No, I was presenting where my ideas came from. I never said that what Taleb says is fact, nor that you should acknowledge it as such.
That said, are you familiar with Taleb’s notions on the market?
I believe that the capacity of the layman to speculate in markets is a form of gambling. I believe that only the institutional players, with implicit government guarantees have the knowledge, leverage and recklessness to play the game aggressively enough to win.
Economic analysis is not the same as market action. Very few people are skilled enough to make the sort of analysis Peter Schiff, Jim Rogers or Mark Thornton did.
Those reductios would be accurate, if I had said that the exploratory process of entrepreneurship was absolute, in that no one ever participated in loss making activity. That was -=not=- what I wrote.
Obviously, some businesses and business ideas are better and worse than others. But that doesn’t mean that basic business planning and profit loss don’t increase the chances of success, or keep people out of bad projects.
But in the stock market, the layman watches TV, looks at aggregates, compares charts and reads BLS #s and thinks he is going to have the same insight as the great Austrian scholars or institutional experts? Of course not.
That doesn’t mean you can causally start with a flawed premise or based on hearsay and claim to have expert knowledge to base your decisions on.
Indeed. And your and my capacity to understand those other variables, to be able to meaningfully interpret the massive amounts of entropy, means that we’re basically just guessing.
Well not all trading requires indepth knowledge about things. Fundamental analysis could be used to gain from investment as well. For example if know that certain crops are destroyed by some natural causes u can expect that remaining producers of same crop to make a greater profit therefore boost their earnings and thus rising stock prices. thats just one example.
furthermore investors who are just gambling without analysis and any reason would in the long run loose money and be forced out of market anyways.
Check out Taleb. You’ll get a new appreciation for not only how smart Rogers and Schiff are, but how lucky.
Oh, I meant to add earlier, when Mark Thornton called the Housing bubble, evem many of the Austrians did not see it. In retrospect, everyone piles on and can see the bubble based on Austrian theory, but while it was going on, even smart guys like Bob Murphy weren’t so sure it was as Thornton was seeing it.
From my understanding FIAT wants the Jeep brand. Jeep is known all over the world and from what I’ve heard is one of FIATs reasons of wanting Chrysler.
It is. You can never tell if the price on gold is more or less than the actual value. Banks and others keep gold to rise the price, then sell it and deflate it when the time is right. Everyone without insider info or a vast amount of it may be hurt if they decide to sell sell sell when you just bought bought bought.
I stay away from playing investment games like that.
My theory is that gold will only go hyper-nova against the dollar if there is any chance it will be money again. Gold is understood by most of the big time players like Schiff and Rogers to be a hedge, not an investment. I’m worried that libertarianism has picked up a lot of people who think that AE is a way to get rich quick by profiting off the consequence of government interventions.
This is just a question, but do you think under a real libertarian economy being a loaded billionaire like ones we have would be possible? Under a free market would monopolies as we know them be stronger or weaker?
obviously not. but still, the workers are getting the means of production- a dream of carson. hes obviously very much supportive of unions and such a development, even if statist, is probably welcomed by him
This argument has gotten off-track. My original point was that speculation cannot be avoided. There are no “non-speculative” businesses or trades. All entrepreneurs have to engage in speculation.
You seem to agree that no matter what a person does, they are ultimately speculating - or as you call it - guessing.
Your strong dislike for outright speculation is duly noted, but, again, it is a value judgement and it is not founded on any real economic arguments. As I originally said, more speculation in a market leads to a better approximation of equilibrium price.
In my opinion, speculation should be praised, not belittled.
Not all speculation is the same quality or has the same utility.. Because the speculator has to invest capital to play the game, losses are wealth destruction. Riskier behaviour leads to greater wealth destruction.
Anyway, gambling and Russian Roulette are speculation too. So is buying lottery tickets.
No, there is an enormous difference between stock market speculation and entrepreneurship. Everyone looks at the market as a money spigot, everyone wants to get rich quick. Entrepreneurs take the time to investigate, build and operate a successful business, which in the sense that nothing is a sure thing, is wildly different than day trading, and I shouldn’t have to make that comparison.
I have acquaintances who make 5 figures a day selling people on forex systems, get rich internet money schemes, investment strategy guides and government grant information. Now there is some brilliant entrepreneurship, selling people on speculation and get rich quick. And it’s almost a no-lose bet that there is an enormous market for people who think you can make money without putting in work.
I’d do it, but it conflicts with my morals.
Check out Nassim Taleb. He’s a very good investor.
I agree with you liberty student, but I think what you are complaining about is not speculation in general, rather that todays capital markets are screwed up and mostly total fraud. Thats what keeps me staying away from going into stock markets, even if I have ideas what i would do . I even bought some investment books, which can be good if you can protect yourself from the bullshit by reading on austrian economics and Taleb.
Speaking of Taleb I have just a little nitpick: Investing and Speculation are nothing like gambling or Russian Roulette. In this cases you know the exact risk beforehand “(My chance to win is 49% If I bet on red”). The real world is nothing like this, the future is always uncertain. For example, you can buy gold in expectation that the government will (and can) inflate the money supply no matter what. For some reason the political situation changes and the government ramps up interest rates and dramaticaly decreases the money supply. Suddenly you have lost a big amount of your wealth. Sure, this risk might be low, but would have been there any way to quantify that risk?
This morning La Repubblica an Italian newspaper of usually leftist tendencies but employing the services of a number of good freelances run a very interesting article about FIAT and Chrysler, particulary on the financial part.
In short it’s one colossal scam. 58% of the shares will be handed over to the workers’ health fund, 20% to FIAT. The rest… is a mystery but my bet is that they’ll be either given to creditors to cover their losses (more on that later) or to banks as to warrant further funds apart from those already pledged by the US federal government. Neither the health fund nor FIAT will fork out a single dollar for these shares: they’ll be “given away for free” as part of the plan to avoid Chapter 7 bankrupcy. In the end the worst off will be the creditors: the federal government has already made clear that each will be given 28% of the amount due, take it or leave it. Where the money will come from it’s not known.
The most curious part is how this will affect Chrysler operations. The US government had its mouth full talking about eco-friendly vehicles but in fact Chrysler will focus on SUVs, trucks and other “gasguzzlers” simply because they are much more profitable and because neither Chrysler nor FIAT have the technology to offer a serious alternative to Japanese hybrids. Small FIAT cars, which according to our Pravadas and Izveztias should be the core of the deal, won’t reach US shores before 2011 (they cannot be sold in the US “as is”), and even then there’s always the issue of profitability and appeal. A basic FIAT 500, which doesn’t carry much in the way of luxury and has a very small engine by US standards, would cost in the region of 17.000 US $ and would give Chrysler/FIAT a profit of only 600 US $. Any SUV costing 30.000 US $ would give them a neat 5.000 US $ profit. Chrysler will also have to honor standing warranty contracts (the US government has been very clear on this point), provide spare parts for recent models and prop up a hailing dealership network.
FIAT is using this zero cost operation (I repeat again: they have no money and they are full of debts) to rack up money on the stock market. Now they are trying a similar operation with GM European operations and the complicity of the German government. But that’s another story for another day.
Would anything, as we know it, exist as it does today, under a free market? Of course not. The conditions would be a lot different. That’s like asking if a certain species would have evolved the same way if you took away specific environmental conditions that gave it the ability to evolve the way that it did.