QuoteChange in worth by household category
Link to table (http://apps.washingtonpost.com/g/page/business/change-in-worth-by-household-category/113/)
A new study shows that wealth disparity has been accelerating in the two years since the recession ended. The study by the Pew Research Center underscored other data showing that the economic growth that has followed the Great Recession has benefited mainly those at the top. View the change in household worth from 2009 to 2011. Source: Pew Research Center tabulations of Survey of Income and Program Participation wealth data.
Well then...
So people should save more.
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I thought that all happened prior to 2009.
Quote from: merithyn on April 23, 2013, 02:03:38 PM
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I thought that all happened prior to 2009.
According to this, looks like we bottomed in 2011, though yes biggest decline was before '09.
http://www.fool.com/investing/general/2013/03/21/us-home-prices-rise-to-2009-levels.aspx
Quote from: garbon on April 23, 2013, 02:07:31 PM
Quote from: merithyn on April 23, 2013, 02:03:38 PM
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I thought that all happened prior to 2009.
According to this, looks like we bottomed in 2011, though yes biggest decline was before '09.
http://www.fool.com/investing/general/2013/03/21/us-home-prices-rise-to-2009-levels.aspx
So while that may have been part if it, it certainly wasn't all of it. Something else is causing that disparity.
Quote from: merithyn on April 23, 2013, 02:09:34 PM
Quote from: garbon on April 23, 2013, 02:07:31 PM
Quote from: merithyn on April 23, 2013, 02:03:38 PM
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I thought that all happened prior to 2009.
According to this, looks like we bottomed in 2011, though yes biggest decline was before '09.
http://www.fool.com/investing/general/2013/03/21/us-home-prices-rise-to-2009-levels.aspx
So while that may have been part if it, it certainly wasn't all of it. Something else is causing that disparity.
Here's another article. This one does blame a large portion of it on housing.
http://money.cnn.com/2012/06/11/news/economy/fed-family-net-worth/index.htm
Looks like it also points out falling incomes/rates of saving.
Fun Fed report in that link too.
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I agree that this chart is highly distorted by real estate values. My mom, for instance, is in the second-highest bracket due to her house, but only makes about $30k/year as a head custodian for an elementary school.
That said, the 2009 column is after people's house net worth deflated. The delta between the columns should include a slight rise in property value.
Quote from: merithyn on April 23, 2013, 02:09:34 PM
Quote from: garbon on April 23, 2013, 02:07:31 PM
Quote from: merithyn on April 23, 2013, 02:03:38 PM
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I thought that all happened prior to 2009.
According to this, looks like we bottomed in 2011, though yes biggest decline was before '09.
http://www.fool.com/investing/general/2013/03/21/us-home-prices-rise-to-2009-levels.aspx
So while that may have been part if it, it certainly wasn't all of it. Something else is causing that disparity.
WHITE FOLKS' GREED RUNS A WORLD IN NEED
Quote from: Admiral Yi on April 23, 2013, 01:38:45 PM
So people should save more.
There you go! Problem solved.
Unless of course you are already living paycheck to paycheck.
Quote from: fahdiz on April 23, 2013, 02:35:22 PM
Quote from: Admiral Yi on April 23, 2013, 01:38:45 PM
So people should save more.
There you go! Problem solved.
Unless of course you are already living paycheck to paycheck.
Pfft, come on that's just ridiculous, next you'll be telling us the majority of household sometimes face unexpected extra expenditures. Or that in a recession peoples circumstances can suddenly change. :rolleyes:
Quote from: merithyn on April 23, 2013, 02:09:34 PM
Quote from: garbon on April 23, 2013, 02:07:31 PM
Quote from: merithyn on April 23, 2013, 02:03:38 PM
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I thought that all happened prior to 2009.
According to this, looks like we bottomed in 2011, though yes biggest decline was before '09.
http://www.fool.com/investing/general/2013/03/21/us-home-prices-rise-to-2009-levels.aspx
So while that may have been part if it, it certainly wasn't all of it. Something else is causing that disparity.
Debt. With interest rates at historic lows consumers have been piling on debt.
Quote from: fahdiz on April 23, 2013, 02:35:22 PM
There you go! Problem solved.
Unless of course you are already living paycheck to paycheck.
Depends how you define the problem. If you see the problem being that people with no disposable income aren't saving, as you point out there is no solution. If the problem is that people with disposable income are experiencing a decrease in net assets, they should start saving more or borrowing less.
Quote from: Admiral Yi on April 23, 2013, 02:51:36 PM
Quote from: fahdiz on April 23, 2013, 02:35:22 PM
There you go! Problem solved.
Unless of course you are already living paycheck to paycheck.
Depends how you define the problem. If you see the problem being that people with no disposable income aren't saving, as you point out there is no solution. If the problem is that people with disposable income are experiencing a decrease in net assets, they should start saving more or borrowing less.
Couldn't it be both problems?
Quote from: fahdiz on April 23, 2013, 02:55:04 PM
Quote from: Admiral Yi on April 23, 2013, 02:51:36 PM
Quote from: fahdiz on April 23, 2013, 02:35:22 PM
There you go! Problem solved.
Unless of course you are already living paycheck to paycheck.
Depends how you define the problem. If you see the problem being that people with no disposable income aren't saving, as you point out there is no solution. If the problem is that people with disposable income are experiencing a decrease in net assets, they should start saving more or borrowing less.
Couldn't it be both problems?
Well, that and their assets have gone net negative.
Common motto: get rich or bitch while not trying.
Quote from: Barrister on April 23, 2013, 02:48:21 PM
Debt. With interest rates at historic lows consumers have been piling on debt.
:yeahright: Maybe the interest rates are driven that low precisely because people aren't piling on debt.
Quote from: fahdiz on April 23, 2013, 02:55:04 PM
Couldn't it be both problems?
There could be an infinite number of problems. Your previous post suggested you saw it as single problem.
Quote from: merithyn on April 23, 2013, 02:09:34 PM
Quote from: garbon on April 23, 2013, 02:07:31 PM
Quote from: merithyn on April 23, 2013, 02:03:38 PM
Quote from: garbon on April 23, 2013, 01:39:38 PM
Of course, by that the rich consist of 13% of households in the US.
Also how far off is that most recent commenter who pointed out that a large part of many people's networth had been their homes whose worth then tanked?
I thought that all happened prior to 2009.
According to this, looks like we bottomed in 2011, though yes biggest decline was before '09.
http://www.fool.com/investing/general/2013/03/21/us-home-prices-rise-to-2009-levels.aspx
So while that may have been part if it, it certainly wasn't all of it. Something else is causing that disparity.
According to the article linked to the table you posted ...
QuoteThe biggest difference between the most affluent group and everyone else, Pew said, is that the wealthiest households have their assets concentrated in stocks and other financial instruments, while others' wealth is concentrated in their homes.
Both stock and home values were pummeled during the recession. But in the recovery, stock values have rebounded nicely and have reached new highs. Housing values — particularly for those living in nonexclusive areas — have stayed mostly flat, although there have been some stirrings of a recovery in the past year.
Bottom line: the "rich" diversify asset classes (real estate
plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Quote from: Admiral Yi on April 23, 2013, 03:14:20 PM
Quote from: fahdiz on April 23, 2013, 02:55:04 PM
Couldn't it be both problems?
There could be an infinite number of problems. Your previous post suggested you saw it as single problem.
No, no - I'm quite aware there are multiple problems. I was responding to your post, which seemed to suggest there was one solution.
Stocks and real estate snapped up at bargain prices the past few years. Quantitative easing and government aid to boost these assets. Rents rose and vacancy rates declined. Who has/had the cash+financing to get the bargains that have now significantly appreciated? Rich people.
Change We Can Believe In. Forward.
Quote from: Phillip V on April 23, 2013, 04:57:34 PM
Stocks and real estate snapped up at bargain prices the past few years. Quantitative easing and government aid to boost these assets. Rents rose and vacancy rates declined. Who has/had the cash+financing to get the bargains that have now significantly appreciated? Rich people.
Change We Can Believe In. Forward.
Well, from the article, it is more like "rich" and "not-rich" alike took a bath on real estate - but when the stock market recovered and real estate stayed flat, this benefited the "rich" more.
Quit sounding like class warfare warriors, people. It's un-American.
Quote from: CountDeMoney on April 23, 2013, 05:03:29 PM
Quit sounding like class warfare warriors, people. It's un-American.
I wasn't. :unsure:
Quote from: garbon on April 23, 2013, 05:06:09 PM
Quote from: CountDeMoney on April 23, 2013, 05:03:29 PM
Quit sounding like class warfare warriors, people. It's un-American.
I wasn't. :unsure:
You mentioned falling incomes. It's a known fact that concept doesn't exist. Incomes don't fall; people simply become lazier.
:huh:
The house prices have been skyrocketing back up too.
Quote from: MadImmortalMan on April 23, 2013, 05:11:56 PM
The house prices have been skyrocketing back up too.
If the theory in the article is correct, this should even out the difference. Assuming house prices are skyrocketing at a rate no less than the stock market.
It looks to me like spike in house prices is very localized. Just a few markets.
Fuck it, I'm going out for smokes. Maybe play some scratch offs.
Quote from: Admiral Yi on April 23, 2013, 05:24:00 PM
It looks to me like spike in house prices is very localized. Just a few markets.
Yes it is. Mostly the markets that were hardest-hit by the bubble.
If it does get back to even I don't expect it to keep skyrocketing, because the main reason for the undersupply that's causing prices to rise is the fact that so many properties are underwater. Once that condition goes away, lots of "trapped" inventory will be able to float again.
Quote from: Malthus on April 23, 2013, 03:23:15 PM
Bottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Not predictably enough, actually. Diversification doesn't really "ensure" high return. It "ensures" optimal return for the level of risk taken, with that return in reality being about average. If you're not diversified, your asset value can make a huge jump not just down, but also up.
Quote from: DGuller on April 23, 2013, 05:57:44 PM
Quote from: Malthus on April 23, 2013, 03:23:15 PM
Bottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Not predictably enough, actually. Diversification doesn't really "ensure" high return. It "ensures" optimal return for the level of risk taken, with that return in reality being about average. If you're not diversified, your asset value can make a huge jump not just down, but also up.
Unfortunately for everyone the asset that most were holding - real estate - went down not up.
Quote from: Malthus on April 23, 2013, 03:23:15 PM
According to the article linked to the table you posted ...
QuoteThe biggest difference between the most affluent group and everyone else, Pew said, is that the wealthiest households have their assets concentrated in stocks and other financial instruments, while others' wealth is concentrated in their homes.
Both stock and home values were pummeled during the recession. But in the recovery, stock values have rebounded nicely and have reached new highs. Housing values — particularly for those living in nonexclusive areas — have stayed mostly flat, although there have been some stirrings of a recovery in the past year.
Bottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
This falls in line with what fahdiz said. Basically, only the rich had the money in order to buy the stocks. In general, people use buying stocks as a place to park their savings. If you're living paycheck to paycheck or you need to have your money in an easier-access account, stocks just aren't an option. So, it was, if not impossible highly improbable that middle-class Americans would have been in a position to benefit from this.
Meri, not really sure that living paycheck to paycheck describes your typical middle class household.
Quote from: Admiral Yi on April 23, 2013, 01:38:45 PM
So people should save more.
Savings come out of income. And middle class income is stagnating as well.
Quote from: merithyn on April 23, 2013, 06:27:03 PM
So, it was, if not impossible highly improbable that middle-class Americans would have been in a position to benefit from this.
:huh: I'm very middle class and am benefiting from it-- at least my 401k is.
Quote from: The Minsky Moment on April 23, 2013, 06:36:25 PM
Savings come out of income. And middle class income is stagnating as well.
Either they can save more or they can expect their net worth to stagnate.
Quote from: Admiral Yi on April 23, 2013, 06:45:05 PM
Quote from: The Minsky Moment on April 23, 2013, 06:36:25 PM
Savings come out of income. And middle class income is stagnating as well.
Either they can save more or they can expect their net worth to stagnate.
So you have stock markets at near historic highs, built in part on the back of a unprecedented consumer boom. And now you're advocating people take their money 'out' of the economy, so they can rebuild their assets; what could possibly go wrong ?
Quote from: CountDeMoney on April 23, 2013, 05:28:00 PM
Fuck it, I'm going out for smokes. Maybe play some scratch offs.
Use that money to buy Toaster Studel.
We have an unprecedented consumer boom?
Quote from: MadImmortalMan on April 23, 2013, 06:54:26 PM
We have an unprecedented consumer boom?
Note past tense.
How else would you describe that surprising change over the last 30+ years in one aspect of the economy ?
Quote from: mongers on April 23, 2013, 06:49:12 PM
So you have stock markets at near historic highs, built in part on the back of a unprecedented consumer boom. And now you're advocating people take their money 'out' of the economy, so they can rebuild their assets; what could possibly go wrong ?
Why are you addressing this question to me, rather than Meri, who is the one who raised a concern about decreasing net worth?
Every single economic choice has negative and positive repercussions. Savings rate is not unique in that regard.
Quote from: mongers on April 23, 2013, 06:56:29 PM
Quote from: MadImmortalMan on April 23, 2013, 06:54:26 PM
We have an unprecedented consumer boom?
Note past tense.
How else would you describe that surprising change over the last 30+ years in one aspect of the economy ?
Oh I thought you meant right now. Carry on.
Quote from: MadImmortalMan on April 23, 2013, 05:11:56 PM
The house prices have been skyrocketing back up too.
That's my one economic bright side right now - if I sold my house today, it'd go for approximately $50K more than what I paid for it.
Hookers and blow on heterodiz.
No fatties plz bro.
Quote from: Admiral Yi on April 23, 2013, 07:13:04 PM
Hookers and blow on heterodiz.
No fatties plz bro.
Maybe just one hooker and one line. I may need the rest to live on for a while.
Quote from: fahdiz on April 23, 2013, 07:14:30 PM
Quote from: Admiral Yi on April 23, 2013, 07:13:04 PM
Hookers and blow on heterodiz.
No fatties plz bro.
Maybe just one hooker and one line. I may need the rest to live on for a while.
if you buy several hookers you can rent them out at a profit. Investing!
Quote from: HVC on April 23, 2013, 07:15:49 PM
Quote from: fahdiz on April 23, 2013, 07:14:30 PM
Quote from: Admiral Yi on April 23, 2013, 07:13:04 PM
Hookers and blow on heterodiz.
No fatties plz bro.
Maybe just one hooker and one line. I may need the rest to live on for a while.
if you buy several hookers you can rent them out at a profit. Investing!
:D Pimpin' in the New Economy!
Pimpin ain't easy.
Quote from: Ed Anger on April 23, 2013, 07:18:31 PM
Pimpin ain't easy.
but you get to wear flashy cloths and carry a pimp cane, so there's some pluses.
Quote from: HVC on April 23, 2013, 07:15:49 PM
if you buy several hookers you can rent them out at a profit. Investing!
There's no guarantee that you'll make a return. All entrepeneurship involves risk. :nerd:
Quote from: Admiral Yi on April 23, 2013, 07:23:12 PM
Quote from: HVC on April 23, 2013, 07:15:49 PM
if you buy several hookers you can rent them out at a profit. Investing!
There's no guarantee that you'll make a return. All entrepeneurship involves risk. :nerd:
he can at least test the merchandise :D
Or alternatively
Only you could ruin pimping with economic facts
Gross
Quote from: Ed Anger on April 23, 2013, 07:27:09 PM
Gross
you gotta do at least on test run. Can't pimp substandard product. You have an image to uphold.
Still gross
Quote from: Ed Anger on April 23, 2013, 07:28:32 PM
Still gross
did you try the wine before you bought the vineyard?
Quote from: HVC on April 23, 2013, 07:30:32 PM
Quote from: Ed Anger on April 23, 2013, 07:28:32 PM
Still gross
did you try the wine before you bought the vineyard?
Well, sure, but nobody else stuck their dicks in the wine 20 minutes before that.
Hopefully.
Quote from: fahdiz on April 23, 2013, 07:31:27 PM
Quote from: HVC on April 23, 2013, 07:30:32 PM
Quote from: Ed Anger on April 23, 2013, 07:28:32 PM
Still gross
did you try the wine before you bought the vineyard?
Well, sure, but nobody else stuck their dicks in the wine 20 minutes before that.
Hopefully.
you clearly never been at a vineyard before :D
I rape each barrel.
Quote from: merithyn on April 23, 2013, 06:27:03 PMThis falls in line with what fahdiz said. Basically, only the rich had the money in order to buy the stocks. In general, people use buying stocks as a place to park their savings. If you're living paycheck to paycheck or you need to have your money in an easier-access account, stocks just aren't an option. So, it was, if not impossible highly improbable that middle-class Americans would have been in a position to benefit from this.
I was investing in the stock market at age 18 as an enlisted kid in the army, I didn't exactly have a big paycheck. Since then I've consistently bought into the market (I continued buying happily during 2008, knowing I was getting historical low prices), and have done very well for myself.
Quote from: The Minsky Moment on April 23, 2013, 06:36:25 PMSavings come out of income. And middle class income is stagnating as well.
Middle class income has been stagnant for a long time, but to a degree I'm not always convinced this is a problem. Namely because I do not believe quality of life is stagnant. The average hourly wage, at least according to the BLS, has barely changed in real terms since the 1960s. Would anyone here argue that quality of life is not
significantly higher in 2013 for the average wage earner than it was in 1964?
Cars are a good example, the average price in real dollars for a new car steadily went up until the early 2000s but has mostly gone down since then. Further, a significant portion of the rise since the mid-90s has been more expensive cars being purchased by the affluent affecting the average. The real price of entry level new cars has gone down in real dollars, and further an entry level car today has innumerable more safety, comfort, and performance features versus a top of the line Mercedes in 1980, let alone 1964.
We have more disposable income for average wage earners today, with disposable income spent on food falling from over 50% in the 50s to under 35% today. Homeownership rates, even after the recent troubles are still higher than in 1964.
Housing (owning and renting), healthcare, and education cost more, though. I'm not sure about cars, really.
Well, that's not really a suprise, especially if you consider that the "rich" here are the entire 13% top chunk.
These people are succesful professionals who most likely managed to keep their jobs during the recession, because these jobs are hardest to oursource/replace. So it's not a surprise that their net worth managed to grow.
Quote from: Malthus on April 23, 2013, 03:23:15 PMBottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Is my explanation (which, it seems, noone else brought up) wrong though? Sometimes the explanation is pretty simple - the most succesful people simply kept their jobs and managed both to save and increase their income during the recession, whereas the middle and lower classes were sacksed or had their pay reduced.
Maybe it's different in the US, but here in Poland, in my circle of friends, only the highest earners managed to stay in their jobs from pre-2008. Almost everybody else either was fired, and/or had to switch for a less paying job.
For example, I do not own stocks (too much hassle to invest individually, with our confidentiality procedures, and I don't trust investment firms). All my investment is pretty much deposits and real estate (two flats in Warsaw and some land god only knows where in the Eastern Poland), yet my net worth managed to grow despite prices of flats decreasing.
My net worth rose exponentialy since 2008 :smarty:
Of course, I started from -$16K and graduated from College and got a job in that time.
Quote from: Martinus on April 24, 2013, 01:56:43 AM
Is my explanation (which, it seems, noone else brought up) wrong though? Sometimes the explanation is pretty simple - the most succesful people simply kept their jobs and managed both to save and increase their income during the recession, whereas the middle and lower classes were sacksed or had their pay reduced.
:huh:
Quote from: DGuller on April 23, 2013, 05:57:44 PM
Quote from: Malthus on April 23, 2013, 03:23:15 PM
Bottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Not predictably enough, actually. Diversification doesn't really "ensure" high return. It "ensures" optimal return for the level of risk taken, with that return in reality being about average. If you're not diversified, your asset value can make a huge jump not just down, but also up.
I said "done better", not "ensure a high return". :huh:
"Better" than putting all your investment eggs in one asset class - real estate. This is a more risky strategy and yes, it is entirely predictable that lack of diversification is likely, over time, to encounter exactly this problem.
Sure, it is possible fpr the gambler to get lucky. It is however most improbable for the gambler to stay
consistently lucky over time. It is of course not certain, but yes, it is "predictable" as in being the most likely outcome - the longer your time horizon, the more "predictable" the outcome becomes.
Quote from: Martinus on April 24, 2013, 01:56:43 AM
Quote from: Malthus on April 23, 2013, 03:23:15 PMBottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Is my explanation (which, it seems, noone else brought up) wrong though? Sometimes the explanation is pretty simple - the most succesful people simply kept their jobs and managed both to save and increase their income during the recession, whereas the middle and lower classes were sacksed or had their pay reduced.
Maybe it's different in the US, but here in Poland, in my circle of friends, only the highest earners managed to stay in their jobs from pre-2008. Almost everybody else either was fired, and/or had to switch for a less paying job.
For example, I do not own stocks (too much hassle to invest individually, with our confidentiality procedures, and I don't trust investment firms). All my investment is pretty much deposits and real estate (two flats in Warsaw and some land god only knows where in the Eastern Poland), yet my net worth managed to grow despite prices of flats decreasing.
The figures in the OP track "wealth", not "income", so one can't evaluate your theory based on the OP alone.
Obviously the two are going to be related, as (most) can't gather wealth without income - but the relationship is not 1:1. "Wealth" speaks more immediately to what one spends one's income on.
As for investments, I tend to use do-it-yourself places like ING Direct to park some in low-fee mutual funds.
Quote from: Malthus on April 24, 2013, 08:26:06 AM
Quote from: DGuller on April 23, 2013, 05:57:44 PM
Quote from: Malthus on April 23, 2013, 03:23:15 PM
Bottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Not predictably enough, actually. Diversification doesn't really "ensure" high return. It "ensures" optimal return for the level of risk taken, with that return in reality being about average. If you're not diversified, your asset value can make a huge jump not just down, but also up.
I said "done better", not "ensure a high return". :huh:
"Better" than putting all your investment eggs in one asset class - real estate. This is a more risky strategy and yes, it is entirely predictable that lack of diversification is likely, over time, to encounter exactly this problem.
Sure, it is possible fpr the gambler to get lucky. It is however most improbable for the gambler to stay consistently lucky over time. It is of course not certain, but yes, it is "predictable" as in being the most likely outcome - the longer your time horizon, the more "predictable" the outcome becomes.
:huh: I thought we were talking about the growth of assets? Over the last couple of years?
Quote from: Malthus on April 24, 2013, 08:33:01 AM
As for investments, I tend to use do-it-yourself places like ING Direct to park some in low-fee mutual funds.
Here it became CapitalOne360. :x
Aside from everything else, I don't think it's unreasonable to conclude net worth isn't really a great measure of what I think meri and her ilk are trying to say.
I know many people with very high incomes, who have lots of expensive toys, live in an expensive house etc who do not have a positive net worth. Generally higher income people should not get in such a situation, but some do. So on one hand there are individuals many would consider "rich" who might have negative net worth. Then, there are individuals who might have positive net worth (older people who have long since paid off a home, that has appreciated substantially over the years, as an example) who most would not consider "rich" because they do not have a very high income and don't buy expensive consumer products, don't "live rich" or etc.
Quote from: DGuller on April 24, 2013, 09:09:14 AM
Quote from: Malthus on April 24, 2013, 08:26:06 AM
Quote from: DGuller on April 23, 2013, 05:57:44 PM
Quote from: Malthus on April 23, 2013, 03:23:15 PM
Bottom line: the "rich" diversify asset classes (real estate plus equities, etc.); the "non-rich" who own assets, mostly own real estate alone. Diversification has, predictably enough, done better.
Not predictably enough, actually. Diversification doesn't really "ensure" high return. It "ensures" optimal return for the level of risk taken, with that return in reality being about average. If you're not diversified, your asset value can make a huge jump not just down, but also up.
I said "done better", not "ensure a high return". :huh:
"Better" than putting all your investment eggs in one asset class - real estate. This is a more risky strategy and yes, it is entirely predictable that lack of diversification is likely, over time, to encounter exactly this problem.
Sure, it is possible fpr the gambler to get lucky. It is however most improbable for the gambler to stay consistently lucky over time. It is of course not certain, but yes, it is "predictable" as in being the most likely outcome - the longer your time horizon, the more "predictable" the outcome becomes.
:huh: I thought we were talking about the growth of assets? Over the last couple of years?
We are talking about why there exists a gap or disperity between how well the upper-whatever percent have done since the recession, and the rest.
Not sure where you are getting 'Diversification doesn't really "ensure" high return' from when I never said it did.
Quote from: Malthus on April 24, 2013, 09:31:15 AM
We are talking about why there exists a gap or disperity between how well the upper-whatever percent have done since the recession, and the rest.
Not sure where you are getting 'Diversification doesn't really "ensure" high return' from when I never said it did.
You said that the rich had done better (i.e. got higher return) because they were diversified, and that this result was predictable (i.e. ensured). You are right, you didn't say that diversification ensures higher returns, you just said something that is entirely equivalent to it.
Quote from: DGuller on April 24, 2013, 12:15:00 PM
Quote from: Malthus on April 24, 2013, 09:31:15 AM
We are talking about why there exists a gap or disperity between how well the upper-whatever percent have done since the recession, and the rest.
Not sure where you are getting 'Diversification doesn't really "ensure" high return' from when I never said it did.
You said that the rich had done better (i.e. got higher return) because they were diversified, and that this result was predictable (i.e. ensured). You are right, you didn't say that diversification ensures higher returns, you just said something that is entirely equivalent to it.
Well, except for the fact that I said nothing like either part of what you have for some reason attributed to me, you are totally correct. :lol:
Look, if you are of the opinion that "predictable" is the equivalent of "ensured", there is really no help for you.
Do you think that the statement "if you drink and drive, getting into an accident is an entirely
predictable result"
really means "if you drink and drive, getting into an accident is
ensured"?
Isn't your profession supposed to be about risks and stuff? :hmm:
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
Quote from: Malthus on April 24, 2013, 12:34:34 PM
Isn't your profession supposed to be about risks and stuff? :hmm:
:face:
Quote from: crazy canuck on April 24, 2013, 12:43:38 PM
Quote from: Malthus on April 24, 2013, 12:34:34 PM
Isn't your profession supposed to be about risks and stuff? :hmm:
:face:
I don't see what so :face: in it. This discussion seems to be about semantic bullshit, not risk, which is what Malthus's profession is supposed to be about.
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
I think what he meant by predictable was "statistically likely", not "guaranteed".
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
What you are missing is the context. In this analogy, the "accident" has already happened, the car is in the ditch with wheels spinning - that is, we already know that the non-rich have fared more poorly.
While the chances of getting into any accident may be only 1% for any particular trip, some rather higher figure of accidents are "caused or contributed" to by drinking and driving. So if you drink and drive and get into an accident, yes, it's "predictable" that the two would be related, right? While by no means being "ensured"?
I'd love to see you arguing otherwise in court: "yes, your honour, my client was drunk as a freaking skunk when he plowed into that minivan full of nuns, but there was
no way he could reasonably have predicted his drinking would cause or contribute to that - why look at the figures, only 1% of drunk trips result in accidents!" :D
Quote from: fahdiz on April 24, 2013, 12:54:43 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
I think what he meant by predictable was "statistically likely", not "guaranteed".
:yes:
Quote from: Malthus on April 24, 2013, 12:56:46 PM
Quote from: fahdiz on April 24, 2013, 12:54:43 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
I think what he meant by predictable was "statistically likely", not "guaranteed".
:yes:
:face:
Quote from: derspiess on April 24, 2013, 01:09:35 PM
Quote from: Malthus on April 24, 2013, 12:56:46 PM
Quote from: fahdiz on April 24, 2013, 12:54:43 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
I think what he meant by predictable was "statistically likely", not "guaranteed".
:yes:
:face:
The small comfort I feel in the fact that I would likely not pass the actuarial exams is the reassurance that I can at least parse everyday language reasonably well.
Quote from: fahdiz on April 24, 2013, 12:54:43 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
I think what he meant by predictable was "statistically likely", not "guaranteed".
I didn't take it to be guaranteed either, hence the use of quotes around "ensured". For brevity, I did not go into all the exceptions that are necessarily part of the financial theory. However, it's even not statistically likely, in any meaningful interpretation of the term, that a diversified portfolio would outperform an undiversified portfolio. The advantages of diversification do not directly lead to superior returns, they're more subtle than that.
Quote from: Malthus on April 24, 2013, 12:55:31 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
What you are missing is the context. In this analogy, the "accident" has already happened, the car is in the ditch with wheels spinning - that is, we already know that the non-rich have fared more poorly.
While the chances of getting into any accident may be only 1% for any particular trip, some rather higher figure of accidents are "caused or contributed" to by drinking and driving. So if you drink and drive and get into an accident, yes, it's "predictable" that the two would be related, right? While by no means being "ensured"?
I'd love to see you arguing otherwise in court: "yes, your honour, my client was drunk as a freaking skunk when he plowed into that minivan full of nuns, but there was no way he could reasonably have predicted his drinking would cause or contribute to that - why look at the figures, only 1% of drunk trips result in accidents!" :D
Well, everything is predictable after it already happened.
Quote from: DGuller on April 24, 2013, 01:20:19 PM
Quote from: fahdiz on April 24, 2013, 12:54:43 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
I think what he meant by predictable was "statistically likely", not "guaranteed".
I didn't take it to be guaranteed either, hence the use of quotes around "ensured". For brevity, I did not go into all the exceptions that are necessarily part of the financial theory. However, it's even not statistically likely, in any meaningful interpretation of the term, that a diversified portfolio would outperform an undiversified portfolio. The advantages of diversification do not directly lead to superior returns, they're more subtle than that.
It seems to me that the main advantage of diversification is that it minimizes the risk of loss rather than that it maximizes the chance of return.
Quote from: fahdiz on April 24, 2013, 01:22:17 PM
It seems to me that the main advantage of diversification is that it minimizes the risk of loss rather than that it maximizes the chance of return.
It minimizes both risk of abnormal loss and risk of abnormal gains, among other things. If you want to shoot for a highest return, like for example in a stock picking context, you want to be as un-diversified as possible. Your best chance of winning is to put all your money into a company that's about bankrupt, hoping that it would rebound from near-zero stock price. That's why such contests are so stupid.
Quote from: DGuller on April 24, 2013, 01:27:47 PM
Quote from: fahdiz on April 24, 2013, 01:22:17 PM
It seems to me that the main advantage of diversification is that it minimizes the risk of loss rather than that it maximizes the chance of return.
It minimizes both risk of loss and risk of gains, among other things.
Yes, I think that's what I was trying to say.
Having said that, if your assets are large to begin with, smaller gains over a longer period of time might be preferable to the chance that a huge investment will ruin you.
Guller, what's your opinion of an investment strategy which would look something like 90% of assets in very low-risk investment and 10% in ridiculously risky ventures? (Or 80/20, or whatever split might give one the best spread between lowest potential downside and large potential upside)
Quote from: DGuller on April 24, 2013, 01:20:19 PM
Quote from: fahdiz on April 24, 2013, 12:54:43 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
I think what he meant by predictable was "statistically likely", not "guaranteed".
I didn't take it to be guaranteed either, hence the use of quotes around "ensured". For brevity, I did not go into all the exceptions that are necessarily part of the financial theory. However, it's even not statistically likely, in any meaningful interpretation of the term, that a diversified portfolio would outperform an undiversified portfolio. The advantages of diversification do not directly lead to superior returns, they're more subtle than that.
There is nothing subtle about this.
The "accident has already happened" - one asset class has, to put it mildly, had "issues".
Diversification is
all about preventing shit like that from happening.
http://www.investopedia.com/articles/02/111502.asp
Thus, if you get all screwed up because you invested in one asset class alone, this is an "entirely predictable" result - much like a drunk driver plowing into a vanful of nuns ought, in hindsight, to have known that drinking and driving was a bad, bad idea. Drinking and driving is a bad idea because it increases your risks. Investing in one asset is a bad idea for much the same reason.
Now, no doubt you will go on about how, actually, plowing into a vanful of nuns is massively unlikely (I mean, how many nuns are there around anyway?) but this is to miss the larger point. :lol:
Quote from: DGuller on April 24, 2013, 01:21:09 PM
Quote from: Malthus on April 24, 2013, 12:55:31 PM
Quote from: DGuller on April 24, 2013, 12:43:10 PM
Well, the chance of getting into an accident if you drive drunk is below 1%, but let's assume it's exactly 1%. So, if at least 1% qualifies as "predictable" in your world, then of course your statement was correct. Pretty much any result is predictable.
What you are missing is the context. In this analogy, the "accident" has already happened, the car is in the ditch with wheels spinning - that is, we already know that the non-rich have fared more poorly.
While the chances of getting into any accident may be only 1% for any particular trip, some rather higher figure of accidents are "caused or contributed" to by drinking and driving. So if you drink and drive and get into an accident, yes, it's "predictable" that the two would be related, right? While by no means being "ensured"?
I'd love to see you arguing otherwise in court: "yes, your honour, my client was drunk as a freaking skunk when he plowed into that minivan full of nuns, but there was no way he could reasonably have predicted his drinking would cause or contribute to that - why look at the figures, only 1% of drunk trips result in accidents!" :D
Well, everything is predictable after it already happened.
Another winning line to use in court. :lol:
"Your honour, it may seem like my client downing a bottle of Southern Comfort and plowing into a vanful of nuns was somehow negligent, but this is not so. It's merely an artifact of hindsight. How was he to know he was doing anything stupid or criminal? After all,
everything is predictable after it already happened. "
Quote from: Malthus on April 24, 2013, 01:30:30 PM
Thus, if you get all screwed up because you invested in one asset class alone, this is an "entirely predictable" result - much like a drunk driver plowing into a vanful of nuns ought, in hindsight, to have known that drinking and driving was a bad, bad idea. Drinking and driving is a bad idea because it increases your risks. Investing in one asset is a bad idea for much the same reason.
Now, no doubt you will go on about how, actually, plowing into a vanful of nuns is massively unlikely (I mean, how many nuns are there around anyway?) but this is to miss the larger point. :lol:
But wouldn't that depend on time frame / circumstance? I mean if you owned a house prior to bubble and then sold during bubble (all your assets tied up there) then it was a good thing for you as you made out very well. Similarly if you absolutely had to be somewhere at a certain time but you were drunk, if traffic happened to be very light (because it was very early morning) and you made it to where you needed to be without injury, then you made out very well. It seems like with both only if you expand the timeframe to include some event where your behavior would be injurious (bubble burst, you were driving during rush hour) then is it predictable to say that you'd get that negative outcome.
Admittedly I think the housing example works better (which I think highlights differences between that and the hypothetical drunk driving case you posit).
Quote from: Admiral Yi on April 23, 2013, 06:45:05 PM
Quote from: The Minsky Moment on April 23, 2013, 06:36:25 PM
Savings come out of income. And middle class income is stagnating as well.
Either they can save more or they can expect their net worth to stagnate.
I don't understand.
Sure the middle class could keep apace with double digit net worth gains despite decreasing income by reducing their consumption to third world levels. Except they couldn't because the resulting depression would tank the entire economy and drag down all assets with them.
Quote from: garbon on April 24, 2013, 01:34:12 PM
Quote from: Malthus on April 24, 2013, 01:30:30 PM
Thus, if you get all screwed up because you invested in one asset class alone, this is an "entirely predictable" result - much like a drunk driver plowing into a vanful of nuns ought, in hindsight, to have known that drinking and driving was a bad, bad idea. Drinking and driving is a bad idea because it increases your risks. Investing in one asset is a bad idea for much the same reason.
Now, no doubt you will go on about how, actually, plowing into a vanful of nuns is massively unlikely (I mean, how many nuns are there around anyway?) but this is to miss the larger point. :lol:
But wouldn't that depend on time frame / circumstance? I mean if you owned a house prior to bubble and then sold during bubble (all your assets tied up there) then it was a good thing for you as you made out very well. Similarly if you absolutely had to be somewhere at a certain time but you were drunk, if traffic happened to be very light (because it was very early morning) and you made it to where you needed to be without injury, then you made out very well. It seems like with both only if you expand the timeframe to include some event where your behavior would be injurious (bubble burst, you were driving during rush hour) then is it predictable to say that you'd get that negative outcome.
Admittedly I think the housing example works better (which I think highlights differences between that and the hypothetical drunk driving case you posit).
In both cases it seems to me the main factor is luck (which the drunk driver is more likely to recognize, actually) rather than investment acumen.
Quote from: fahdiz on April 24, 2013, 01:38:15 PM
In both cases it seems to me the main factor is luck (which the drunk driver is more likely to recognize, actually) rather than investment acumen.
Totally true. But then I'd think you can only say it is predictable that a person who has all of their assets in one place (their home) will lost networth if you are looking a time-frame where you are saying a bubble will burst (if the bubble is continuing to inflate then that chain of events isn't predictable). Similar I guess, but not as easy to swallow with the drunk driver and rush hour.
Quote from: fahdiz on April 24, 2013, 01:28:58 PM
Yes, I think that's what I was trying to say.
Having said that, if your assets are large to begin with, smaller gains over a longer period of time might be preferable to the chance that a huge investment will ruin you.
There are definitely a lot of advantages to diversification, and in a theoretical world where you can borrow unlimited funds, there is no reason to ever not be diversified.
Quote
Guller, what's your opinion of an investment strategy which would look something like 90% of assets in very low-risk investment and 10% in ridiculously risky ventures? (Or 80/20, or whatever split might give one the best spread between lowest potential downside and large potential upside)
No opinion. I know just enough to know that there is a lot to know about, and that I won't know it without working in the field (and maybe not even then).
Quote from: Malthus on April 24, 2013, 01:34:11 PM
Another winning line to use in court. :lol:
"Your honour, it may seem like my client downing a bottle of Southern Comfort and plowing into a vanful of nuns was somehow negligent, but this is not so. It's merely an artifact of hindsight. How was he to know he was doing anything stupid or criminal? After all, everything is predictable after it already happened. "
I'm not sure how this discussion got into the courtroom, and what these non sequiturs have to do with anything. :huh:
Quote from: garbon on April 24, 2013, 01:40:14 PM
Quote from: fahdiz on April 24, 2013, 01:38:15 PM
In both cases it seems to me the main factor is luck (which the drunk driver is more likely to recognize, actually) rather than investment acumen.
Totally true. But then I'd think you can only say it is predictable that a person who has all of their assets in one place (their home) will lost networth if you are looking a time-frame where you are saying a bubble will burst (if the bubble is continuing to inflate then that chain of events isn't predictable). Similar I guess, but not as easy to swallow with the drunk driver and rush hour.
Yes, which is why it seems the more prudent decision - given that there are bubbles that burst, and little kids who run across the street - is to focus on one's exposure to risks rather than to attempt to predict when the bubble will burst or when the kid will run into traffic.
Drunk driving is a bit of a different "investment" in that there is no real potential for dramatic gain - the best you can hope for is that you made it home all right - and major potential for serious downside. On Taleb's triad scale, drunk driving would rank along with smoking as one of the most fragile sorts of investment strategies. :D
Quote from: OttoVonBismarck on April 23, 2013, 08:25:16 PM
Quote from: The Minsky Moment on April 23, 2013, 06:36:25 PMSavings come out of income. And middle class income is stagnating as well.
Middle class income has been stagnant for a long time, but to a degree I'm not always convinced this is a problem. Namely because I do not believe quality of life is stagnant. The average hourly wage, at least according to the BLS, has barely changed in real terms since the 1960s. Would anyone here argue that quality of life is not significantly higher in 2013 for the average wage earner than it was in 1964?
That may be true but doesn't change the fact the amount of resources available to mobilize for wealth creation is not increasing for the middle class but is increasing for the already very wealthy. So it really doesn't address the subject of the thread.
Quote from: garbon on April 24, 2013, 01:34:12 PM
Quote from: Malthus on April 24, 2013, 01:30:30 PM
Thus, if you get all screwed up because you invested in one asset class alone, this is an "entirely predictable" result - much like a drunk driver plowing into a vanful of nuns ought, in hindsight, to have known that drinking and driving was a bad, bad idea. Drinking and driving is a bad idea because it increases your risks. Investing in one asset is a bad idea for much the same reason.
Now, no doubt you will go on about how, actually, plowing into a vanful of nuns is massively unlikely (I mean, how many nuns are there around anyway?) but this is to miss the larger point. :lol:
But wouldn't that depend on time frame / circumstance? I mean if you owned a house prior to bubble and then sold during bubble (all your assets tied up there) then it was a good thing for you as you made out very well. Similarly if you absolutely had to be somewhere at a certain time but you were drunk, if traffic happened to be very light (because it was very early morning) and you made it to where you needed to be without injury, then you made out very well. It seems like with both only if you expand the timeframe to include some event where your behavior would be injurious (bubble burst, you were driving during rush hour) then is it predictable to say that you'd get that negative outcome.
Admittedly I think the housing example works better (which I think highlights differences between that and the hypothetical drunk driving case you posit).
You are fighting the hypothetical. In the example I gave, the guy lost value, or the accident happened. The issues then is "was this bad result a predictable result because I did X"? By which is meant "did I increase my risk of a bad result in a way I could have foreseen by doing X"?
I would have thought the answer obvious, but apparently it isn't. :hmm:
Sure, you may invest in a single asset class and come out ahead, or drive drunk and get to your destination. But if a bad result occurs rather than a good result, strikes me as being entirely predicatble.
Which is a seperate issue from whether it is "worth it". You may want to invest in a single asset class because you have an appetite for risk and want the chance of higher returns. You may have a compelling reason to fdrive drunk.
Quote from: fahdiz on April 24, 2013, 01:43:28 PM
Quote from: garbon on April 24, 2013, 01:40:14 PM
Quote from: fahdiz on April 24, 2013, 01:38:15 PM
In both cases it seems to me the main factor is luck (which the drunk driver is more likely to recognize, actually) rather than investment acumen.
Totally true. But then I'd think you can only say it is predictable that a person who has all of their assets in one place (their home) will lost networth if you are looking a time-frame where you are saying a bubble will burst (if the bubble is continuing to inflate then that chain of events isn't predictable). Similar I guess, but not as easy to swallow with the drunk driver and rush hour.
Yes, which is why it seems the more prudent decision - given that there are bubbles that burst, and little kids who run across the street - is to focus on one's exposure to risks rather than to attempt to predict when the bubble will burst or when the kid will run into traffic.
Well presumably that varies greatly. I mean I don't think there are a lot of options open to most of these net loss people who needed a home and that's where their money went. I guess they could have rented and then invested that money elsewhere but I don't know how viable that is on a countrywide basis.
And also, doesn't seem like necessary the best way if you want to increase your net worth - sounds like a good way to remain static or incrementally increase your net worth.
Quote from: garbon on April 24, 2013, 01:46:58 PM
Quote from: fahdiz on April 24, 2013, 01:43:28 PM
Quote from: garbon on April 24, 2013, 01:40:14 PM
Quote from: fahdiz on April 24, 2013, 01:38:15 PM
In both cases it seems to me the main factor is luck (which the drunk driver is more likely to recognize, actually) rather than investment acumen.
Totally true. But then I'd think you can only say it is predictable that a person who has all of their assets in one place (their home) will lost networth if you are looking a time-frame where you are saying a bubble will burst (if the bubble is continuing to inflate then that chain of events isn't predictable). Similar I guess, but not as easy to swallow with the drunk driver and rush hour.
Yes, which is why it seems the more prudent decision - given that there are bubbles that burst, and little kids who run across the street - is to focus on one's exposure to risks rather than to attempt to predict when the bubble will burst or when the kid will run into traffic.
Well presumably that varies greatly. I mean I don't think there are a lot of options open to most of these net loss people who needed a home and that's where their money went. I guess they could have rented and then invested that money elsewhere but I don't know how viable that is on a countrywide basis.
And also, doesn't seem like necessary the best way if you want to increase your net worth - sounds like a good way to remain static or incrementally increase your net worth.
I guess my feeling would be on a personal level that incrementally increasing my net worth with a reasonable hedge against catastrophic ruin would be "better" than hoping to get lucky on a housing bubble.
Alternatively, one could attempt to recognize when *others* have entered into highly fragile investment strategies and bet against them, although I still wouldn't want to do that without a hedge against ruin. If I bet 10% of my assets against a bunch of folks who are sure they can predict the next housing burst, I can potentially make a really good return. Having said that, if I mis-time it and lose my investment, it's only 10% of my assets and the other 90% are still safe and boring.
Quote from: Malthus on April 24, 2013, 01:46:12 PM
Sure, you may invest in a single asset class and come out ahead, or drive drunk and get to your destination. But if a bad result occurs rather than a good result, strikes me as being entirely predicatble.
But only for the time frame. For someone who bought a house as prices were increasing, it was "entirely predictable" that they could sell it later for more money. So that predictability only really comes with the backdrop of knowing if someone is in a boom or bust. After all, even if you look at a long time period like say 50 years - you know that your house value will go up and down but it isn't entirely predictable if your house value will be up or down at the end of that time period.
Also, I don't think any of this would predict that the top 13% would end up with more wealth. Certainly it could see them remaining stable as other investments made up for their loss of house net worth but wouldn't predict them gaining what other networth groups lost.
Quote from: fahdiz on April 24, 2013, 01:51:39 PM
I guess my feeling would be on a personal level that incrementally increasing my net worth with a reasonable hedge against catastrophic ruin would be "better" than hoping to get lucky on a housing bubble.
Alternatively, one could attempt to recognize when *others* have entered into highly fragile investment strategies and bet against them, although I still wouldn't want to do that without a hedge against ruin. If I bet 10% of my assets against a bunch of folks who are sure they can predict the next housing burst, I can potentially make a really good return. Having said that, if I mis-time it and lose my investment, it's only 10% of my assets and the other 90% are still safe and boring.
Sure I think that's fair to say. :)
Quote from: garbon on April 24, 2013, 01:52:43 PM
Quote from: fahdiz on April 24, 2013, 01:51:39 PM
I guess my feeling would be on a personal level that incrementally increasing my net worth with a reasonable hedge against catastrophic ruin would be "better" than hoping to get lucky on a housing bubble.
Alternatively, one could attempt to recognize when *others* have entered into highly fragile investment strategies and bet against them, although I still wouldn't want to do that without a hedge against ruin. If I bet 10% of my assets against a bunch of folks who are sure they can predict the next housing burst, I can potentially make a really good return. Having said that, if I mis-time it and lose my investment, it's only 10% of my assets and the other 90% are still safe and boring.
Sure I think that's fair to say. :)
This of course assumes I have assets beyond my house :lol: One day soon, perhaps I will have a small stake to invest.
Quote from: Malthus on April 24, 2013, 01:46:12 PM
The issues then is "was this bad result a predictable result because I did X"? By which is meant "did I increase my risk of a bad result in a way I could have foreseen by doing X"?
I would have thought the answer obvious, but apparently it isn't. :hmm:
Part of the reason why it isn't apparent is that in your usage, a 1% outcome is predictable, whereas a 99% outcome isn't predictable.
Quote from: garbon on April 24, 2013, 01:51:48 PM
Quote from: Malthus on April 24, 2013, 01:46:12 PM
Sure, you may invest in a single asset class and come out ahead, or drive drunk and get to your destination. But if a bad result occurs rather than a good result, strikes me as being entirely predicatble.
But only for the time frame. For someone who bought a house as prices were increasing, it was "entirely predictable" that they could sell it later for more money. So that predictability only really comes with the backdrop of knowing if someone is in a boom or bust. After all, even if you look at a long time period like say 50 years - you know that your house value will go up and down but it isn't entirely predictable if your house value will be up or down at the end of that time period.
Also, I don't think any of this would predict that the top 13% would end up with more wealth. Certainly it could see them remaining stable as other investments made up for their loss of house net worth but wouldn't predict them gaining what other networth groups lost.
We are talking about risks here. The point of "diversification" as a strategy is to insulate against the risk of a volitile market in assets. Given volitility, a group with a "diversified" portfolio is going to, on average, do better than a group that isn't diversified.
Why does this benefit the "rich"? - Because, as a class, the non-rich find it much harder to own assets aside from their house.
This makes the "rich"
safer, over and above the fact that they have more money.
Now, it is of course possible that the non-diversified can do *better* than the diversified, in any given year. But they are taking a bigger risk. The irony being, of course, that the non-rich generally have more reason to be wary of risk than the rich.
Quote from: Malthus on April 24, 2013, 02:02:11 PM
We are talking about risks here. The point of "diversification" as a strategy is to insulate against the risk of a volitile market in assets. Given volitility, a group with a "diversified" portfolio is going to, on average, do better than a group that isn't diversified.
Why does this benefit the "rich"? - Because, as a class, the non-rich find it much harder to own assets aside from their house.
This makes the "rich" safer, over and above the fact that they have more money.
Now, it is of course possible that the non-diversified can do *better* than the diversified, in any given year. But they are taking a bigger risk. The irony being, of course, that the non-rich generally have more reason to be wary of risk than the rich.
Yes safer aka stable. That doesn't mean that such should predict the increase seen for the rich over two years.
Quote from: DGuller on April 24, 2013, 01:59:19 PM
Quote from: Malthus on April 24, 2013, 01:46:12 PM
The issues then is "was this bad result a predictable result because I did X"? By which is meant "did I increase my risk of a bad result in a way I could have foreseen by doing X"?
I would have thought the answer obvious, but apparently it isn't. :hmm:
Part of the reason why it isn't apparent is that in your usage, a 1% outcome is predictable, whereas a 99% outcome isn't predictable.
:hmm:
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Quote from: garbon on April 24, 2013, 02:04:59 PM
Quote from: Malthus on April 24, 2013, 02:02:11 PM
We are talking about risks here. The point of "diversification" as a strategy is to insulate against the risk of a volitile market in assets. Given volitility, a group with a "diversified" portfolio is going to, on average, do better than a group that isn't diversified.
Why does this benefit the "rich"? - Because, as a class, the non-rich find it much harder to own assets aside from their house.
This makes the "rich" safer, over and above the fact that they have more money.
Now, it is of course possible that the non-diversified can do *better* than the diversified, in any given year. But they are taking a bigger risk. The irony being, of course, that the non-rich generally have more reason to be wary of risk than the rich.
Yes safer aka stable. That doesn't mean that such should predict the increase seen for the rich over two years.
:hmm:
Quote from: Malthus on April 24, 2013, 02:02:11 PM
Quote from: garbon on April 24, 2013, 01:51:48 PM
Quote from: Malthus on April 24, 2013, 01:46:12 PM
Sure, you may invest in a single asset class and come out ahead, or drive drunk and get to your destination. But if a bad result occurs rather than a good result, strikes me as being entirely predicatble.
But only for the time frame. For someone who bought a house as prices were increasing, it was "entirely predictable" that they could sell it later for more money. So that predictability only really comes with the backdrop of knowing if someone is in a boom or bust. After all, even if you look at a long time period like say 50 years - you know that your house value will go up and down but it isn't entirely predictable if your house value will be up or down at the end of that time period.
Also, I don't think any of this would predict that the top 13% would end up with more wealth. Certainly it could see them remaining stable as other investments made up for their loss of house net worth but wouldn't predict them gaining what other networth groups lost.
We are talking about risks here. The point of "diversification" as a strategy is to insulate against the risk of a volitile market in assets. Given volitility, a group with a "diversified" portfolio is going to, on average, do better than a group that isn't diversified.
Why does this benefit the "rich"? - Because, as a class, the non-rich find it much harder to own assets aside from their house.
This makes the "rich" safer, over and above the fact that they have more money.
Now, it is of course possible that the non-diversified can do *better* than the diversified, in any given year. But they are taking a bigger risk. The irony being, of course, that the non-rich generally have more reason to be wary of risk than the rich.
:yes:
The person who has all their assets in one investment is more exposed to risk, and furthermore those risks are more nonlinear - although the lower bound is "ruin", which no one wants regardless of class or income level. The person who has their assets diversified has a reduced risk of loss (where the potential losses are knowable, quantifiable, and most importantly do not significantly impact the bottom line) and a reduced chance of gain (with the potential gain still more nonlinear than the potential loss).
It's common sense - the more quickly you want to get rich, the more exposed you are to ruin.
Quote from: Malthus on April 24, 2013, 02:05:15 PM
:hmm:
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Well I suppose that depends on how one looks at it. I mean isn't the likelihood of a car accident actually pretty low? And then let's say drunk driving increase that risk by 10-fold - isn't it still pretty unlikely that you'll get in a car accident?
Quote from: garbon on April 24, 2013, 02:12:19 PM
Quote from: Malthus on April 24, 2013, 02:05:15 PM
:hmm:
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Well I suppose that depends on how one looks at it. I mean isn't the likelihood of a car accident actually pretty low? And then let's say drunk driving increase that risk by 10-fold - isn't it still pretty unlikely that you'll get in a car accident?
You are fighting the hypothetical again.
Read carefully: if I drink and drive
and get into an accident because of that, this is "not a predictable result" according to you?
Quote from: Malthus on April 24, 2013, 02:07:28 PM
Quote from: garbon on April 24, 2013, 02:04:59 PM
Quote from: Malthus on April 24, 2013, 02:02:11 PM
We are talking about risks here. The point of "diversification" as a strategy is to insulate against the risk of a volitile market in assets. Given volitility, a group with a "diversified" portfolio is going to, on average, do better than a group that isn't diversified.
Why does this benefit the "rich"? - Because, as a class, the non-rich find it much harder to own assets aside from their house.
This makes the "rich" safer, over and above the fact that they have more money.
Now, it is of course possible that the non-diversified can do *better* than the diversified, in any given year. But they are taking a bigger risk. The irony being, of course, that the non-rich generally have more reason to be wary of risk than the rich.
Yes safer aka stable. That doesn't mean that such should predict the increase seen for the rich over two years.
:hmm:
Well it stands to reason, per what you've said, that the person without diversification (non-rich) is more exposed to risk and with what we had happened so net worth plunge because it was all tied up in falling house prices.
The rich, per what you've said, has some exposure to house prices but net worth doesn't plunge as they've also spread to some other sources. It seems to me that those other sources must have done pretty spectacular to not only have the person balance out the house price drop but also push it to an increase of 21% over 2 years.
Quote from: garbon on April 24, 2013, 02:12:19 PM
Quote from: Malthus on April 24, 2013, 02:05:15 PM
:hmm:
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Well I suppose that depends on how one looks at it. I mean isn't the likelihood of a car accident actually pretty low? And then let's say drunk driving increase that risk by 10-fold - isn't it still pretty unlikely that you'll get in a car accident?
Yes, but the associated possibilities of getting in a car accident are nonlinear in scope - you could have a minor fenderbender at best but you also could be facing manslaughter charges, the loss of your job, etc etc etc. Furthermore you can't know what "loss" you will face until you are faced with it.
You *can*, however, know how *exposed* you are to various risks. "If I drive drunk, how exposed am I to gain and, conversely, to catastrophic loss? I must conclude that driving drunk is a sucker bet. The upside is very limited and the downside is potentially ruinous."
Quote from: Malthus on April 24, 2013, 02:14:25 PM
Quote from: garbon on April 24, 2013, 02:12:19 PM
Quote from: Malthus on April 24, 2013, 02:05:15 PM
:hmm:
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Well I suppose that depends on how one looks at it. I mean isn't the likelihood of a car accident actually pretty low? And then let's say drunk driving increase that risk by 10-fold - isn't it still pretty unlikely that you'll get in a car accident?
You are fighting the hypothetical again.
Read carefully: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Sure but that's after the fact. It's probably fair to say that the drinking contributed to your accident but that's little to do with prediction about whether on any given day you have an accident while drunk. After all, if the odds are in favor of not having an accident whether you are drunk or sober, then net-net it is most likely the case that you won't have one.
Quote from: fahdiz on April 24, 2013, 02:10:26 PM
Quote from: Malthus on April 24, 2013, 02:02:11 PM
Quote from: garbon on April 24, 2013, 01:51:48 PM
Quote from: Malthus on April 24, 2013, 01:46:12 PM
Sure, you may invest in a single asset class and come out ahead, or drive drunk and get to your destination. But if a bad result occurs rather than a good result, strikes me as being entirely predicatble.
But only for the time frame. For someone who bought a house as prices were increasing, it was "entirely predictable" that they could sell it later for more money. So that predictability only really comes with the backdrop of knowing if someone is in a boom or bust. After all, even if you look at a long time period like say 50 years - you know that your house value will go up and down but it isn't entirely predictable if your house value will be up or down at the end of that time period.
Also, I don't think any of this would predict that the top 13% would end up with more wealth. Certainly it could see them remaining stable as other investments made up for their loss of house net worth but wouldn't predict them gaining what other networth groups lost.
We are talking about risks here. The point of "diversification" as a strategy is to insulate against the risk of a volitile market in assets. Given volitility, a group with a "diversified" portfolio is going to, on average, do better than a group that isn't diversified.
Why does this benefit the "rich"? - Because, as a class, the non-rich find it much harder to own assets aside from their house.
This makes the "rich" safer, over and above the fact that they have more money.
Now, it is of course possible that the non-diversified can do *better* than the diversified, in any given year. But they are taking a bigger risk. The irony being, of course, that the non-rich generally have more reason to be wary of risk than the rich.
:yes:
The person who has all their assets in one investment is more exposed to risk, and furthermore those risks are more nonlinear - although the lower bound is "ruin", which no one wants regardless of class or income level. The person who has their assets diversified has a reduced risk of loss (where the potential losses are knowable, quantifiable, and most importantly do not significantly impact the bottom line) and a reduced chance of gain (with the potential gain still more nonlinear than the potential loss).
It's common sense - the more quickly you want to get rich, the more exposed you are to ruin.
Another problem for the homeowner non-rich is liquidity. That is, if the market appears to be peaking in real estate, it is significantly more difficult for them to cash in on it - that involves selling the house that they happen to be living in (presumably meaning they have to fiond elsewhere to live, which they must purchase or rent in the same market), a major undertaking.
It's a lot easier to sell stocks.
This means that they are immediately exposed to all sorts of risks - well, if they have a mortgage, risk such as interest rate increase - but find it harder to cash in on the rewards.
Quote from: Malthus on April 24, 2013, 02:19:55 PM
Another problem for the homeowner non-rich is liquidity. That is, if the market appears to be peaking in real estate, it is significantly more difficult for them to cash in on it - that involves selling the house that they happen to be living in (presumably meaning they have to fiond elsewhere to live, which they must purchase or rent in the same market), a major undertaking.
It's a lot easier to sell stocks.
This means that they are immediately exposed to all sorts of risks - well, if they have a mortgage, risk such as interest rate increase - but find it harder to cash in on the rewards.
Quite so.
Quote from: fahdiz on April 24, 2013, 02:15:22 PM
Yes, but the associated possibilities of getting in a car accident are nonlinear in scope - you could have a minor fenderbender at best but you also could be facing manslaughter charges, the loss of your job, etc etc etc. Furthermore you can't know what "loss" you will face until you are faced with it.
You *can*, however, know how *exposed* you are to various risks. "If I drive drunk, how exposed am I to gain and, conversely, to catastrophic loss? I must conclude that driving drunk is a sucker bet. The upside is very limited and the downside is potentially ruinous."
Certainly, I'm not trying to argue that you should drink and drive - just that saying its predictable you will get into an accident is odd to say because it isn't.
I did actually look up fatal car accidents and it looks like those are uncommon and you are 7 times more likely to have one if you have a BAC of .10.
As you say though, the issue with driving drunk isn't that it is predictable you will have a fatal accident but more the advantage of driving drunk vs. the terrible consequences that can result (death, injury, jail time, etc.).
Quote from: garbon on April 24, 2013, 02:15:06 PM
Quote from: Malthus on April 24, 2013, 02:07:28 PM
Quote from: garbon on April 24, 2013, 02:04:59 PM
Quote from: Malthus on April 24, 2013, 02:02:11 PM
We are talking about risks here. The point of "diversification" as a strategy is to insulate against the risk of a volitile market in assets. Given volitility, a group with a "diversified" portfolio is going to, on average, do better than a group that isn't diversified.
Why does this benefit the "rich"? - Because, as a class, the non-rich find it much harder to own assets aside from their house.
This makes the "rich" safer, over and above the fact that they have more money.
Now, it is of course possible that the non-diversified can do *better* than the diversified, in any given year. But they are taking a bigger risk. The irony being, of course, that the non-rich generally have more reason to be wary of risk than the rich.
Yes safer aka stable. That doesn't mean that such should predict the increase seen for the rich over two years.
:hmm:
Well it stands to reason, per what you've said, that the person without diversification (non-rich) is more exposed to risk and with what we had happened so net worth plunge because it was all tied up in falling house prices.
The rich, per what you've said, has some exposure to house prices but net worth doesn't plunge as they've also spread to some other sources. It seems to me that those other sources must have done pretty spectacular to not only have the person balance out the house price drop but also push it to an increase of 21% over 2 years.
I'm merely going by what it said in the article linked to the table in the OP.
Quote from: garbon on April 24, 2013, 02:18:36 PM
Quote from: Malthus on April 24, 2013, 02:14:25 PM
Quote from: garbon on April 24, 2013, 02:12:19 PM
Quote from: Malthus on April 24, 2013, 02:05:15 PM
:hmm:
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Well I suppose that depends on how one looks at it. I mean isn't the likelihood of a car accident actually pretty low? And then let's say drunk driving increase that risk by 10-fold - isn't it still pretty unlikely that you'll get in a car accident?
You are fighting the hypothetical again.
Read carefully: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
Sure but that's after the fact. It's probably fair to say that the drinking contributed to your accident but that's little to do with prediction about whether on any given day you have an accident while drunk. After all, if the odds are in favor of not having an accident whether you are drunk or sober, then net-net it is most likely the case that you won't have one.
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
Quote from: garbon on April 24, 2013, 02:21:45 PM
As you say though, the issue with driving drunk isn't that it is predictable you will have a fatal accident but more the advantage of driving drunk vs. the terrible consequences that can result (death, injury, jail time, etc.).
:yes: The house analogy is a better one in terms of "investment", in that there is at least a potential for serious gain mixed in with the potential for catastrophic loss.
Still, being exposed to catastrophic loss isn't a terribly fun place to be in. I know I'd feel a hell of a lot more comfortable if my investment in my house amounted to 10-20% of my total assets rather than 99% of them.
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
I think that might be because they way you are using predictable doesn't seem predictable at all - given that the odds were still against the "predictable" result happening. :P
Quote from: Malthus on April 24, 2013, 02:05:15 PM
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
It's not a predictable result at all. I'm in the business of predicting the future, not predicting the past, and doing it in an unbiased way. If we were to take even money bets on the drunk driver before he drives off, I would bet on him getting home without getting into an accident.
On the other hand, if the bet involved two drivers, one sober and one drunk, and you win the bet if the guy you bet on crashes before the other, then obviously I would put my money on the drunk. Him getting into an accident before the sober guy gets into an accident would be an entirely predictable result.
I can understand why your perspective is skewed. Lawyers aren't typically involved when the drunk driver gets home safely, an old lady navigates the sidewalk without tripping and falling on it, or some company invents something new without infringing on a patent. Therefore, when do you get involved, you have to predict retroactively.
My best guess is that when lawyers say "predictable", they mean "the reasonable person must've been aware that they acted in a way that increased the risk of the event happening". Even then, though, your original use of "predictable" wouldn't fit under that definition, since not diversifying doesn't increase your risk of getting lower returns compared to a diversified portfolio.
Quote from: garbon on April 24, 2013, 02:21:45 PM
Quote from: fahdiz on April 24, 2013, 02:15:22 PM
Yes, but the associated possibilities of getting in a car accident are nonlinear in scope - you could have a minor fenderbender at best but you also could be facing manslaughter charges, the loss of your job, etc etc etc. Furthermore you can't know what "loss" you will face until you are faced with it.
You *can*, however, know how *exposed* you are to various risks. "If I drive drunk, how exposed am I to gain and, conversely, to catastrophic loss? I must conclude that driving drunk is a sucker bet. The upside is very limited and the downside is potentially ruinous."
Certainly, I'm not trying to argue that you should drink and drive - just that saying its predictable you will get into an accident is odd to say because it isn't.
I did actually look up fatal car accidents and it looks like those are uncommon and you are 7 times more likely to have one if you have a BAC of .10.
As you say though, the issue with driving drunk isn't that it is predictable you will have a fatal accident but more the advantage of driving drunk vs. the terrible consequences that can result (death, injury, jail time, etc.).
I point out your error and you are going right back to doing the same thing. :lol:
I'm
not saying that if you drive drunk, you will have an accident.
I'm saying that having an accident is an
entirely foreseeable bad-case result of drinking and driving. The reason? Drinking and driving, as everyone knows, increases your risks.
Note again that "foreseeable", like "predictable", does not mean "inevitable" and need not even mean "very likely". It does not mean that one "predicts" exactly what will transpire. :lol:
Sheesh.
Quote from: DGuller on April 24, 2013, 02:28:56 PM
not diversifying doesn't increase your risk of getting lower returns compared to a diversified portfolio.
It increases the risk that those lower returns will be catastrophic.
Quote from: Malthus on April 24, 2013, 02:31:03 PM
I point out your error and you are going right back to doing the same thing. :lol:
I'm not saying that if you drive drunk, you will have an accident.
I'm saying that having an accident is an entirely foreseeable bad-case result of drinking and driving. The reason? Drinking and driving, as everyone knows, increases your risks.
Note again that "foreseeable", like "predictable", does not mean "inevitable" and need not even mean "very likely". It does not mean that one "predicts" exactly what will transpire. :lol:
Sheesh.
Sure but only slightly more foreseeable than having an accident when not drunk. Certainly not an increase in magnitudes that you should see it isn't foreseeable to have an accident while driving sober but it is foreseeable to have an accident while driving drunk.
The increase in risk is pretty small, it's just that the end result can be so bad that you don't want to increase you risks at all.
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
Quote from: DGuller on April 24, 2013, 02:28:56 PM
My best guess is that when lawyers say "predictable", they mean "the reasonable person must've been aware that they acted in a way that increased the risk of the event happening". Even then, though, your original use of "predictable" wouldn't fit under that definition, since not diversifying doesn't increase your risk of getting lower returns compared to a diversified portfolio.
That seems pretty fair.
Quote from: DGuller on April 24, 2013, 02:28:56 PM
Quote from: Malthus on April 24, 2013, 02:05:15 PM
Let me get this straight: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
It's not a predictable result at all. I'm in the business of predicting the future, not predicting the past, and doing it in an unbiased way. If we were to take even money bets on the drunk driver before he drives off, I would bet on him getting home without getting into an accident.
On the other hand, if the bet involved two drivers, one sober and one drunk, and you win the bet if the guy you bet on crashes before the other, then obviously I would put my money on the drunk. Him getting into an accident before the sober guy gets into an accident would be an entirely predictable result.
I can understand why your perspective is skewed. Lawyers aren't typically involved when the drunk driver gets home safely, an old lady navigates the sidewalk without tripping and falling on it, or some company invents something new without infringing on a patent. Therefore, when do you get involved, you have to predict retroactively.
My best guess is that when lawyers say "predictable", they mean "the reasonable person must've been aware that they acted in a way that increased the risk of the event happening". Even then, though, your original use of "predictable" wouldn't fit under that definition, since not diversifying doesn't increase your risk of getting lower returns compared to a diversified portfolio.
Perhaps consulting a dictionary would help with you two. :lol:
http://www.macmillandictionary.com/dictionary/british/predictable
Quote
1 if something is predictable, it happens in the way that you would expect
Most of the films we've reviewed this summer have had one thing in common – predictable plots.
Are you seriously claiming that the word "predictable"
can't mean this? That it
must mean "accurately foretelling the future"? In spite of me, fahdiz, and everyone except Garbon telling you repeatedly ... ?
Quote from: Malthus on April 24, 2013, 02:37:50 PM
Perhaps consulting a dictionary would help with you two. :lol:
http://www.macmillandictionary.com/dictionary/british/predictable
Quote
1 if something is predictable, it happens in the way that you would expect
Most of the films we've reviewed this summer have had one thing in common – predictable plots.
Are you seriously claiming that the word "predictable" can't mean this? That it must mean "accurately foretelling the future"? In spite of me, fahdiz, and everyone except Garbon telling you repeatedly ... ?
I don't know why you'd expect a drunk driver to have an accident. The odds clearly show that the expected result of drunk driving is that you get home safely.
Quote from: DGuller on April 24, 2013, 01:43:22 PM
I'm not sure how this discussion got into the courtroom, and what these non sequiturs have to do with anything. :huh:
Your job is assessing risk. Malthus's job is dragging everything into a courtroom.
Quote from: garbon on April 24, 2013, 02:33:57 PM
The increase in risk is pretty small, it's just that the end result can be so bad that you don't want to increase you risks at all.
Yes, I think that dovetails well with the notion I've been talking about regarding managing your exposure to risks rather than attempting to predict the likelihood of a particular risk occuring.
"If something goes wrong, how screwed am I? And how great is the offsetting gain?" If the potential gain is good and the potential loss is minimal, you're in an ideal place - even though you may not be seeing your portfolio skyrocket.
Quote from: DGuller on April 24, 2013, 02:34:40 PM
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
You are insisting I'm using a word in a particular way, when I've said many times I'm not, when it is obvious from the first I was not, and when that way doesn't make any sense in context, and when it isn't even the primary meaning of the word - and then claiming that, somehow, this is
my mistake. :hmm:
Again, consult a dictionary. This has nothing to do with some special super-secret "lawyer's definition".
Quote from: garbon on April 24, 2013, 02:39:32 PM
I don't know why you'd expect a drunk driver to have an accident. The odds clearly show that the expected result of drunk driving is that you get home safely.
I don't "expect a drunk driver to have an accident".
Quote from: Malthus on April 24, 2013, 02:37:50 PM
Perhaps consulting a dictionary would help with you two. :lol:
http://www.macmillandictionary.com/dictionary/british/predictable
Quote
1 if something is predictable, it happens in the way that you would expect
Most of the films we've reviewed this summer have had one thing in common – predictable plots.
Are you seriously claiming that the word "predictable" can't mean this? That it must mean "accurately foretelling the future"? In spite of me, fahdiz, and everyone except Garbon telling you repeatedly ... ?
First, that's a comically unhelpful definition. Secondly, no, I don't expect a drunk driver to get into an accident. His expected number of accidents for the trip is 0.01, so in other words, not expected all that much. And lastly, there is no need for ad populum fallacies, counselor.
Teens Talk More About Economics, but No Better Informed
The nation's "Report Card in Economics," released Wednesday, found no improvement in high-school seniors' economics knowledge from six years ago, on the eve of the crisis. The U.S. Department of Education project surveyed and tested nearly 11,000 12th-graders in 480 American public and private schools.
"More students say they're talking about economics with their friends and family," than before the downturn, said Jack Buckley, commissioner of the National Center for Education Statistics. "Economics is more a part of their lives than it was in 2006."
http://blogs.wsj.com/economics/2013/04/24/teens-talk-more-about-economics-but-no-better-informed/
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fs.wsj.net%2Fpublic%2Fresources%2Fimages%2FSF-AC146_BAYSIG_D_20130424150248.jpg&hash=6ceaf3bbd0206d0fd4fad5c80f917689150f6086)
Quote from: DGuller on April 24, 2013, 02:50:28 PM
First, that's a comically unhelpful definition. Secondly, no, I don't expect a drunk driver to get into an accident. His expected number of accidents for the trip is 0.01, so in other words, not expected all that much. And no need for ad populum fallacies, counselor.
Point is that you are insisting, for pages and pages, on giving a certain meaning to the word, and wooden-headedly refusing to listen to the obvious fact I'm not using it in that way, and never was.
What, exactly, is that in aid of?
Quote from: Malthus on April 24, 2013, 02:42:47 PM
Quote from: DGuller on April 24, 2013, 02:34:40 PM
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
You are insisting I'm using a word in a particular way, when I've said many times I'm not, when it is obvious from the first I was not, and when that way doesn't make any sense in context, and when it isn't even the primary meaning of the word - and then claiming that, somehow, this is my mistake. :hmm:
Again, consult a dictionary. This has nothing to do with some special super-secret "lawyer's definition".
You keep moving the discussion of what is "predictable" to after the accident already happened. Well, guess what, after the accident happens, there is no more uncertainty, so there is nothing to predict anymore. Prediction typically involves some uncertainty as to what the future holds.
Quote from: Phillip V on April 24, 2013, 02:52:24 PM
Teens Talk More About Economics, but No Better Informed
The nation's "Report Card in Economics," released Wednesday, found no improvement in high-school seniors' economics knowledge from six years ago, on the eve of the crisis. The U.S. Department of Education project surveyed and tested nearly 11,000 12th-graders in 480 American public and private schools.
Like they'll need it.
The only thing they need to know is payday is every other week until you die.
Quote from: Malthus on April 24, 2013, 02:48:02 PM
Quote from: garbon on April 24, 2013, 02:39:32 PM
I don't know why you'd expect a drunk driver to have an accident. The odds clearly show that the expected result of drunk driving is that you get home safely.
I don't "expect a drunk driver to have an accident".
Then a drunk driver who gets into an accident is not something you'd predict and thus it was not predictable. ;)
Quote from: Malthus on April 24, 2013, 02:54:24 PM
Quote from: DGuller on April 24, 2013, 02:50:28 PM
First, that's a comically unhelpful definition. Secondly, no, I don't expect a drunk driver to get into an accident. His expected number of accidents for the trip is 0.01, so in other words, not expected all that much. And no need for ad populum fallacies, counselor.
Point is that you are insisting, for pages and pages, on giving a certain meaning to the word, and wooden-headedly refusing to listen to the obvious fact I'm not using it in that way, and never was.
What, exactly, is that in aid of?
Not in the aid of anything in particular. It started off with me correcting an unimportant incorrect statement, you coming back to it, me expounding on my correction, and then it snowballed into one of those "anti-intellectual/un-intellectual" debates. They're utterly pointless, but by the point I realized I got stuck in it, I also resolved to not let you get away with snowing me in bullshit.
Quote from: Malthus on April 24, 2013, 02:54:24 PM
Quote from: DGuller on April 24, 2013, 02:50:28 PM
First, that's a comically unhelpful definition. Secondly, no, I don't expect a drunk driver to get into an accident. His expected number of accidents for the trip is 0.01, so in other words, not expected all that much. And no need for ad populum fallacies, counselor.
Point is that you are insisting, for pages and pages, on giving a certain meaning to the word, and wooden-headedly refusing to listen to the obvious fact I'm not using it in that way, and never was.
What, exactly, is that in aid of?
But you are using a word but not for what it means. So I guess a fair move at this point would be:
Malthus, please tell us what you mean when you say "If a drunk driver gets into an accident, that bad outcome was predictable"?
Quote from: The Minsky Moment on April 24, 2013, 01:37:50 PM
Quote from: Admiral Yi on April 23, 2013, 06:45:05 PM
Quote from: The Minsky Moment on April 23, 2013, 06:36:25 PM
Savings come out of income. And middle class income is stagnating as well.
Either they can save more or they can expect their net worth to stagnate.
I don't understand.
Sure the middle class could keep apace with double digit net worth gains despite decreasing income by reducing their consumption to third world levels. Except they couldn't because the resulting depression would tank the entire economy and drag down all assets with them.
I'm glad I'm not the only one.
So early I was in part thinking along similar lines to you ?
Quote from: mongers on April 23, 2013, 06:49:12 PM
Quote from: Admiral Yi on April 23, 2013, 06:45:05 PM
Either they can save more or they can expect their net worth to stagnate.
So you have stock markets at near historic highs, built in part on the back of a unprecedented consumer boom. And now you're advocating people take their money 'out' of the economy, so they can rebuild their assets; what could possibly go wrong ?
Quote from: DGuller on April 24, 2013, 02:34:40 PM
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
Wow it only took you 3 or 4 pages to actually read what he was writing...
It was entirely predictable, nay inevitable that a languish thread, as it lengthens, resolves into a debate about semantics and word-meaning. :cool:
Quote from: mongers on April 24, 2013, 03:26:15 PM
It was entirely predictable, nay inevitable that a languish thread, as it lengthens, resolves into a debate about semantics and word-meaning. :cool:
I'm not sure I know what you mean by that. Define "word-meaning"
Quote from: crazy canuck on April 24, 2013, 03:20:57 PM
Quote from: DGuller on April 24, 2013, 02:34:40 PM
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
Wow it only took you 3 or 4 pages to actually read what he was writing...
Quote from: Malthus on April 24, 2013, 02:42:47 PM
Quote from: DGuller on April 24, 2013, 02:34:40 PM
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
You are insisting I'm using a word in a particular way, when I've said many times I'm not, when it is obvious from the first I was not, and when that way doesn't make any sense in context, and when it isn't even the primary meaning of the word - and then claiming that, somehow, this is my mistake. :hmm:
Again, consult a dictionary. This has nothing to do with some special super-secret "lawyer's definition".
Well, Malthus disagrees that it is in fact what he was writing, so obviously you have trouble reading what he's writing as well. :lol:
Quote from: DGuller on April 24, 2013, 03:28:22 PM
Quote from: crazy canuck on April 24, 2013, 03:20:57 PM
Quote from: DGuller on April 24, 2013, 02:34:40 PM
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
Wow it only took you 3 or 4 pages to actually read what he was writing...
Well, Malthus disagrees that it is in fact what he was writing, so obviously you have trouble reading what he's writing as well. :lol:
Its a certainty that it will happen. Anyway you have missed his point all along so I am not going to try where he failed for all these pages.
I still don't know what Malthus was saying unless your best guess was right, DGul. :blush:
Quote from: DGuller on April 24, 2013, 02:56:15 PM
Quote from: Malthus on April 24, 2013, 02:42:47 PM
Quote from: DGuller on April 24, 2013, 02:34:40 PM
Quote from: Malthus on April 24, 2013, 02:25:04 PM
I think you are missing how I'm using the word "predictable", despite numerous explainations and examples. :(
:yes: You are using "predictable" in a way that involves no prediction at all.
You are insisting I'm using a word in a particular way, when I've said many times I'm not, when it is obvious from the first I was not, and when that way doesn't make any sense in context, and when it isn't even the primary meaning of the word - and then claiming that, somehow, this is my mistake. :hmm:
Again, consult a dictionary. This has nothing to do with some special super-secret "lawyer's definition".
You keep moving the discussion of what is "predictable" to after the accident already happened. Well, guess what, after the accident happens, there is no more uncertainty, so there is nothing to predict anymore. Prediction typically involves some uncertainty as to what the future holds.
In your world, no-one is ever allowed to say "wow, that was predictable" after a stupid pratfall? :hmm:
Quote from: garbon on April 24, 2013, 03:02:38 PM
Quote from: Malthus on April 24, 2013, 02:54:24 PM
Quote from: DGuller on April 24, 2013, 02:50:28 PM
First, that's a comically unhelpful definition. Secondly, no, I don't expect a drunk driver to get into an accident. His expected number of accidents for the trip is 0.01, so in other words, not expected all that much. And no need for ad populum fallacies, counselor.
Point is that you are insisting, for pages and pages, on giving a certain meaning to the word, and wooden-headedly refusing to listen to the obvious fact I'm not using it in that way, and never was.
What, exactly, is that in aid of?
But you are using a word but not for what it means. So I guess a fair move at this point would be:
Malthus, please tell us what you mean when you say "If a drunk driver gets into an accident, that bad outcome was predictable"?
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
Quote from: garbon on April 24, 2013, 03:30:12 PM
I still don't know what Malthus was saying unless your best guess was right, DGul. :blush:
My best guess is that Malthus honestly didn't realize that it's about a coin flip whether undiversified portfolio beats a diversified portfolio over the short run. He believed that a diversified portfolio would grow more most of the time (like 80% of the time), and that when that by far likeliest outcome did happen, it was predictable that it would.
Therefore, if my guess of his actual thought process is correct, his use of "predictable" was entirely what any normal person would understand it to mean. It's when he decided to not immediately concede this very minor point that he got snared into an argument, and started throwing every turd within his reach in the hope that something would stick.
Quote from: DGuller on April 24, 2013, 03:02:06 PM
Quote from: Malthus on April 24, 2013, 02:54:24 PM
Quote from: DGuller on April 24, 2013, 02:50:28 PM
First, that's a comically unhelpful definition. Secondly, no, I don't expect a drunk driver to get into an accident. His expected number of accidents for the trip is 0.01, so in other words, not expected all that much. And no need for ad populum fallacies, counselor.
Point is that you are insisting, for pages and pages, on giving a certain meaning to the word, and wooden-headedly refusing to listen to the obvious fact I'm not using it in that way, and never was.
What, exactly, is that in aid of?
Not in the aid of anything in particular. It started off with me correcting an unimportant incorrect statement, you coming back to it, me expounding on my correction, and then it snowballed into one of those "anti-intellectual/un-intellectual" debates. They're utterly pointless, but by the point I realized I got stuck in it, I also resolved to not let you get away with snowing me in bullshit.
The bullshit is comming from you (and garbon, but that's his stock-in-trade --- dare I say, he's "predictable" like that? :P).
Specifically, you attempting to redefine what I said, and then resisting all attempts to say 'woah, that's not what I said at all'.
QuoteYou said that the rich had done better (i.e. got higher return) because they were diversified, and that this result was predictable (i.e. ensured). You are right, you didn't say that diversification ensures higher returns, you just said something that is entirely equivalent to it.
I was not, and never was, using "predictable" to mean "ensured". I never said that "diversification ensures higher returns".
What I said ... well, I've said it a million times already: that the
lack of asset diversification increased the risk of the actual outcome seen here in a way that was, or ought to have been, foreseeable. In short, that the result seen was "predictable", although one could not, of course, predict the future any more than a shaman could actually read entrails.
Note again that "foreseeable" doesn't mean "certain".
Now, in your book, putting words ins someone elses's mouth, insisting they said one thing in the face of them repeatedly saying another, and refusing to back down when told, may all be reasonable.
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
You're confusing the risk factor and the outcome. That his risk factor increased is foreseeable. There is no uncertainty about that. That he actually did get into an accident is not foreseeable, since the odds are overwhelming in either case that he would get home safe.
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
Sure but then I think we've all agreed all along that drunk driving increases the minuscule risk that you will get into an accident.
Quote from: DGuller on April 24, 2013, 03:41:50 PM
Quote from: garbon on April 24, 2013, 03:30:12 PM
I still don't know what Malthus was saying unless your best guess was right, DGul. :blush:
My best guess is that Malthus honestly didn't realize that it's about a coin flip whether undiversified portfolio beats a diversified portfolio over the short run. He believed that a diversified portfolio would grow more most of the time (like 80% of the time), and that when that by far likeliest outcome did happen, it was predictable that it would.
Therefore, if my guess of his actual thought process is correct, his use of "predictable" was entirely what any normal person would understand it to mean. It's when he decided to not immediately concede this very minor point that he got snared into an argument, and started throwing every turd within his reach in the hope that something would stick.
Once again, I'm amazed that you know what I
mean in the face of what I
actually say. Really, 80%? Do tell me more - this is truly fascinating. I love learning what I really think.
Quote from: Malthus on April 24, 2013, 03:45:58 PM
What I said ... well, I've said it a million times already: that the lack of asset diversification increased the risk of the actual outcome seen here in a way that was, or ought to have been, foreseeable.
Oh, but it didn't increase the risk of the actual outcome. As I was repeatedly trying to say, diversification doesn't affect the chance of one portfolio growing more than another portfolio.
Quote from: DGuller on April 24, 2013, 03:46:35 PM
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
You're confusing the risk factor and the outcome. That his risk factor increased is foreseeable. There is no uncertainty about that. That he actually did get into an accident is not foreseeable, since the odds are overwhelming in either case that he would get home safe.
No, I'm not.
How does the statement "the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk" confuse the two? I've said exactly
nothing about the actual odds of him actually getting into an accident. All I've talked about is him increasing his risk factor - nothing else.
Once again, you are adding stuff that is not there.
Quote from: garbon on April 24, 2013, 03:48:06 PM
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
Sure but then I think we've all agreed all along that drunk driving increases the minuscule risk that you will get into an accident.
Hallelujah! I think you've got it!
Quote from: Malthus on April 24, 2013, 03:52:07 PM
Quote from: DGuller on April 24, 2013, 03:46:35 PM
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
You're confusing the risk factor and the outcome. That his risk factor increased is foreseeable. There is no uncertainty about that. That he actually did get into an accident is not foreseeable, since the odds are overwhelming in either case that he would get home safe.
No, I'm not.
How does the statement "the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk" confuse the two? I've said exactly nothing about the actual odds of him actually getting into an accident. All I've talked about is him increasing his risk factor - nothing else.
Once again, you are adding stuff that is not there.
Risk factor = odds (times a constant).
Quote from: Malthus on April 24, 2013, 03:53:36 PM
Quote from: garbon on April 24, 2013, 03:48:06 PM
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
Sure but then I think we've all agreed all along that drunk driving increases the minuscule risk that you will get into an accident.
Hallelujah! I think you've got it!
I wouldnt be so quick there. I think he is implying what DGuller continues to say about the second part they keep saying you are missing....
Quote from: crazy canuck on April 24, 2013, 03:57:00 PM
Quote from: Malthus on April 24, 2013, 03:53:36 PM
Quote from: garbon on April 24, 2013, 03:48:06 PM
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
Sure but then I think we've all agreed all along that drunk driving increases the minuscule risk that you will get into an accident.
Hallelujah! I think you've got it!
I wouldnt be so quick there. I think he is implying what DGuller continues to say about the second part they keep saying you are missing....
This is truly a strange experience.
I say stuff, but really, I might as well save the electrons.
Did anyone predict the conversation would go like this?
Quote from: DGuller on April 24, 2013, 03:56:06 PM
Quote from: Malthus on April 24, 2013, 03:52:07 PM
Quote from: DGuller on April 24, 2013, 03:46:35 PM
Quote from: Malthus on April 24, 2013, 03:34:35 PM
That the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk?
Is this some sort of big mystery?
You're confusing the risk factor and the outcome. That his risk factor increased is foreseeable. There is no uncertainty about that. That he actually did get into an accident is not foreseeable, since the odds are overwhelming in either case that he would get home safe.
No, I'm not.
How does the statement "the drunk driver foolishly increased his risk that an accident would happen in a way that was totally foreseeable by driving while drunk" confuse the two? I've said exactly nothing about the actual odds of him actually getting into an accident. All I've talked about is him increasing his risk factor - nothing else.
Once again, you are adding stuff that is not there.
Risk factor = odds (times a constant).
Right. And what, Mr. Mathematics, have I said about his "risk factor" in my statement?
That it has "increased" because of his drinking.
As you yourself put it,
QuoteThat his risk factor increased is foreseeable. There is no uncertainty about that.
So, exactly what are you basing your "you have confused risk factor with outcome" on? Please, do tell.
Quote from: Jacob on April 24, 2013, 04:00:22 PM
Did anyone predict the conversation would go like this?
Quote from: mongers on April 24, 2013, 03:26:15 PM
It was entirely predictable, nay inevitable that a languish thread, as it lengthens, resolves into a debate about semantics and word-meaning. :cool:
:whistle:
Quote from: Malthus on April 24, 2013, 03:59:34 PM
This is truly a strange experience.
I say stuff, but really, I might as well save the electrons.
I thought you should have stopped repeating yourself after the fourth time it became clear they were not actually reading what you wrote.
Quote from: mongers on April 24, 2013, 04:06:53 PM
Quote from: Jacob on April 24, 2013, 04:00:22 PM
Did anyone predict the conversation would go like this?
Quote from: mongers on April 24, 2013, 03:26:15 PM
It was entirely predictable, nay inevitable that a languish thread, as it lengthens, resolves into a debate about semantics and word-meaning. :cool:
:whistle:
Are you trying to say the odds of this happening increased because this is languish or that this is languish and so it was a certainty?
Quote from: crazy canuck on April 24, 2013, 04:08:55 PM
Quote from: mongers on April 24, 2013, 04:06:53 PM
Quote from: Jacob on April 24, 2013, 04:00:22 PM
Did anyone predict the conversation would go like this?
Quote from: mongers on April 24, 2013, 03:26:15 PM
It was entirely predictable, nay inevitable that a languish thread, as it lengthens, resolves into a debate about semantics and word-meaning. :cool:
:whistle:
Are you trying to say the odds of this happening increased because this is languish or that this is languish and so it was a certainty?
Ambiguity is a bitch, isn't it. :)
Quote from: crazy canuck on April 24, 2013, 04:07:51 PM
Quote from: Malthus on April 24, 2013, 03:59:34 PM
This is truly a strange experience.
I say stuff, but really, I might as well save the electrons.
I thought you should have stopped repeating yourself after the fourth time it became clear they were not actually reading what you wrote.
You are right. :weep:
Quote from: Malthus on April 24, 2013, 04:02:56 PM
Right. And what, Mr. Mathematics, have I said about his "risk factor" in my statement?
That it has "increased" because of his drinking.
As you yourself put it,
QuoteThat his risk factor increased is foreseeable. There is no uncertainty about that.
So, exactly what are you basing your "you have confused risk factor with outcome" on? Please, do tell.
Garbon asked you about predictable outcome, you answered with predictable increased risk factors. So let's at least establish that both these terms were in play.
What the difference between risk factors and outcome? Risk factor increase can indeed be very predictable. If you put a second bullet in the revolver, your risk factor is doubled for the game of Russian Roulette.
Outcome has an element of chance in it, which very often is a huge part of the equation. Most of the outcome of the drunk driver's trip is due to chance, or factors we can't measure/understand and thus assume to be chance. That makes the bad outcome for a single trip not very predictable, even with a vastly increased risk factor.
Exactly how drunk are we talking about? I think your model fails at Ide levels.
Quote from: The Brain on April 24, 2013, 04:18:48 PM
Exactly how drunk are we talking about? I think your model fails at Ide levels.
:lol:
Quote from: crazy canuck on April 24, 2013, 04:07:51 PM
Quote from: Malthus on April 24, 2013, 03:59:34 PM
This is truly a strange experience.
I say stuff, but really, I might as well save the electrons.
I thought you should have stopped repeating yourself after the fourth time it became clear they were not actually reading what you wrote.
Any reason why you didn't quote the post where Malthus confirmed that he indeed meant what I thought he meant all the way in the beginning, and that what he meant was in fact wrong? I'm not surprised that Malthus ignored that post, the best play he has left is to not draw attention to it and pretend that I'm hardheaded moron, but the motivation behind your selective reading is a little more puzzling.
Quote from: DGuller on April 24, 2013, 03:51:23 PM
Quote from: Malthus on April 24, 2013, 03:45:58 PM
What I said ... well, I've said it a million times already: that the lack of asset diversification increased the risk of the actual outcome seen here in a way that was, or ought to have been, foreseeable.
Oh, but it didn't increase the risk of the actual outcome. As I was repeatedly trying to say, diversification doesn't affect the chance of one portfolio growing more than another portfolio.
Here it is again.
Quote from: DGuller on April 24, 2013, 04:22:28 PM
Quote from: crazy canuck on April 24, 2013, 04:07:51 PM
Quote from: Malthus on April 24, 2013, 03:59:34 PM
This is truly a strange experience.
I say stuff, but really, I might as well save the electrons.
I thought you should have stopped repeating yourself after the fourth time it became clear they were not actually reading what you wrote.
Any reason why you didn't quote the post where Malthus confirmed that he indeed meant what I thought he meant all the way in the beginning, and that what he meant was in fact wrong? I'm not surprised that Malthus ignored that post, the best play he has left is to not draw attention to it and pretend that I'm hardheaded moron, but the motivation behind your selective reading is a little more puzzling.
I wasnt pretending. You seem to have some pretty firm blinders affixed on this one.
Well I'm glad one of the few potentially interesting economics threads on Languish in awhile is now just DGuller and Malthus arguing about the word predictable.
FWIW, I think such an outcome here was highly predictable.
Quote from: crazy canuck on April 24, 2013, 04:27:03 PM
Quote from: DGuller on April 24, 2013, 04:22:28 PM
Quote from: crazy canuck on April 24, 2013, 04:07:51 PM
Quote from: Malthus on April 24, 2013, 03:59:34 PM
This is truly a strange experience.
I say stuff, but really, I might as well save the electrons.
I thought you should have stopped repeating yourself after the fourth time it became clear they were not actually reading what you wrote.
Any reason why you didn't quote the post where Malthus confirmed that he indeed meant what I thought he meant all the way in the beginning, and that what he meant was in fact wrong? I'm not surprised that Malthus ignored that post, the best play he has left is to not draw attention to it and pretend that I'm hardheaded moron, but the motivation behind your selective reading is a little more puzzling.
I wasnt pretending. You seem to have some pretty firm blinders affixed on this one.
And again you ignore the part that kind of contradicts everything you wrote. Yes, Malthus did repeat himself a lot, but as it turns out I did in fact understand everything that he was saying correctly, and what he repeated was in fact based on a misconception.
Kind of telling that as soon as the pair of Canadian lawyers realize that they're on the losing side of the argument, they just slink away, parting with the claims of me being an obstinate moron who can't read, rather than with concessions. Oh, well, if Yi was correct in another thread a couple of days ago, it's just karma for me. :Embarrass:
lol, ever occur to you that people realize you just arent listening...
Quote from: crazy canuck on April 24, 2013, 04:55:45 PM
lol, ever occur to you that people realize you just arent listening...
They're not listening themselves if that's what their conclusion is. In the post that you're ignoring, Malthus confirmed that I was listening correctly, and that we all initially had the same understanding of what "predictable" meant.
I'm always concerned when DGul and I end on the same side of an issue. -_-
Quote from: Malthus on April 24, 2013, 02:14:25 PM
You are fighting the hypothetical again.
Read carefully: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
I'm confused now. How does the probability of having an accident in the near future depend on whether you've already had it? Have I missed the invention of time travel?
Quote from: DGuller on April 24, 2013, 04:23:12 PM
Quote from: DGuller on April 24, 2013, 03:51:23 PM
Quote from: Malthus on April 24, 2013, 03:45:58 PM
What I said ... well, I've said it a million times already: that the lack of asset diversification increased the risk of the actual outcome seen here in a way that was, or ought to have been, foreseeable.
Oh, but it didn't increase the risk of the actual outcome. As I was repeatedly trying to say, diversification doesn't affect the chance of one portfolio growing more than another portfolio.
Here it is again.
Odd then that we got on a tangent from here into what is predictable.
Quote from: garbon on April 24, 2013, 05:16:58 PM
I'm always concerned when DGul and I end on the same side of an issue. -_-
Hey, behind the scenes, I triple-checked my reasoning during this debate, and ran Excel simulations of diversified and undiversified portfolios (with admittedly rather crude assumptions). Why do you think I checked myself so thoroughly? :hug:
Quote from: Iormlund on April 24, 2013, 05:19:50 PM
Quote from: Malthus on April 24, 2013, 02:14:25 PM
You are fighting the hypothetical again.
Read carefully: if I drink and drive and get into an accident because of that, this is "not a predictable result" according to you?
I'm confused now. How does the probability of having an accident in the near future depend on whether you've already had it? Have I missed the invention of time travel?
You have to go with something like with conventional wisdom it isn't surprising that a drunk driver would get in an accident. The same then can be applied to someone who lost net worth with non-diversified holdings...though I'm not sure in either case that's really fair and instead really the gift of hindsight.
Quote from: DGuller on April 24, 2013, 05:22:20 PM
Quote from: garbon on April 24, 2013, 05:16:58 PM
I'm always concerned when DGul and I end on the same side of an issue. -_-
Hey, behind the scenes, I triple-checked my reasoning during this debate, and ran Excel simulations of diversified and undiversified portfolios (with admittedly rather crude assumptions). Why do you think I checked myself so thoroughly? :hug:
:lol: :P
Quote from: OttoVonBismarck on April 24, 2013, 04:27:41 PM
Well I'm glad one of the few potentially interesting economics threads on Languish in awhile is now just DGuller and Malthus arguing about the word predictable.
FWIW, I think such an outcome here was highly predictable.
Yes, I agree on both counts.
Now let someone twist that. :P
That said, D, my work at least very lightly deals with prediction. Pharmas wouldn't pay me if I wasn't suggesting something about what might happen with their product. :D
Quote from: mongers on April 24, 2013, 05:27:36 PM
Quote from: OttoVonBismarck on April 24, 2013, 04:27:41 PM
Well I'm glad one of the few potentially interesting economics threads on Languish in awhile is now just DGuller and Malthus arguing about the word predictable.
FWIW, I think such an outcome here was highly predictable.
Yes, I agree on both counts.
Now let someone twist that. :P
I think that's fine as there is probably a decent chance that any Languish thread will devolve into semantics. So far to say that one could reasonably predict a thread heading towards semantics at some point. Sort of like how our threads used to invariably involve Giant Ants of Brest-Litovsk or the ACW. :(
Quote from: garbon on April 24, 2013, 05:30:56 PM
Quote from: mongers on April 24, 2013, 05:27:36 PM
Quote from: OttoVonBismarck on April 24, 2013, 04:27:41 PM
Well I'm glad one of the few potentially interesting economics threads on Languish in awhile is now just DGuller and Malthus arguing about the word predictable.
FWIW, I think such an outcome here was highly predictable.
Yes, I agree on both counts.
Now let someone twist that. :P
I think that's fine as there is probably a decent chance that any Languish thread will devolve into semantics. So far to say that one could reasonably predict a thread heading towards semantics at some point. Sort of like how our threads used to invariably involve Giant Ants of Brest-Litovsk or the ACW. :(
So are you saying my post was 'predictable' ? :mad:
:P
Quote from: mongers on April 24, 2013, 05:34:03 PM
So are you saying my post was 'predictable' ? :mad:
:P
Within the expected range of your posting style, sure. :P
This thread needs more ranting about 1%ers and less lawyers. :mad:
Speaking of the rich getting better off, the Bank of England today confirmed that its subsidised lending programme to businesses will apply to property investors.
This means that the buy-to-let market in the South East of England is going to get yet another state-guaranteed shot in the arm, with increasing amounts of money chasing the limited housing stock in the region. Meanwhile, planning regulation reform has, it is revealed, not actually resulted in any great change in the number of new houses being built.
Looks like another property bubble is on the way.
One also has to wonder how the UK economy might be better off if there were not such a large intergenerational transfer of wealth going on through the rental sector right now, siphoning off half of take-home pay from young consumers to wealthy older people.
Wealthy older people rock.
I understand that austerity is considered a bit of a failure in the UK these days, even by former proponents. Is that accurate Ark?
Where there's a will there's a way.
You are all out of my will.
Quote from: Jacob on April 25, 2013, 11:22:47 AM
I understand that austerity is considered a bit of a failure in the UK these days, even by former proponents. Is that accurate Ark?
Yes, I detect that the wide support for austerity is eroding somewhat. The government's plan to let sterling devalue, slash state spending and unleash the private sector doesn't seemed to have worked. Our imports, including most of our energy requirements, are more expensive; state spending has fallen by less than a rounding error; and the private sector is sitting on buckets of cash, holding wages down, and it turns out during a global economic crisis our usual export markets aren't looking to buy British.
Quote from: Warspite on April 25, 2013, 04:01:13 AM
Speaking of the rich getting better off, the Bank of England today confirmed that its subsidised lending programme to businesses will apply to property investors.
This means that the buy-to-let market in the South East of England is going to get yet another state-guaranteed shot in the arm, with increasing amounts of money chasing the limited housing stock in the region. Meanwhile, planning regulation reform has, it is revealed, not actually resulted in any great change in the number of new houses being built.
Looks like another property bubble is on the way.
One also has to wonder how the UK economy might be better off if there were not such a large intergenerational transfer of wealth going on through the rental sector right now, siphoning off half of take-home pay from young consumers to wealthy older people.
Where do I apply for this program plz?
Quote
Based on the Non-Massaged Data, the US is Back in Recession
By Phoenix Capital Research
Beneath all of the bogus economic data, the US economy is tanking again.
One of the biggest games played by the bean counters in Washington in the US is the overstatement of GDP growth by understating inflation.
Consider this simple example. Let's say that the US GDP grew by 10% last year. Now let's say that inflation also grew by 10%. In this scenario, real inflation adjusted GDP growth was ZERO. However, announcing ZERO GDP growth is a major problem politically.
So what do the Feds do? They claim that inflation was just 8%, and BOOM you've got 2% GDP growth announced for a year in which real GDP growth was actually zero.
This game is played all the time via a metric called the GDP "deflator." Technically what this is meant to do is remove the effects of inflation from the GDP growth numbers to show what real growth was.
However, what it actually ends up being is an accounting gimmick that allows the numbers to overstate GDP growth.
For this reason, when I look at the US economy's growth I prefer to use its nominal GDP numbers. These numbers do not include a deflator metric. As such they're much closer to showing the actual growth as opposed to the gimmicked "real GDP" numbers.
With that in mind, take a look at the chart below:
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fwww.zerohedge.com%2Fsites%2Fdefault%2Ffiles%2Fimages%2Fuser20289%2Fimageroot%2F2014%2F07%2Fnominal%2520GDP.png&hash=bcdec5bd6e5d6c0eb05cabfc45e6c6063c8f3807)
As you can see, the US economy is once again slowing down rapidly with a sub-4 reading. I've circled all of the other times the US economy has registered a reading like this in the last 40 years.
ALL of them were periods that were later identified as recessions.
So the Fed is once again facing a recession... at a time when it has already cut interest rates to zero and engaged in just about every monetary loosening imaginable. To top it off, inflation is already appearing due to the Fed's previous actions.
There is a term for slow growth and high inflation: it's stagflation. Sure it doesn't show up in the official data. But then again, when was the last time reality did show up there?
Wow, this genius fails to read his own graph properly.
Seems like every goofball with an audience wants to be the first to proclaim we're in a recession.
Quote from: derspiess on July 25, 2014, 04:32:46 PM
Seems like every goofball with an audience wants to be the first to proclaim we're in a recession.
That's because we never got out of it.
Quote from: CountDeMoney on July 25, 2014, 04:33:37 PM
Quote from: derspiess on July 25, 2014, 04:32:46 PM
Seems like every goofball with an audience wants to be the first to proclaim we're in a recession.
That's because we never got out of it.
Some people got out of it, though arguable the real winners were in it for about a day. :ph34r:
Quote from: Ed Anger on April 25, 2013, 11:33:27 AM
You are all out of my will.
Your estate is going to be divided 23 ways as it is.
His argument defeats itself. We're in recession because the other times we had nominal growth less than 4% we called them recessions. But we called those recessions because after deflating the nominal growth rate by inflation we had negative real growth.
Quote from: Admiral Yi on July 25, 2014, 05:01:55 PM
His argument defeats itself. We're in recession because the other times we had nominal growth less than 4% we called them recessions. But we called those recessions because after deflating the nominal growth rate by inflation we had negative real growth.
Yeah, essentially he decided not to trust the GDP deflator, so instead he picked it to be 4% at all times.
Quote from: Valmy on July 25, 2014, 04:48:14 PM
Quote from: Ed Anger on April 25, 2013, 11:33:27 AM
You are all out of my will.
Your estate is going to be divided 23 ways as it is.
It is? Huh. News to me.
Quote from: Ed Anger on July 25, 2014, 05:46:03 PM
Quote from: Valmy on July 25, 2014, 04:48:14 PM
Quote from: Ed Anger on April 25, 2013, 11:33:27 AM
You are all out of my will.
Your estate is going to be divided 23 ways as it is.
It is? Huh. News to me.
You'll be dead. Don't worry about it. The other 22 and I can't wait... sorry, NSA... we'll just wait as long as necessary...
Quote from: DGuller on July 25, 2014, 05:10:23 PM
Quote from: Admiral Yi on July 25, 2014, 05:01:55 PM
His argument defeats itself. We're in recession because the other times we had nominal growth less than 4% we called them recessions. But we called those recessions because after deflating the nominal growth rate by inflation we had negative real growth.
Yeah, essentially he decided not to trust the GDP deflator, so instead he picked it to be 4% at all times.
You should have to get some sort of license before you are allowed to use graphs and statistics.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fi.stack.imgur.com%2Fk2eEh.gif&hash=3bb8466541ad3015c5a493281fa20c9f2a0cabff)
Quote from: Razgovory on July 26, 2014, 12:09:27 AM
You should have to get some sort of license before you are allowed to use graphs and statistics.
Caveat emptor.