Berkeley CSUA MOTD:Entry 54607
Berkeley CSUA MOTD
2019/04/20 [General] UID:1000 Activity:popular

2013/2/17-3/26 [Finance/Investment] UID:54607 Activity:nil
2/16    Stocks for the long run? Maybe not:
        \_ um, ok, so what are better alternative investments?
           \_ Real Estate? Gold? Bonds? CDs?
              They all whooped stocks in the last decade.
              I believe in a balanced approach.
2019/04/20 [General] UID:1000 Activity:popular

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2013/7/29-9/16 [Finance/Investment] UID:54717 Activity:nil
        Only 28% of millionaires consider themselves wealthy. So it is
        not just my wife!
        \_ People have been using the term "millionaire" as a synonym for
           "rich" for a very long time.  But there's this little thing called
           inflation.  Having a million dollars in 1900 is roughly equivalent
2013/7/31-9/16 [Reference/RealEstate, Finance/Investment] UID:54720 Activity:nil
7[31    Suppose you have a few hundred thousand dollars in the bank earning
        minimum interest rate and you're not sure whether you're going to
        buy a house in 1-5 years. Should one put that money in a more
        risky place like Vanguard ETFs and index funds, given that the
        horizon is only 1-5 years?
        \_ I have a very similar problem, in that I have a bunch of cash
2013/5/17-7/3 [Finance/Investment] UID:54679 Activity:nil
5/17    Tech stocks at all time high & Bay Area traffic and housing crisis
        is now worse than 2001. BUBBLE 2.0 BEWARE!!!
        \_ This time it is no bubble, at least not yet. Wake me up again
           when the Nasdaq hits an inflation adjusted record.
        \_ I don't know if this bubble qualifies as a tech bubble or a bubble
           at all.  Last weekend I saw hiring signs at McDonald's, Macy's and
2013/1/16-2/17 [Industry/Startup, Finance/Investment] UID:54582 Activity:nil
1/16    Fred Wilson says you should focus on the cash value of your
        options, not the percentages:
        \_ Or at least, so says a VC trying increase his profit margin...
        \_ A VC wants to keep as much of the stock for themselves (and give
           as little to employees as possible).  That maximizes their return.
2012/12/21-2013/1/24 [Industry/Startup, Finance/Investment] UID:54568 Activity:nil
        Yahooers in Sunnyvale don't seem to average 170K/year.
        \_ Googlers average $104k/yr? Uh huh.
           \_ what is it suppose to be?
                 Google Sr. Software Engineer in Sunnyvale averages $193k in total pay,
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Tweet IF THERE is an article of faith among investors, it is that equities are the best investment over the long run, far better than government bonds. But research from Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School into returns since 1900, published this week in the "Credit Suisse Global Investment Returns Yearbook", suggests that this belief is misleading. Their data show, for example, that global bonds have delivered a better return than equities since the start of 1980. Thirty-three years is a long time by most people's reckoning. Most investment research has focused on America, where there are a lot of finance professors. America was the great winner of the 20th century, both militarily and economically. Although its success seems obvious now, it was not the only great power a century ago nor was it the most-favoured market of early-20th-century investors. St Petersburg The chart shows that in the 50 years after the end of the American civil war, the Russian stockmarket easily outperformed Wall Street. Russia, with its vast territory and industrialising workforce, was seen as the exciting growth opportunity for the 20th century. You can imagine the investment-bank research notes of the day. The tsar's rule was erratic and a new technocratic government is in place. Now that the Russian market has reopened for business, St Petersburg is a buy." Within a couple of years, however, investors in Russian equities and in government bonds and bills had all been wiped out. Austria has been another great historical disappointment. In the early years of the 20th century Austria-Hungary was still one of the great powers of the world, with an empire spanning much of south-eastern Europe. Defeat in two world wars, the break-up of the empire and two periods of hyperinflation meant that Austria had the worst real return of all 20 countries in the London Business School data, not just for equities but for government bonds and bills as well. An American investor who placed $1m in Austrian government bills in 1900 would now have just $100 left. Austria shows that equities do not always pay off over the long term. Between 1900 and 2012 an investor in Austrian equities would have endured a period of 97 consecutive years of real losses. Investors in Italy and Belgium suffered real losses over periods lasting more than 70 years. The inclusion of Russia and Austria in the database (plus China, where investors also suffered a 100% loss in 1949) is one reason why the professors show a lower historical global real annual return from equities (5% versus 54%) than they did in the 2012 edition of the yearbook. The other reason is that the authors have moved to a weighting based on market capitalisation rather than on GDP when compiling the global index. That shift lowered the contribution of the successful American market. Indeed, American investors may not realise how lucky they were. The real return from American equities between 1900 and 2012 averaged 63% a year; Looking ahead the professors think that investors are unlikely to be as lucky again. Low real interest rates, which many people see as a bullish signal for the stockmarket, have historically been associated with low, not high, equity returns. That is a problem because of the unrealistic assumptions many investors have made. Charities and endowments tend to spend 4% of their portfolios each year; if their real return is only 3%, they will steadily deplete their spending power. The sponsors of American corporate-pension plans still expect 76% nominal returns from their portfolios, and fund their schemes accordingly. That is way above the historical experience of stockmarket returns. Congress has relieved the pressure on pension-plan funding by allowing companies to fiddle with the discount rate so as to make their liabilities look smaller. But as Mr Marsh remarks, this approach is akin to a homeowner who, upon hearing of the approach of a hurricane, decides not to board up his house but to smash his barometer. Subscribe to The Economist and get the week's most relevant news and analysis. Policymakers and business men at least see some light on the horizon * Next in Europe X French foreign policy The Bamako effect Will France's intervention in Mali make Franois Hollande popular at home? Rich EU countries fret over all the Romanians and Bulgarians heading their way * Next in Europe X Charlemagne Europe l'Hollandaise Franois Hollande's flawed vision for Europe * Next in Britain X The export drought Better out than in Britain is an open, trading nation that does not export enough. 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