Feb

9

The hairs on the back of my neck stand up every time I hear 'positive drift' because the stuff they're being measured against (currency) is also in a state of constant flux.

It's amazing what a shilling (now 5 new pence) was worth a couple of hundred years ago; factor in various technological revolutions and huge population growth over the time this 'drift' has been measured and I'm not sure you can reasonably extrapolate it forward.


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  1. Anatoly Veltman on February 9, 2011 6:09 am

    1. Your “currency” point is understood and well-taken.
    2. Drift is an interesting concept notwithstanding.
    3. Most of us are interested in much smaller than century trading time horizon. My preference, therefore, is to try and concentrate on current state of capitalism and of “stock market concept” (as a greater fool game).

    As such, the current dilemma: what is the probability of this Black Swan - that the U.S. or European or China/India population (whichever may occur first - although globalization will make for instant contagion) is pushed to the brink of such profound distrust to the financial market system, that most 20:1 P/E stocks of today will become penny stocks?

    Mind you, the survivorship bias of INDEXES would still favor indexes over individual stock position - in this apocalyptic scenario. Of course, individual stocks would outperform - in the opposite scenario

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