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2009-current: The greatest risk-adjusted run in the history of the stock market?

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odysseus2000
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Re: 2009-current: The greatest risk-adjusted run in the history of the stock market?

#502339

Postby odysseus2000 » May 23rd, 2022, 5:15 pm

murraypaul wrote:
odysseus2000 wrote:Everyone & every business is far more productive than 20 years ago.


And in 2000, everyone and every business was far more productive than in 1980.


Exactly & living standards in 2000 were a lot better than in 1980 & that process has continued.

Some business in 2000 that were just potential, low turn over, small or no profits became giants like Amazon, others went bust.

An investors job is to find the Amazon’s & avoid the business that will go bust.

All this macro stuff about productivity, debt etc is noise that has to be ignored.

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vand
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Re: 2009-current: The greatest risk-adjusted run in the history of the stock market?

#533902

Postby vand » October 1st, 2022, 11:45 am

OhNoNotimAgain wrote:
odysseus2000 wrote:All of these arguements assume that what happened decades ago is what will happen again.

There has been a huge increase in productivity and personal wealth like nothing ever before and that process is on going.


Regards,


No, we have just experienced a massive amount of money printing and interest rates at zero.
UK productivity has not risen.

https://www.reuters.com/business/weak-i ... 20(Reuters),new%20research%20published%20on%20Monday.


Correct.
A lot of the returns we have seen across paper asset classes has been the result of financial engineering instead of real increases in productivity and viable long term businesses.

Companies buying back stock.
"Investment" in housing.
Debt used for consumption.

One interesting metric to see is the proportion of zombie companies in the S&P - typically this falls during periods of economic expansion and then spikes when we have a recession, and this is a pattern we saw all the way up until 2013 when, for the first time in history, the proportion of zombie companies increased even as the economy continued growing all the way into 2021.

I'm not saying that something fundamental hasn't changed so that justifies a higher proportion of zombies - maybe it has, but the trend is alarming and probably hints at financial wizardry that will need to unwind at some point.

Mike Maloney's recent vid went into this:

https://www.youtube.com/watch?v=FKYx3ePSBRw


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