Stock market hasn't grown in 100 years? (Question for High IQ Cells)

noodlelover

noodlelover

Enthusiast
Joined
Oct 18, 2021
Posts
462
Reputation
390
Time online
6d 16h 17m
So... apparently before inflation the average stock market returns are 10%. I believe that's with dividend reinvestment.


But according to this analysis (below) the government changed how they calculate inflation, so that they could spend less money on social security and other expenses and print more more money. They actually changed it several times, each time trying to make the official inflation numbers lower.


But looking at the graph here, the actual annual inflation looks to be about 10% average using the original 1980s inflation calculation before politicians had it changed to help hide their money printing and lower social security costs.


This means that the actual stock market has on average (after calculating for inflation) zero percent returns, it's just an inflation hedge like gold. This might also mean the economy is not growing it's just an illusion caused by money printing and faulty government stats.

Average stock market return for the last 20 years is 7.45% before adjusting for inflation, which would be a negative real return after adjusting for inflation. So the actual stock market is a shrinking pool of value, possible, and sub-optimal place to put money even when diversified in an index fund.

This could be because the economy is actually shrinking in reality?
Or possible money is being moved out of the stock market into other inflation hedges such as gold, bitcoin, bonds, or some other weird thing? I'm not sure where it's going.

Anyways, High IQ Cels, am I on to something or is this all a bunch of bullshit?
 
Lihito

Lihito

Zephir
Joined
Mar 10, 2021
Posts
4,973
Reputation
4,476
Time online
23d 16h 35m
Its over for us nutrient wise
 
spark

spark

Zephir
Joined
Sep 26, 2018
Posts
4,198
Reputation
4,525
Time online
88d 10h 29m
noodlelover said:
So... apparently before inflation the average stock market returns are 10%. I believe that's with dividend reinvestment.


But according to this analysis (below) the government changed how they calculate inflation, so that they could spend less money on social security and other expenses and print more more money. They actually changed it several times, each time trying to make the official inflation numbers lower.


But looking at the graph here, the actual annual inflation looks to be about 10% average using the original 1980s inflation calculation before politicians had it changed to help hide their money printing and lower social security costs.


This means that the actual stock market has on average (after calculating for inflation) zero percent returns, it's just an inflation hedge like gold. This might also mean the economy is not growing it's just an illusion caused by money printing and faulty government stats.

Average stock market return for the last 20 years is 7.45% before adjusting for inflation, which would be a negative real return after adjusting for inflation. So the actual stock market is a shrinking pool of value, possible, and sub-optimal place to put money even when diversified in an index fund.

This could be because the economy is actually shrinking in reality?
Or possible money is being moved out of the stock market into other inflation hedges such as gold, bitcoin, bonds, or some other weird thing? I'm not sure where it's going.

Anyways, High IQ Cels, am I on to something or is this all a bunch of bullshit?
the standard of living has indeed been declining since about the 1970s
 
Romeo1111

Romeo1111

Arcanologist
Joined
May 9, 2021
Posts
1,769
Reputation
1,744
Time online
50d 5h 43m
spark said:
the standard of living has indeed been declining since about the 1970s
before you could just invest in everything and still make money
 
BUY$DRUGS

BUY$DRUGS

‎ ‏‏‎ ‎
Joined
Feb 5, 2021
Posts
1,068
Reputation
1,360
Time online
8d 16h 3m
The FED and America has been printing like crazy for decades and recently due to covid its spiked to levels we have never seen before. fucking Biden out here wanting to give trillions more and fuck America more. it's over. The economy in North America is bound to collapse its running off of cope at this point nothing real buddy. These crypto booms and stock market pumps all of it is printed cash. I'm sure we will recover but seriously people think we striving when we are not.
 
C

Chinacurry

Zephir
Joined
Feb 29, 2020
Posts
3,663
Reputation
3,493
Time online
62d 2h 4m
You are largely correct, stock market grows at 10% and yeah real inflation in Anglo economies is around 8-10% average over that period.

However if u want to see the true picture, which is slightly more complex, u need to look at stock market valuations, something like cape or shiller ratio I think it's called, to see if it's trading at a crazy premium (like it is now).

In THEORY, if u assume usd can't deflate or inflate in terms of FX, then the true rate of inflation should reflect the earnings if the stock market (sugar costs 2% more than last year, coke sell a bottle of cola for 2% more than last year), and then the price earnings should remain stable, which means inflation drives all price increases.

In practice the aggregate demand story gets weird (some people may say fuck it I won't have a coke if it's 2c more I will have water), and even more weird because 'stock market inefficiencies' which is basically crap company management, mean a handful of companies determine the index, sort of how FAANG and Tesla have done something different to 90% of company stocks for last 2 years, and that ends up being what the market does
 
Witheredly90

Witheredly90

Zephir
Joined
Dec 4, 2020
Posts
2,819
Reputation
3,015
Time online
25d 15h 22m
noodlelover said:
So... apparently before inflation the average stock market returns are 10%. I believe that's with dividend reinvestment.


But according to this analysis (below) the government changed how they calculate inflation, so that they could spend less money on social security and other expenses and print more more money. They actually changed it several times, each time trying to make the official inflation numbers lower.


But looking at the graph here, the actual annual inflation looks to be about 10% average using the original 1980s inflation calculation before politicians had it changed to help hide their money printing and lower social security costs.


This means that the actual stock market has on average (after calculating for inflation) zero percent returns, it's just an inflation hedge like gold. This might also mean the economy is not growing it's just an illusion caused by money printing and faulty government stats.

Average stock market return for the last 20 years is 7.45% before adjusting for inflation, which would be a negative real return after adjusting for inflation. So the actual stock market is a shrinking pool of value, possible, and sub-optimal place to put money even when diversified in an index fund.

This could be because the economy is actually shrinking in reality?
Or possible money is being moved out of the stock market into other inflation hedges such as gold, bitcoin, bonds, or some other weird thing? I'm not sure where it's going.

Anyways, High IQ Cels, am I on to something or is this all a bunch of bullshit?
Having it in stocks is better then nothing. What people did with stocks they used to do with their bank. in the past interest payments were high enough that you could beat inflation. Nowadays if you have money in the bank (unless if its only there for a year) you are literally burning 5-10% of your moneys value.
 
metagross

metagross

Wizard
Joined
Jan 6, 2021
Posts
1,239
Reputation
2,102
Time online
17d 13h 0m
For the last couple of years or so, economic populism has become increasingly popular among people. This rise has gone hand in hand with the proliferation of a narrative which says that the economic gains in this country have gone exclusively to elites since the 1970s while the incomes of regular people have stagnated as the cost of living necessities has increased making the current generation poorer than past ones. This narrative is largely not true though.

Less people are now in poverty. Research has found that nearly all households in the bottom 20% of income in 1975 were no longer in the bottom 20% by 1991. (See Horwitz (2015))

We should also note that poor people’s lives have been materially improved with time. For instance,, unlike in 1984, by 2005 most poor households had a clothes dryer, a microwave, and air conditioning and by 2013 most had a home computer (Horwitz, 2015; Wagner, 2015)

Some people will say: "Well, living essentials have greatly increased in price leaving normal people with nearly impossible bills to pay."
However, this is also incorrect.
Looking at how much people spend on necessities, we can see a decline:


There are more reasons for why the economy actually works and improves, but I'll leave it at that for now.
So why do some social scientists, etc. claim that regular people are screwed, when the economy is working?
Well, Social scientists are mostly left wingers who fail tests of basic statistical literacy, so their involvement in this is entirely unsurprising (e.g.: Hutcherson et al. 2021)
 
Aliens95

Aliens95

Wizard
Joined
Jun 8, 2021
Posts
1,258
Reputation
2,871
Time online
54d 5h 2m
metagross said:
For the last couple of years or so, economic populism has become increasingly popular among people. This rise has gone hand in hand with the proliferation of a narrative which says that the economic gains in this country have gone exclusively to elites since the 1970s while the incomes of regular people have stagnated as the cost of living necessities has increased making the current generation poorer than past ones. This narrative is largely not true though.

Less people are now in poverty. Research has found that nearly all households in the bottom 20% of income in 1975 were no longer in the bottom 20% by 1991. (See Horwitz (2015))

We should also note that poor people’s lives have been materially improved with time. For instance,, unlike in 1984, by 2005 most poor households had a clothes dryer, a microwave, and air conditioning and by 2013 most had a home computer (Horwitz, 2015; Wagner, 2015)

Some people will say: "Well, living essentials have greatly increased in price leaving normal people with nearly impossible bills to pay."
However, this is also incorrect.
Looking at how much people spend on necessities, we can see a decline:
View attachment 1414063

There are more reasons for why the economy actually works and improves, but I'll leave it at that for now.
So why do some social scientists, etc. claim that regular people are screwed, when the economy is working?
Well, Social scientists are mostly left wingers who fail tests of basic statistical literacy, so their involvement in this is entirely unsurprising (e.g.: Hutcherson et al. 2021)
Ya exactly. Everyone wants to make up some conspiracy about the elites and romanticize the past. Not saying there isn't a little bit of conspiracy and some areas where the past is better.


Big one that kills people in the modern day is housing. I have a family member that Is a housing developer in one of the better states actually. He still has all these crazy stories about how difficult it is to build housing even though he has the money on hand and wants to invest it. Especially the fact that they force low income housing to live up to certain standards is the big one, in 1970s you could basically build a hut, so when boomers talk about how they bought their first house at 22 it was probably a shithole. But today it is literally illegal to build these same types of houses.

Government and NIMBYs basically make building housing as difficult as possible.
 
spark

spark

Zephir
Joined
Sep 26, 2018
Posts
4,198
Reputation
4,525
Time online
88d 10h 29m
metagross said:
For the last couple of years or so, economic populism has become increasingly popular among people. This rise has gone hand in hand with the proliferation of a narrative which says that the economic gains in this country have gone exclusively to elites since the 1970s while the incomes of regular people have stagnated as the cost of living necessities has increased making the current generation poorer than past ones. This narrative is largely not true though.

Less people are now in poverty. Research has found that nearly all households in the bottom 20% of income in 1975 were no longer in the bottom 20% by 1991. (See Horwitz (2015))

We should also note that poor people’s lives have been materially improved with time. For instance,, unlike in 1984, by 2005 most poor households had a clothes dryer, a microwave, and air conditioning and by 2013 most had a home computer (Horwitz, 2015; Wagner, 2015)

Some people will say: "Well, living essentials have greatly increased in price leaving normal people with nearly impossible bills to pay."
However, this is also incorrect.
Looking at how much people spend on necessities, we can see a decline:
View attachment 1414063

There are more reasons for why the economy actually works and improves, but I'll leave it at that for now.
So why do some social scientists, etc. claim that regular people are screwed, when the economy is working?
Well, Social scientists are mostly left wingers who fail tests of basic statistical literacy, so their involvement in this is entirely unsurprising (e.g.: Hutcherson et al. 2021)
That is because these are fake stats. Poverty is constantly getting redefined, just like the inflation is underreported. Unemployment rate numbers have been redefined several times now. These pseudo scientists will tell you how everything is OK and everyone is much better off than 50 years ago (because iphones I guess LOL) when in reality:


A couple buy a home in midtown Toronto for just over $30K, adjusted for inflation this comes to $130K in today’s dollars. The house is two stories, detached, in a fairly large lot in the Davisville and Yonge area, and considered suburban at the time. (The area of Forest Hill was developed in the 60s and 70s, and was well outside the city’s limits at the time). The house was sold a few years ago for $1.6 million, more than 50 times the purchase price.

-note they said few years ago in 2019 so it's likely been like 5 years ago when the average detached house in Toronto was just 1.2 million. Thats 33% cheaper than now. So yeah had they sold the house this year they'd get over 2.1 million for it.

Imagine thinking boomers had it much harder than the degenerates of today. Yeah food is cheaper, but only the shit GMO fake food. Do this, buy some eggs in store and make scrambled eggs. You will get some whitish greyish mush. Then buy actual farmer's eggs and you will get a shining yellow scrambled egg. If you actually buy the type of food boomers ate it won't be so cheap anymore.
 
spark

spark

Zephir
Joined
Sep 26, 2018
Posts
4,198
Reputation
4,525
Time online
88d 10h 29m
Aliens95 said:
Ya exactly. Everyone wants to make up some conspiracy about the elites and romanticize the past. Not saying there isn't a little bit of conspiracy and some areas where the past is better.


Big one that kills people in the modern day is housing. I have a family member that Is a housing developer in one of the better states actually. He still has all these crazy stories about how difficult it is to build housing even though he has the money on hand and wants to invest it. Especially the fact that they force low income housing to live up to certain standards is the big one, in 1970s you could basically build a hut, so when boomers talk about how they bought their first house at 22 it was probably a shithole. But today it is literally illegal to build these same types of houses.

Government and NIMBYs basically make building housing as difficult as possible.
the housing crisis is world wide bro

The "commie-blocks" as people call them are now being sold at up to half a million dollars in Eastern Europe where people average 15k per year.
 
CookiesAndCream

CookiesAndCream

Overlord
Joined
May 15, 2020
Posts
1,930
Reputation
3,554
Time online
206d 19h 26m
spark said:
the standard of living has indeed been declining since about the 1970s
Right after the US left the gold standard? :feelswat:

Golds ten year return was -0.21% btw. And that's not inflation adjusted. Actually lower. Brutal
 
spark

spark

Zephir
Joined
Sep 26, 2018
Posts
4,198
Reputation
4,525
Time online
88d 10h 29m
CookiesAndCream said:
Right after the US left the gold standard? :feelswat:

Golds ten year return was -0.21% btw. And that's not inflation adjusted. Actually lower. Brutal
Yeah gold had a crazy peak in 2011.


I do think it will go up a lot once the recession starts though. I will buy some gold in the few weeks after the markets crash.
 
MoeZart

MoeZart

-
Joined
May 18, 2020
Posts
6,368
Reputation
11,173
Time online
145d 7h 9m
noodlelover said:
So... apparently before inflation the average stock market returns are 10%. I believe that's with dividend reinvestment.


But according to this analysis (below) the government changed how they calculate inflation, so that they could spend less money on social security and other expenses and print more more money. They actually changed it several times, each time trying to make the official inflation numbers lower.


But looking at the graph here, the actual annual inflation looks to be about 10% average using the original 1980s inflation calculation before politicians had it changed to help hide their money printing and lower social security costs.


This means that the actual stock market has on average (after calculating for inflation) zero percent returns, it's just an inflation hedge like gold. This might also mean the economy is not growing it's just an illusion caused by money printing and faulty government stats.

Average stock market return for the last 20 years is 7.45% before adjusting for inflation, which would be a negative real return after adjusting for inflation. So the actual stock market is a shrinking pool of value, possible, and sub-optimal place to put money even when diversified in an index fund.

This could be because the economy is actually shrinking in reality?
Or possible money is being moved out of the stock market into other inflation hedges such as gold, bitcoin, bonds, or some other weird thing? I'm not sure where it's going.

Anyways, High IQ Cels, am I on to something or is this all a bunch of bullshit?
ever since the government got rid of the gold standard and can print money at will without anything limiting its quantity, they became retarded.

in Germany they told us that the average inflation has been 1.7-2% per year over the last decade, when in reality house prices have tippled in that time, yeah food and shit didn't rise as much, but all investment assets, houses, stocks blew way out of proportion. It's all a big scam, and no one knows what to do about it without crashing our financial system
 
CookiesAndCream

CookiesAndCream

Overlord
Joined
May 15, 2020
Posts
1,930
Reputation
3,554
Time online
206d 19h 26m
spark said:
Yeah gold had a crazy peak in 2011.
View attachment 1414106

I do think it will go up a lot once the recession starts though. I will buy some gold in the few weeks after the markets crash.
if the market crashes, gold will go down with it. maybe in the beginning it´ll go up slightly, but big holders will liquidate their positions to buy other things.
 
spark

spark

Zephir
Joined
Sep 26, 2018
Posts
4,198
Reputation
4,525
Time online
88d 10h 29m
CookiesAndCream said:
if the market crashes, gold will go down with it. maybe in the beginning it´ll go up slightly, but big holders will liquidate their positions to buy other things.
Yeah that is why I will buy it then. It will go down but usually recovers faster than stocks.
 

Users who are viewing this thread

Top