Trading during hyperinflation/hyperdebasement

[Newc2]

I trade. Trading feels great. Say a realistic 20-30% a year on a decent bank roll.

Enjoy life (when not glued to screens).

But is it all an illusion? Are we really trading in quicksand?

As we know, inflation is much higher than we’re always led to believe. Especially on the things that matter.

Then there is the higher (and non-deferred) taxes from active trading.

Maybe that 20-30% return is a loss in real terms.

May be this is why there aren’t many famous wealthy traders

Thoughts?

 

[Nobert]

Maybe that 20-30% return is a loss in real terms.

In one supermarket next to me, in 2016, 0.5 L bottle of simple mineral water was € 0.25. Now it's 0.75 .

300% up in 5 years.

Thus, maybe.

 

[smallfil]

I trade. Trading feels great. Say a realistic 20-30% a year on a decent bank roll.

Enjoy life (when not glued to screens).

But is it all an illusion? Are we really trading in quicksand?

As we know, inflation is much higher than we’re always led to believe. Especially on the things that matter.

Then there is the higher (and non-deferred) taxes from active trading.

Maybe that 20-30% return is a loss in real terms.

May be this is why there aren’t many famous wealthy traders

Thoughts?

Ever hear of Market Wizards book by Jack Schwager? There the top traders and hedge fund managers are featured. Had a conversation with a friend the other day. The topic was inflation and how the prices of a lot of goods have risen. I said, what are you going to do, except pay for it if you need it? Doesn't matter as long as you have more monies to pay for what you need. In that sense, you are ahead of the curve aren't you? As long as we continue trading and making a decent amount from our gains, we should be okay, I told her. Money compounds at a faster rate too, when trading. That assumes you know how to trade and making monies on a consistent basis.

 

[SunTrader]

Gasoline prices currently are sitting right in the middle of the range of the past 13 years or so.

Inflation will matter only if it continues to substantially rise nearer the top of the range. Everything needs to be transported, including fuel itself. So everything eventually gets priced higher when transportation costs go up.

Focus on what really matters, not anecdotal here or there "do you believe this".

 

[Tavurth]

In hyperinflation the real struggle is preservation of capital, and especially preservation of the value behind capital.

I've been in many countries where the local currency is going through massive inflation, it's usually a good time to setup shop there as you can arbitrage your income somewhat.

In a case like that of 1920s Germany, just shifting to the sidelines (if you can find sidelines) is hugely profitable, as you don't lose.

It doesn't matter if your gold is locked in Fort Knox, if a solid gold asteroid is mined in near earth orbit that vault is now effectively full of paper.

 

[RedDuke]

Big difference is that dollar enjoys reserve currency status. How long it will matter, no one knows of course

 

[Damanuelman]

I mean hot cheetos use to be $0.89 at my local mini mart and now they're $4.99. Quite the travesty if you ask me

 

[TimtheEnchanter]

I do not know about hyperinflation, but in 1981 Treasury Bond was at 15%, you just keep your fingers crossed and think if it goes any higher we are fucked anyway, so you lock in your money and wait for a sure 15% plus return, year after year...no need to trade and this has been done in the late 70s 80s.

 

[Specterx]

I trade. Trading feels great. Say a realistic 20-30% a year on a decent bank roll.

Enjoy life (when not glued to screens).

But is it all an illusion? Are we really trading in quicksand?

As we know, inflation is much higher than we’re always led to believe. Especially on the things that matter.

Then there is the higher (and non-deferred) taxes from active trading.

Maybe that 20-30% return is a loss in real terms.

May be this is why there aren’t many famous wealthy traders

Thoughts?

What else could you be doing with the money to earn a higher return? Not much.

If your trading generates enough net income to live on plus grow your capital base by at least 5-10% annually, then you are as set as anyone can be in such a risky, highly uncertain profession with utterly non-transferable skills.

If it doesn't... well, you're eating your seed corn and will eventually starve.

 

[TimtheEnchanter]

Just buy a bag of silver coins to have some money for toilet paper and invest the rest in gold, ammo, canned goods, weapons, tampons, cigs, medicine, etc.