A note to those who make historical economic comparisons

@Smacktard:

You know, you’re really not worth the trouble. The thought of you teaching is a little unnerving, but who am I to try to straighten you out. If you want to go through life clueless, go right ahead.

Wow, what is this all about?

Enjoyed most of the thread, learned a bit about the market I think. Just didn’t understand the last point?

@JWW:

@Smacktard:

You know, you’re really not worth the trouble. The thought of you teaching is a little unnerving, but who am I to try to straighten you out. If you want to go through life clueless, go right ahead.

Wow, what is this all about?

Enjoyed most of the thread, learned a bit about the market I think. Just didn’t understand the last point?

Then you haven’t conversed with Jen enough.  no offense, Jen

@Jermofoot:

@JWW:

@Smacktard:

You know, you’re really not worth the trouble. The thought of you teaching is a little unnerving, but who am I to try to straighten you out. If you want to go through life clueless, go right ahead.

Wow, what is this all about?

Enjoyed most of the thread, learned a bit about the market I think. Just didn’t understand the last point?

Then you haven’t conversed with Jen enough.  no offense, Jen

OH. Didn’t notice anything nasty in this thread must have been carry over from another thread?

@JWW:

@Jermofoot:

@JWW:

@Smacktard:

You know, you’re really not worth the trouble. The thought of you teaching is a little unnerving, but who am I to try to straighten you out. If you want to go through life clueless, go right ahead.

Wow, what is this all about?

Enjoyed most of the thread, learned a bit about the market I think. Just didn’t understand the last point?

Then you haven’t conversed with Jen enough.  no offense, Jen

OH. Didn’t notice anything nasty in this thread must have been carry over from another thread?

I don’t know about nasty, but Jenn is quite the conversationalist and debater.  It gets…interesting sometimes when you argue.  She’s like a 9/11 truther for all of reality.  :lol:

Which is to say she’s a lot of fun to talk with but you never know what crazy thing she’s going to say.  :mrgreen:

Yea, crazy things like actually MAKING money in the market regardless of how poorly some people are doing at it.  Just because the DJIA goes up 20,000 points in a day or drops 20,000 points in a day does not mean you made or lost any money.

As for what I track, I let MorningStar do a lot of my tracking for me.  They seem to have a slightly better tracking system then the posters on this board.  Dunno…maybe it’s the thousands of years of experience their staffers have combined vs the decade or so we have?  Anyway, MorningStar’s getting me almost 23% per annum while some of you are complaining you have been losing money since the Y2K scam was revealed back in January of 2000.

Anyway, back on topic, inflation is lost money.  While you still have the same physical bank notes, are you really going to try and tell me you have the same amount of money if you had $5 USD in 1908 as you would if you had $5 USD in 2008?  Hell frakking no.  Sure, it’s still $5 USD, but $5 USD in 1908 was MUCH more valuable then, than it is today!  $5 USD today won’t even get you a value meal at McDonalds, back in 1908 you could probably get enough groceries to live for a month on $5 USD.

Hmm, Morningstar’s top 10-yr fund (ING Russia A) has grown 30%. About 3% per year.
http://screen.morningstar.com/FundSearch/FundRank.html?fundCategory=all&screen=tr10yr

Their top 5 yr fund (BlackRock Latin America A) has gotten 45% (About 9% per year).
http://screen.morningstar.com/FundSearch/FundRank.html

Their top 3 yr fund (ING Russia A) has gotten 46% (15% per year).
http://screen.morningstar.com/FundSearch/FundRank.html

Your claim that MorningStar is getting you 23% a year is either bullshit or wishful thinking. If you’re getting 23% a year, quit teaching, and apply to Goldman Sachs because you’re outperforming everbody except the top hedge-fund managers. To highlight the ridiculousness of what you’re saying, we have:

Barron’s #7 ranked Hedge-fund IN THE WORLD (Atticus Management, 2007 Return: 27.86%)
Barrons’ #11 ranked Hedge-Fund in the world (Blackhorse Emerging Enterprises Fund, 2007 Return: 26.16%)

Jen: 23%

Your theory that Lee deliberately wrecked his army was at least INTELLECTUALLY dishonest. This is just dishonest. Did you really think anyone would believe you?

@Cmdr:

Yea, crazy things like actually MAKING money in the market regardless of how poorly some people are doing at it.  Just because the DJIA goes up 20,000 points in a day or drops 20,000 points in a day does not mean you made or lost any money.

As for what I track, I let MorningStar do a lot of my tracking for me.  They seem to have a slightly better tracking system then the posters on this board.  Dunno…maybe it’s the thousands of years of experience their staffers have combined vs the decade or so we have?  Anyway, MorningStar’s getting me almost 23% per annum while some of you are complaining you have been losing money since the Y2K scam was revealed back in January of 2000.

Anyway, back on topic, inflation is lost money.  While you still have the same physical bank notes, are you really going to try and tell me you have the same amount of money if you had $5 USD in 1908 as you would if you had $5 USD in 2008?  Hell frakking no.  Sure, it’s still $5 USD, but $5 USD in 1908 was MUCH more valuable then, than it is today!  $5 USD today won’t even get you a value meal at McDonalds, back in 1908 you could probably get enough groceries to live for a month on $5 USD.

Did I mention she’s also relentless?  :-D

To the original post…

EM actually has it BACKWARD in his original post IF you were to apply CPI adjustments to the DJIA.

Since we are not, and have not been, in a period of DEflation, then a market value of 10000 points in 2000 would actually be more purchasing power than a market of 10000 is today, since over the past 8 years we have average about 3% per year annual inflation (or about 27% total inflation over 8 years figuring the cumulative effects).

Remember Stocks are an asset for most folks, and at the same face value inflation reduces the value of assets.

So…
If we were to adjust the DJIA for inflation, then we would need a 27% INCREASE in the DJIA since 2000 for the purchasing power of the assets represented by the DJIA shares just in order to stay even.  Since we actually have about a 4% total face value decline over those same 8ish years, the true purchasing power of those shares if converted to cash has actually decreased by about a third…

Sorry EM, I was avoiding this thread as long as possible, but did have to do the correction when I saw it.

Oh, one final comment on the DJIA…

The past 8ish years:  DJIA is down about 4%
The previous 8ish years, the DJIA TRIPLED in value

I’ll let everyone decide how they want to evaluate that; but I do of course have my own opinions on it (unfortunately they are political and relate to true Fiscal Conservatives controlling Congress and a President more concerned with Fracking his interns instead of Fracking the rest of us)