Keynes is famous for writing "in the long-term we are all dead". Focusing on the long term may be important but ultimately is meaningless to the individual. He also wrote that for businesses planning the short-term is predictable, while the longer-term from year to year becomes random. For governments multiply this by many factors. Anything in a government budget beyond year t+3 is complete fiction. Wall street convictions say the opposite, that stocks are unpredictable in the short-term. In the long-term, however, stocks will enjoy an upward drift. Fischer Black wrote about this issue in his business cycle theory saying that firms attempt in the short-term to produce for future long-term demand. When they plan and execute well there is economic growth. When they plan and execute poorly there are recessions. The 2008 mismatch being a tremendous oversupply of housing and credit, for example.

In life and business, it is sounds more wise and mature to have long-term thinking, childish to think only of tomorrow. The Sage holds investments forever, yet the insurance premiums collected I am sure are tallied ever day. A Zen philosophers would say we should live in the moment, the extremely short-term. I agree with Fischer Black's thinking. It is good to embrace that the future is highly unpredictable and every decision we make involves time and uncertainty. I still work hard in the short-term towards long-term goals, but expect some variation along the way. The Yangtze has many twists and turns before reaching the sea; Fortes fortuna adiuuat.


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