Real Inflation Rate vs. fake lies CPI
- Thread starter The Kin2
- Start date
so who cares??... M3 was meaningless anyway... dont believe everything you read... perhaps talk to your E101 instructor see what he thinks of velocity of money and a few other parameters, apparently unknown to the j.williamses of this world...Quote from The Kin2:
Not really -- M3 publishing has been discontinued.
UNFORTUNATELY, Your econ 101 instructor would never make money in the real markets.
If that's someone to take advice from...
Quote from 2cents:
your right, better take advice from people who dont understand the basics)) much better!
Like Soros would says, SOCIAL SCIENCES ARE NOT SCIENCES!
What works is real, what doesn't work, even if they claim to understand the basics, is false.
Let's review our basic theories:
1)Theory:The markets are always seeking for equilibrium
Reality:The markets are always at disequilibrium. Explain oil's huge gain in price even after it made it to the 60s? Speculative demand and reflexivity. But equilibrium would mean new supply would kick in and demand would weaken, neither have happened to any significant extent.
2)Theory:The markets are random and efficient
Reality: Large cap blue chips are efficient, and the market is usually random, but there are those small periods of times when the market can be predicted with sustained consistentcy.
3)Theory:EBITDA is a good measure of how much debt a company can take on
Reality: Depreciation expenditures in the long run often match capital expenditures necessary to keep a company competitive. So using EBITDA as a measure of how much debt a company can take on will surely weaken its position in the industry in most cases, and finally, lead it to oblivion.
4)Theory:Entrepreneurs, being profit-driven, better society
Reality: Bill Gates and many others have proven this one true. However, go ask your average CEO that tweaks earnings, lobbied Congress(what a great institution for deciding accounting issues)and gunned down the FASB for over a decade (with shareholder money), to not expense options. And I bet Nick Leeson and Ken Lay were profit-driven too. Let's not forget Ivan Boesky and Michael Milken.
The financial industry is basically profit-driven and there's no wealth created(uhh wealth is transferred). Now, before I get kicked off this forum, I'm not against trading, I love it and make erm satisfactory returns from it. But it proves theory to be false, that we're bettering society magically by clicking mouses(Hmm, maybe more employment and consumption?).
5)Theory:Capital flows to the highest yield
Reality:There's a reason capital is not flowing that rapidly into emerging economies, and why the Asian currencies lost ground against the USD even though the overnight interest rates were in the double digits. And why the best mutual funds may not grow while Fidelity Magellan becomes more like an index fund with tens of billions of dollars.
6)You can't beat the market
Reality: Oh yes you can
7)The market is always right
Reality:No it ain't due to biases and imperfect comprehension by participants.
1)Theory:The markets are always seeking for equilibrium
Reality:The markets are always at disequilibrium. Explain oil's huge gain in price even after it made it to the 60s? Speculative demand and reflexivity. But equilibrium would mean new supply would kick in and demand would weaken, neither have happened to any significant extent.
2)Theory:The markets are random and efficient
Reality: Large cap blue chips are efficient, and the market is usually random, but there are those small periods of times when the market can be predicted with sustained consistentcy.
3)Theory:EBITDA is a good measure of how much debt a company can take on
Reality: Depreciation expenditures in the long run often match capital expenditures necessary to keep a company competitive. So using EBITDA as a measure of how much debt a company can take on will surely weaken its position in the industry in most cases, and finally, lead it to oblivion.
4)Theory:Entrepreneurs, being profit-driven, better society
Reality: Bill Gates and many others have proven this one true. However, go ask your average CEO that tweaks earnings, lobbied Congress(what a great institution for deciding accounting issues)and gunned down the FASB for over a decade (with shareholder money), to not expense options. And I bet Nick Leeson and Ken Lay were profit-driven too. Let's not forget Ivan Boesky and Michael Milken.
The financial industry is basically profit-driven and there's no wealth created(uhh wealth is transferred). Now, before I get kicked off this forum, I'm not against trading, I love it and make erm satisfactory returns from it. But it proves theory to be false, that we're bettering society magically by clicking mouses(Hmm, maybe more employment and consumption?).
5)Theory:Capital flows to the highest yield
Reality:There's a reason capital is not flowing that rapidly into emerging economies, and why the Asian currencies lost ground against the USD even though the overnight interest rates were in the double digits. And why the best mutual funds may not grow while Fidelity Magellan becomes more like an index fund with tens of billions of dollars.
6)You can't beat the market
Reality: Oh yes you can
7)The market is always right
Reality:No it ain't due to biases and imperfect comprehension by participants.
if u can't see the flaws in j.williams' simplistic reasoning / thesis, its gonna take more than a few links matey... sorry, better things to do with my time... plus as globalfinancier aptly said, as far as trading, what really matters is what the mkt is doing... no point in being 'right' but broke ;-) am just calling the bs here... but dont lose sleep over it