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If you have the patience of a saint and wait for the right time to invest for the long haul and then hold until the fat lady sings then this room is for you. Meet others here who are looking to buy low and sell high!

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Comment by Claire Gougeon on June 6, 2020 at 12:52am

Unable to reply to the general discussion so posting here for now. I can't keep up! So much to watch, and read. The Century of the self is interesting, I'm halfway through.

The labour force participation rate was surprising to me. Every person over 15 is quite the labour market denominator! I would personally allow the 90 year olds off the hook :D But yes, labour force participation has been decreasing for decades now, and it looks like predominantly the effect of the aging population. Though full-time students take a chunk too. I can't find more in-depth statistics for the States, but here's a pretty good analysis from Canada, where we've seen the same general trend: 

http://www.rbc.com/economics/economic-reports/pdf/other-reports/Can... from 2014. It is a global phenomenon.  Looks like a poor indicator of unemployment, but is more important, I believe, as it's tracking one of the key deflationary factors that are increasingly influencing the economy. It's interesting to hear Larry Fink compared the economy to a patient in surgery. Emergency stabilization. And he acknowledges that the consequences have yet to occur. Doesn't want to think about it yet.

I hope that people in positions of authority are forward thinking about it, but so far there hasn't been any honest conversation with the public.

I understand that other readers have a far more distrustful view of authority/government than I do. Your belief is that the virus is an excuse or was released in order for the current elite to maintain their position of power? That they will continue to inflate the non-market until the election? In order to keep Trump in power? Or switch to Biden?  

Comment by Steven Vincent on May 28, 2020 at 10:58am

Hi Claire.  Thanks for posting.  Yes, the only room that is actually in use on the site now is the BullBear Traders room.  Please feel free to repost your excellent comments there!

https://www.thebullbear.com/group/bullbeartradingservice

Comment by Claire Gougeon on May 28, 2020 at 10:15am

Back to the question of what to invest in for the long haul. Two months ago I was satisfied with my investment strategy. Then I began to doubt it. And now, well, complete mistrust.

I feel like the contented homeowner who hears a pop or drip downstairs and when they go to inspect it, discover that not only is the foundation damaged beyond repair, but the deterioration needed attention 10 or 20 years ago! Yeah, my house is still standing, heat’s running, but I am urgently looking for a new one. (I don’t own a house. I live in a van. My investments are my house).

I'm fine not earning 10% returns. People should be well-compensated for productive work, not just for having money. A small reward for having saved. 1%? Bonds! In which countries? Not just Canada. Investing in the best players in this open market global economy: the countries in the least debt? 

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Oh look! A list of my favourite countries. These ROIs are abysmal. Maybe because they're not inflated. Having my investments in something that isn't inflated is a good start, as we head into a deflationary correction. Some are even slightly negative! Is that how bad things have become? This is an accurate snapshot of reality?

It's very possible.

I wish I could invest my US dollars in some of the foreign government bonds from the above list, but I looked into it. There isn't an easy way to do it and even if it was possible, the cost may be prohibitive for my little nest egg.

I don’t trust US cash due to the risk of inflation, although cash in general will be fine during the coming deflation, the US is in the red and the Fed's plan is unlimited spending. Doesn't seem like an ideal strategy for any business in that position. On the current trajectory, the US will go into default and hyperinflation will ensue once the government’s currency is no longer trusted.

I wonder if I hold cash in the currencies of those countries, I wonder if that would be a low-cost equivalent to holding these foreign bonds. That's my favourite long-term investment strategy that I've come up with so far. In the meantime, gambling in the backwards-rigged casino that the stock market has become has been fun. I'd never do it if I didn't have Steven watching my back.

Comment by Claire Gougeon on May 28, 2020 at 1:39am

The field is open. The first country to direct its resources efficiently wins! Which country will come out ahead? The one which has done the best job of investing in enterprising critical thinkers (healthy pregnancies, supported parents, school/education)? This isn’t just a question of money, though that’s part of the equation. It’s about efficiently nurturing key aspects of human development.

A country with an attitude of sufficiency (the opposite of scarcity, not sure what the word is) freedom from excessive spending and debt. A culture that values pursuit of one’s passion, personal development, and 10 other things before financial security, and that financial security comes from principle-based spending, not accumulation of wealth. 

Open-source knowledge sharing is a free tool that can capitalize on the returns of the wealth of human resource investment that the country has made in past decades. Countries who have the largest educated populations well-connected by internet will be at an advantage in this human capital economy whose wealth distribution have allowed the largest population possible to participate in the open market of creativity and innovation. Size matters. Countries that combine forces, that open trade and, more importantly, are open-minded and adopt each other’s cultural strengths will be competitive. Most importantly, a stable, strong and successful democracy. The political equivalent of a free market, with equal opportunity and functioning reward and punishment feedback loops for effective vs ineffective governance.

These are elements of the country/culture that will win the long game. That’s where I want to place my bet. The big losers will be those that lack a functioning democracy, with distorted feedback loops creating, for example, inefficient wealth accumulation and high debt loads.

A country that has a solid politically democratic history in combination with an effective socialist economy. Not communism, not capitalism. Sorry USA and China. (Just kidding, who knows? Not on their current trajectories, though).

Maybe now that each country is self-isolating, each of us will be able to take a look at the direction we’re headed in. Maybe there’s been too much groupthink going on in this global economy.

Comment by Claire Gougeon on May 28, 2020 at 1:39am

The room is empty, I can get up on my soapbox and rant unselfish-consciously to my heart's desire.

A month ago, I was beginning to doubt my investment strategy. The month before that, I was a confident ETF passive investor. What changed was 10% market volatility and 90% free time. I got laid off in late March. To pass the time, I informally started researching the economic impact of the coronavirus. Google sent me to one of Steven Vincent's postings and I got hooked on Seeking Alpha for the following month. After reading over a hundred articles, I'm now convinced that I'm going to see the end of the current, fiat currency, growth-based economic model in my lifetime. Passive investing is not going to cut it. You vote with every dollar you spend. I don't believe in the current system. It's not efficient, it's not conducive to human progress, and it's not well-suited to the direction that we're headed in.

Decreasing population, environmental limits, technological advance and decreasing need for labour hours spent on mundane tasks. We're heading for deflation.

With the highest debt in history on board.

As a long-term investor, how do I select positions that will do well through the collapse of our century plus old economic system? To further restrict an already non-existent list of options, I'm not willing to invest in something I don't agree with or believe in. 

Maybe the status quo will continue for years or decades longer. The market can stay irrational longer than you can stay solvent, but the sooner we get a reality check the better. The concentration of wealth and the damage that has on productivity, the masking of the measures of success and failure (forbidding bankruptcy and providing blanket salvation that benefits inefficient players the most), directing public funds to distort the free market, distortion funnelling the idea of money into storefront ideas of companies… all of this is a lit match in a forest of debt and decelerating inflation.

Small businesses, start-ups, as well as the smallest common denominator: passionate, enterprising individuals (listed in descending order of size/ascending order of innovation? If so, coincidence?) are starved of resources. This is precisely what not to do to develop and progress. 

It looks to me like the growth-based economic system has outgrown (groan) its use. If free market forces had been allowed to act normally, we would have functioning signals indicating that economic growth had begun stagnating in the past 20 years, worsened in the last 10, and we would be problem-solving ways of dealing with it. 

We would be questioning the allocation of resources and asking ourselves how Canada (US, enter your home country here) can remain competitive in a global economy that may look very different a short time from now.

I'm probably misusing the term "economic growth". I thought that it consisted of innovations that spur long-term improvements to quality of life and that transform/impact society decades into the future. But apparently I'm wrong and it's actually debt. I'm going to stick with my definition, which is also different than wealth accumulation. Wealth is a tool to release creativity. We want to direct wealth efficiently. Especially because it’s becoming more scarce. (But we can’t tell because we’re in a financial bubble right now. And that’s bad for economic planning. And for transitioning into a system that will make economic growth possible once more. I digress.) 

 

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