June 26, 2017

NO ONE HAS IT HARDER THAN THEIR FATHER DID:

Warren Buffett's disarmingly simple investment strategy, explained by big data (Mitch Tuchman, June 26, 2017, Market Watch)

 Just because Buffett talks happy, that doesn't mean stocks are going to go up.

Rather, stocks go up and it doesn't surprise Buffett when they do. When the contrary happens -- inevitably, the economy slips and stocks fall back -- Buffett doesn't try to dress up bad news as good.

In fact, as he often counsels his own managers, bring the bad news first. He does the same thing when talking to his investors.

All of this neatly lines up with the long-term investment experience. Bull markets last longer than bear markets. Stocks tend to outpace inflation. Prudently invested money compounds.

To reject these ideas as mistaken or naive is to reject the experience of decades upon decades of economic growth. As Buffett told investors in his 2015 letter:

American GDP per capita is now about $56,000. As I mentioned last year that -- in real terms -- is a staggering six times the amount in 1930, the year I was born, a leap far beyond the wildest dreams of my parents or their contemporaries. U.S. citizens are not intrinsically more intelligent today, nor do they work harder than did Americans in 1930. Rather, they work far more efficiently and thereby produce far more. This all-powerful trend is certain to continue: America's economic magic remains alive and well.

Consider that the main "problem" we face as a society is that wealth creation requires decreasing labor inputs.
Posted by at June 26, 2017 5:04 PM

  

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