when
it was Nuclear Corp of America. Should have lost my ass on that, but
it turned out okay.

It is really easy to get rich, but you need to start early.

Dan

I don't think that buying established stocks, getting rich that way,
does society much good. Except for new issues, the stock market is
mostly a gambling pool.

I'm not sure how Bill Gates getting rich has done much for "society"
either.

One whale of a lot. Bill Gates asserted that "software is property" and
then acted on it.

I guess it's impossible for people to remember the world before even MSDOS.

<snip>

--
Les Cargill

 

[rickman]

On 8/30/2015 2:20 PM, John Larkin wrote:

On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:16:26 AM UTC-4, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it was luck, but mostly just recognizing what companies seemed to have their act together and buying their stock. I bought Texas Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P 500 index funds in my 401K . I also bought a little Nucor stock when it was Nuclear Corp of America. Should have lost my ass on that, but it turned out okay.

It is really easy to get rich, but you need to start early.

Dan

I don't think that buying established stocks, getting rich that way,
does society much good.

I think it does. If you had zero chance of ever selling your house you'd
have a lot more trouble buying one, getting a loan, or ever justifying the
decision.

A house has real value. People can live in it.

Most companies have real value, they make stuff or have customer bases
which are valuable to other companies.

Likewise for buying part-ownership in a company. There'd be almost no original
investors if they had no possibility of selling. An active market in parts of
companies--shares--assures the possibility of selling out when you want to.

Much of the stock market is gambling. The real winners are the
brokerages and arbitragers and high-speed traders.

There may be gamblers in the stock market, that doesn't make the stock
market gambling. I've only once made a large investment that didn't pan
out. Oddly enough that was a company I worked for. lol

I don't see anything harmful in buying a tiny part of a company you think is
good, to gain a claim on some part of its fortunes.

It funds the pros, the Goldman Sachs ("Government Sachs") of the
world, and the need for showing quarterly earnings does longterm
damage to companies and jobs. Small private companies, the ones who
create American jobs, are punished by the current tax policies that
favor the money dealers and funnel money into the public-stock market.

Sorry you feel punished. I suspect this is like your relationship with
Xilinx where you feel they should tailor their offerings to you even
though you barely buy any of their products. You also have only a tiny
part of the economy dependent on your business which may or may not be
at all like other small businesses.

Except for new issues, the stock market is
mostly a gambling pool.

Certainly, many treat it that way. The Feds consider it one more way to
manipulate the economy (by making investors think they're richer).

Yellen is on the back of a tiger she can't get off. She doesn't dare
to do anything sensible for fear of being blamed for triggering the
next, coming crash.

Wow, you are an amazing mind reader to so vividly be able to know what
others are thinking.

--

Rick

 

[amdx]

On 8/30/2015 11:12 AM, dcaster@krl.org wrote:

On Sunday, August 30, 2015 at 12:05:51 PM UTC-4, amdx wrote:


It is really easy to get rich, but you need to start early.


I got my daughter fully funding her 401K and Roth starting at 23 yrs old.



Not sure how successful I will be, but I funded my niece's Roth IRA last year. She made almost $400 baby sitting , so I funded a Roth IRA for her in that amount.

So far it seems to have had no effect. But what do you expect from a
13 year old.

Dan

Next year make her earn the funding by writing a report on the Mr.
Money Mustache Blog.

http://www.mrmoneymustache.com/2011/04/06/meet-mr-money-mustache/

Mikek


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[Bill Sloman]

On Monday, 31 August 2015 05:25:18 UTC+10, Les Cargill wrote:

rickman wrote:
On 8/30/2015 11:16 AM, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it
was luck, but mostly just recognizing what companies seemed to have
their act together and buying their stock. I bought Texas
Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P
500 index funds in my 401K . I also bought a little Nucor stock when
it was Nuclear Corp of America. Should have lost my ass on that, but
it turned out okay.

It is really easy to get rich, but you need to start early.

Dan

I don't think that buying established stocks, getting rich that way,
does society much good. Except for new issues, the stock market is
mostly a gambling pool.

I'm not sure how Bill Gates getting rich has done much for "society"
either.


One whale of a lot. Bill Gates asserted that "software is property" and
then acted on it.

I guess it's impossible for people to remember the world before even MSDOS.

snip

https://en.wikipedia.org/wiki/Disk_operating_system

I was there. At one point - around 1980- we told management that the 8086-based computer we were working on - as a communicating word processor - could sell well as a general-purpose office computer.

The sales guys looked into it, and figured that they could have sold about 150 to their usual customers. Since our hardware was a bit more powerful than the original IBM PC, and engineered for 10,000 per year production, they were probably wrong.

--
Bill Sloman, Sydney

 

[Bill Sloman]

On Monday, 31 August 2015 09:06:28 UTC+10, rickman wrote:

On 8/30/2015 3:27 PM, Les Cargill wrote:
rickman wrote:
On 8/30/2015 11:16 AM, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they
formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it
was luck, but mostly just recognizing what companies seemed to have
their act together and buying their stock. I bought Texas
Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P
500 index funds in my 401K . I also bought a little Nucor stock when
it was Nuclear Corp of America. Should have lost my ass on that, but
it turned out okay.

It is really easy to get rich, but you need to start early.

Dan

I don't think that buying established stocks, getting rich that way,
does society much good. Except for new issues, the stock market is
mostly a gambling pool.

I'm not sure how Bill Gates getting rich has done much for "society"
either.


One whale of a lot. Bill Gates asserted that "software is property" and
then acted on it.

I guess it's impossible for people to remember the world before even MSDOS.

I'm not sure what that means. Are you suggesting that without Bill
Gates we would not have Windows?

Without Xerox PARC we wouldn't have Windows. If I remember rightly, Steve Jobs copied that idea on a cheapish comnputer long before Bill Gates did his me-too.

https://en.wikipedia.org/wiki/History_of_the_graphical_user_interface

--
Bill Sloman, Sydney

 

[amdx]

On 8/30/2015 1:08 PM, John Larkin wrote:

On Sun, 30 Aug 2015 10:29:37 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 10:12:21 AM UTC-4, rickman wrote:
On 8/29/2015 11:03 PM, dcaster@krl.org wrote:
On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

It is really easy to get rich, but you need to start early.

Yes, the best way to be rich is to choose your parents wisely.

Or to actually do something, earn some money, and save it.

ttps://en.wikipedia.org/wiki/Stanford_marshmallow_experiment

To get 'rich' you have to earn, live beneath your means, and save, which
used to be common, but which today many people can't do.


I have more wealth than the total net worth of about 40% of the US
population. Anybody worth $1 does, too.

When I read that, I was thinking 40 percentile and thought, no way!
But you're correct, that shows most Americans are in debt.
I suspect your net worth is more than 95% to 97% of the US population.
That's a $1,900,000 to $3,100,000 net worth.
But, no need to respond.
Mikek

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[amdx]

On 8/30/2015 12:12 PM, John Larkin wrote:

On Sun, 30 Aug 2015 08:56:58 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Sunday, August 30, 2015 at 11:16:26 AM UTC-4, John Larkin wrote:

I don't think that buying established stocks, getting rich that way,
does society much good. Except for new issues, the stock market is
mostly a gambling pool.

I disagree with you there. Investing in the stock market does involve a little risk, but it is not much of a gamble. If you buy say ten stocks, there is almost no gamble. One or two may go belly up, but it is extremely unlikely that all will. And you will be better off than if you put your money in a savings account.

The system is a gamble, basically a casino with a house cut. Stocks
have value because other investors think they have value. Most stocks
are morally equivalent to investing in Beanie Babies.

IPOs and later rounds of new investment help companies grow. Trading
established shares don't, at least not directly.

I'd rather invest in my own company, where I can try to make sure it's
going to be productive, create products and IP and jobs.

Say that to the employees of Wang, that had there savings and
retirement tied up with the company. It's gone.
Mikek


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[amdx]

On 8/30/2015 12:13 PM, dcaster@krl.org wrote:

On Sunday, August 30, 2015 at 12:42:25 PM UTC-4, amdx wrote:

Sorry John, on this one I need you need to get educated.

In my lifetime (1955) the S&P 500 has went from 50 to 2100.
A 42* multiple, inflation is only a 9 multiple.
Just Dollar Cost Average into a low cost total stock market index, and
hold it until you near retirement, Then you need to back off on the
percentage of stocks**.
Rule #1 You can't time the market.
Rule #2 Don't panic and sell at the bottom of a market correction.

Mikek


Certainly agree with the above.



** You need to reduce stock exposure at retirement because the market
does go down and you don't want to withdraw living expenses from a
portfolio that has dropped 35%.

I do not agree with this. If you have enough you may not want to withdraw living expenses from a portfolio that has dropped 35%, but you can.

Dan

The key being, "If you have enough". The time withdraw is not when
the market is down. See rule #2.

I meant to include this URL of index graphs in the above post.
http://stockcharts.com/freecharts/historical/marketindexes.html

Mikek



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On Sunday, August 30, 2015 at 3:23:46 PM UTC-4, Les Cargill wrote:

dagmargoodboat@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:16:26 AM UTC-4, John Larkin wrote:

I don't think that buying established stocks, getting rich that way,
does society much good.

I think it does. If you had zero chance of ever selling your house you'd
have a lot more trouble buying one, getting a loan, or ever justifying the
decision.

A house has real value. People can live in it.

A company can have real value too--it can make something people want. The
ability to make (and sell) something has value, as proven by the fact that
people are willing to pay for it. (Secondarily, companies can have cash and
own assets & land.)


But 50-60-70 years ago, capital meant large heavy things that
you could inventory.

Are you sure you didn't mean "large heavy things you could *depreciate*?"

> It's much more ephemeral now.

That much today can be done without those should be boosting innovation a lot
more than is actually the case.

On the other hand it's considerably more daunting just to fill out all the
government paperwork today, and potentially disastrous to fatal if you miss
something.

A local business just got fined 2x its net worth for a technical infraction
by the EPA, a year AFTER the business closed. Of course they're the agency
whose administrator said their strategy was to crucify a victim or two, like
the Romans

http://freebeacon.com/national-security/epa-on-oil-and-gas-companies-crucify-them/

and the victim here was someone who'd opposed them.

That's the problem, or at least an aspect. The feds frighten people.

Like a company, a house can have a greatly inflated value. Houses that would
cost $200k in my world might be ten times that in yours, made of the same
materials, similar labor, and offering the same comforts.


I'll take "land position rents" for $200k, Alex. This really is a
thing.

Sure. As is the value of organizing a group of good people, and the value of
a good name, a reputation for quality, and doing what you say. All of these
have real value--can even be estimated--and factor into a company's actual
worth.

Where you can estimate these factors, you can tell if shares in a company are
reasonably-priced, or not.

Likewise for buying part-ownership in a company. There'd be almost no original
investors if they had no possibility of selling. An active market in parts of
companies--shares--assures the possibility of selling out when you want to.

Much of the stock market is gambling. The real winners are the
brokerages and arbitragers and high-speed traders.

They profit from the gamblers, that's true. Transactions need not cost much
more than $100 or $200 bucks, a lot lower than selling a house.

On average, the total output, productivity, wealth, income, and profit of U.S.
companies increases (in real terms) over time. The people who own a portion
of that are winners too.


Some of the increase these days escapes measurement via markets and
the price system. Tyler Cowan goes on about this at
length.

I don't see anything harmful in buying a tiny part of a company you think is
good, to gain a claim on some part of its fortunes.

It funds the pros, the Goldman Sachs ("Government Sachs") of the
world, and

That's voluntary--it only happens if you let it (i.e., day trade).

the need for showing quarterly earnings does longterm
damage to companies and jobs.

A separate problem, and not universal. I wish Barack's court followed the same
disclosure rules they impose on their subjects.


The sheer volume of people who are interested in the existing
equilibrium is orders of magnitude greater than those interested in the
facts.

It matters not who sits in that office on this subject.

The heck you say! I follow Obamacare closely. The lack of good information
and the geysers of misinformation and dissembling from the top are very
damaging. The People can't make good decisions without honest information.

Small private companies, the ones who
create American jobs, are punished by the current tax policies that
favor the money dealers and funnel money into the public-stock market.

True.


Sarbox et al have done more damage to firm creation
than anything else...

A lovely big-government, political response to a hobgoblin they mostly created
themselves (Enron). Auditors for the auditors, overhead for all.

And of course the government offers no such disclosures, nor meets any such
standard. (They don't list basic liabilities on their balance sheet, and
routinely lie about future prospects!)

Except for new issues, the stock market is
mostly a gambling pool.

Certainly, many treat it that way. The Feds consider it one more way to
manipulate the economy (by making investors think they're richer).

Yellen is on the back of a tiger she can't get off. She doesn't dare
to do anything sensible for fear of being blamed for triggering the
next, coming crash.

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come due
eventually.

Not so much. Government debt is supposed to be eclipsed by
GDP growth. We ran up *$BILLIONS$* in WWII and by the
time 70 years have passed, a billion isn't what it used to be.

We don't have any GDP growth to speak of, and real wages are down.

All that money 'created' is supposed to represent actual goods and services
already produced, yet those goods and services were never produced.
Therefore, people wanting to trade their dollars for goods and services
must eventually discover their vouchers can't purchase what was never
made--there's no avoiding that.

Debt's a big drag on a nation for the same reason it's a big drag on an
individual--debt service siphons off part of your earnings, making them
unavailable for investment, plus you owe interest too.

In WWII we went deep in debt to save civilization. Now we've done it...
for nothing.

We spent about 5 years printing 6% of GDP in phony prosperity,

Wasn't even - that "money" was parked in banks and the Fed paid interest
on it - see "Interest On Reserves."

That's just another failed obfuscation. Do you disagree that funds are
fungible? Or that the Ben Bernank's declared intention was to stimulate
the economy? Which he then thwarted by paying interest on reserves, making
banks billions for hiding his dirty laundry? What a web we weave...

The thing that must balance the Fed balance sheet is GDP and the
attendant tax revenue from that. Because of a long series of horrible
complexity, this violates the preference of
the available leadership.

borrowed from our future. The only question is whether we'll make monthly
installments (reductions in future growth), or have the bill come due all
at once.

So it could be that simply the availability of funds itself is
what is constraining growth.

Complicated. There are lots of extra funds due to meddling (QE), yet not
circulating due to more meddling (interest on reserves, other regs., a.k.a.
'financial repression'.)

(http://www.investopedia.com/terms/f/financial-repression.asp)

I think the panic-making arbitrariness of it all is as damaging as the stupid
policies behind it, and the spending that made it necessary.

It could be that simple. Since the Fed has not actually done anything
that can be confused with even equalizing the money supply...

Oh, I think it's simpler than that. Businesses plainly see that all this
spending and debt represent future taxes, lower earnings and growth, and
are planning accordingly.

That's what happens when someone borrows a lot of money on your behalf that
you'll soon have to start paying off over time, and the shell games don't
change it.

Cheers,
James Arthur

 

[rickman]

On 8/30/2015 3:49 PM, amdx wrote:

On 8/30/2015 1:08 PM, John Larkin wrote:
On Sun, 30 Aug 2015 10:29:37 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 10:12:21 AM UTC-4, rickman wrote:
On 8/29/2015 11:03 PM, dcaster@krl.org wrote:
On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they
formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

It is really easy to get rich, but you need to start early.

Yes, the best way to be rich is to choose your parents wisely.

Or to actually do something, earn some money, and save it.

ttps://en.wikipedia.org/wiki/Stanford_marshmallow_experiment

To get 'rich' you have to earn, live beneath your means, and save, which
used to be common, but which today many people can't do.


I have more wealth than the total net worth of about 40% of the US
population. Anybody worth $1 does, too.


When I read that, I was thinking 40 percentile and thought, no way!
But you're correct, that shows most Americans are in debt.
I suspect your net worth is more than 95% to 97% of the US population.
That's a $1,900,000 to $3,100,000 net worth.
But, no need to respond.

If that debt is offset by property that secures the debt, it is still a
net positive wealth by the equity.

--

Rick

 

[amdx]

On 8/30/2015 12:20 PM, John Larkin wrote:

On Sun, 30 Aug 2015 11:42:15 -0500, amdx <nojunk@knology.net> wrote:

On 8/30/2015 10:16 AM, John Larkin wrote:
On Sat, 29 Aug 2015 20:03:43 -0700 (PDT), "dcaster@krl.org"
dcaster@krl.org> wrote:

On Saturday, August 29, 2015 at 8:33:06 PM UTC-4, John Larkin wrote:

The rich don't get rich by being "allowed" to get rich, they formulate
a plan, take the reins, and drive relentlessly toward their goal, a
la: "Damn the torpedos, full speed ahead."

I got rich by buying stocks instead of buying new cars. Some of it was luck, but mostly just recognizing what companies seemed to have their act together and buying their stock. I bought Texas Instruments, John Fluke, IBM, Hexcel, and others. And bought S & P 500 index funds in my 401K . I also bought a little Nucor stock when it was Nuclear Corp of America. Should have lost my ass on that, but it turned out okay.

It is really easy to get rich, but you need to start early.


Dan


Except for new issues, the stock market is
mostly a gambling pool.


Sorry John, on this one I need you need to get educated.

In my lifetime (1955) the S&P 500 has went from 50 to 2100.
A 42* multiple, inflation is only a 9 multiple.

Sure, but stocks have a higher value mostly because other shareholders
think they do. Some popular stocks are in companies that don't make
money and probably never will.


Just Dollar Cost Average into a low cost total stock market index, and
hold it until you near retirement, Then you need to back off on the
percentage of stocks**.
Rule #1 You can't time the market.

Sometimes you can.

Yep, I get a newsletter, the writer told me to sell on Feb 11, 2000.
The market peaked within 30 days and dropped 70%, before increasing
again. But the writer suggested getting back in way to early and totally
missed the 2007 downturn. No one calls the ups and downs with any
consistency.

Rule #2 Don't panic and sell at the bottom of a market correction.

Agree on that one.



Mikek


* Doesn't include dividends.

Dividends used to be the main reason to hold stocks. That's less
common now, mostly because dividends are double taxed. That's why
there are buybacks and such.


** You need to reduce stock exposure at retirement because the market
does go down and you don't want to withdraw living expenses from a
portfolio that has dropped 35%.
You then with draw from bonds or other fixed income assets.

Here's a neat program that uses historical stock market returns to
see if your portfolio will have money until you die.
It starts with your portfolio, spending rate and inflation, (other
data can be included*) Then, it makes, say a 30 year run from 1900 to
1930. Then repeats that from 1901 to 1931, On and on until it runs 1985
to 2015. If your money goes below zero dollars on any 30 year run, you
need more money.
Of course, previous returns have no bearing on the future, but,
unless you think the stock market will change it's return
during your retirement, it's a neat test of your portfolio.
http://www.firecalc.com/

* you can add when and how much SS income, any pension income, spending
can increase with inflation and several other options can be included.



What dissapoints me is that our capital-intensive economy favors the
people who can invest, and greatly favors the wheeler-dealers and
brokerages, and destroys small companies and working-class jobs.
Because Wall Street runs Washington.

The big political movers these days seem to be ex-speculators
(including ex-Nazis) and former hedge fund managers, parasites in my
book.

---
This email has been checked for viruses by Avast antivirus software.
http://www.avast.com

 

[amdx]

On 8/30/2015 1:20 PM, John Larkin wrote:

I don't think that buying established stocks, getting rich that way,
does society much good.

Unless you want to count the millions of people that have retirement
funds because they have a 401k, IRA or pension that was invested in the
stock market. I think that does society much good.

Mikek


---
This email has been checked for viruses by Avast antivirus software.
http://www.avast.com

 

[M Philbrook]

In article <e1599c05-fd7d-4308-b3b1-b7d8ac6e90c4@googlegroups.com>,
dcaster@krl.org says...

apartment for a year while I worked an engineering job and also built a house evenings and weekends.



Then since I had no mortgage, I saved 12% of my salary in my 401k plan for the next twenty years. A Dutch Uncle would have been nice, but it is not a requirement.


I did stay married and had one child. When he was one , I started a college fund for him with $1,000. And every year I contributed another $1,000. But after about four or five years , I started only putting in enough money so that the amount in the fund was the same in thousands as his age. And in another year or so , I did not have to contribute anything. When he went to college, I paid what I could out current income, and used money from his college account for
the rest. When he graduated , he still had $65,000 in his account.

Dan
So, how old was he when he started college?

For some reason the math does not add up? Maybe I should be a
banker and roll some numbers to fake the customer out..

Jamie

 

[M Philbrook]

In article <185b7e81-0603-4326-a1d4-1f4fe02ca475@googlegroups.com>,
dcaster@krl.org says...

On Sunday, August 30, 2015 at 12:08:55 PM UTC-4, DecadentLinuxUserNumeroUno

Yet another failure to hear those helicopter blades whooshing
overhead.

Must be because they were MILES over your head.

I think it was because they were over your head.

Dan

Actually, they were just below the jaw, it's our misfortune that
he got alerted.

Jamie