dtcwee: The Value of Nothing

AI bonds are a small part of the debt market. Could they really crowd others out?

Adjusting asset returns for risk. Common wisdom in Australia is that an investment property beats shares because:

Boomer picking is the new stock picking. Australia has two demographic trends: declining access to housing and jobs for the young, and rocketing aged care costs for the aging. For the elderly who prefer to age at home, care and maintenance costs continue to climb despite subsidies. Many are forced to sell the house and move to an aged care facility, which is only marginally cheaper.  For their young, wages are stagnating, work is hard to enter and when obtained, precarious. Furthermore, housing costs are many multiples of average income. Could a solution be for younger folk to forego traditional employment and become live-in carers for their elderly, on condition that all their living expenses are paid and they inherit a modest multi-million dollar, property? Let's model it! Variable Sydney/Melbourne metro benchmark Property Value (V) $2,000,000 Remaining Life Expectancy (T) 5 years Average Young Adult Salary (S_gross) $85,000/year ($66,000 net after tax & HE...

War is widely seen as indefensibly evil. Edwin Starr's question, " What is it good for ?" is clearly rhetorical. However, some like yours truly have a macabre fascination with the notion that it can enrich. The link between war and wealth was probably around before Nathan Rothschild reputedly used advance knowledge of Wellington's victory to enhance his fortune. God ordered the Israelites to plunder their enemies with fluctuating specificity . A family story has my great-grandfather reaping huge profits from selling surplus American military landing craft (that he just happened to have lying around the yard.) America's last wars in Afghanistan and Iraq are cast as cynical ploys to create customers out of victims. Keep Calm and Invest. Data tells its own story. In particular, we can cross reference periods where the U.S. was at war, against the S&P500 and its precursor index from 1940 to 2014. I would think that the massive government spending in mo...

I've been wrong. Many times. Often for the 'right' reasons. 

Is ending a financially draining relationship worth the hit to assets? Some tools to price staying vs going. via GIPHY

Why you should want to work. The fable of the 'The Ant and the Grasshopper' is often used to prime the work-shy for shame and deprivation.

It's not the size, it's the growth. As the world ages, it's worth wondering if retiree benefits will increasingly drive inflation through supporting elderly buying power and enabling them to exit the labour supply. Let's plot pension replacement rates , a measure of pension generosity, against 2023 inflation for the G20, the world's largest economies. In short, countries' circumstances and systems are too diverse for a strong relationship between pension generosity and inflation, but let's break it down further.

Will having children make marriages last? Children, it is supposed, so enrich a marriage that it is more likely to endure over time. They bring a unique stimulus, necessitate close teamwork, and foster intimate communication. While some would argue that they could seek such stimuli elsewhere, and others would say that they can do without that sort of personal development, the naysayers are not strong enough to displace a nuclear family ideal that has persisted despite change in the 20th and 21st centuries.

 A user asked r/geography, " Why is the modern Mediterranean so poor compared to the historical one? " The simple answer (not mine, unfortunately): "The world got bigger."

Can testaments be created that outlast heirs? The Native American practice of looking forward seven generations sounds noble but is essentially vague. Still, it seeds the idea for an investment math exercise that could provide not just for seven generations, but the generations beyond. (Fund Manager Conference Call)

Same again tomorrow. One thing I like to tell myself during bear markets: On any given trading day, three quarters of a percent of the U.S. market turns over .

What if it's actually the houses? I spent the last six months in Australia without a car, looking to do some travel, home repairs, and a little blogging about life without a car. That's all come to an end.

Borrowing to invest in an asset will not simply multiply your returns. It is more accurate to say that leverage amplifies the difference between the returns on the asset and the cost of borrowing. This post was originally published on 18-Dec-2016. I have since made an interactive leveraged returns calculator . Short Form Calculation Return on Equity = Interest Rate Differential x Debt to Equity Multiple + Asset's Return For example: 8:1 Debt to Equity at 4% debt interest with an asset return of 5%: 1 x 8/1 + 5 = 13% Visualisation looks a little something like this: ROE Alpha (Y-axis) by Return-Borrowing Differential (Z-axis) by Borrowing (X-axis)

Household formation was dullishly ordinary before it became the Australian 'dream'.

TLDR: Copying is the fast track to immortality. Why go to college? Why get a good job? Why have kids, then send those kids to college? 🥅 Your default reason for those time-consuming and costly endeavours may be, 'because I want to'. But does that express true desire, or is it rationalisation after-the-fact? Was a concerted effort made to explore alternatives? After all, the virtue of conventional goals are taken as givens, such that non-pursuit - rather than pursuit - must be defended. Parents need not justify their choice to procreate, while the childless are expected to explain not having children. Arthur Schopenhauer enters the chat:

Australian houses have gotten larger while Australian families have gotten smaller.

Q: How can you tell if someone has an investment property? A: Don't worry, they'll tell you.

You miss 100% of the stupid decisions you don't make. Negative self-talk goes like this: I missed out on that opportunity because I'm too pushy/meek/vain/stupid/whatever. Astronaut, doctor, parent. There's no end to what could have been, but for some personal flaw.  The infinite number of missed opportunities far outweighs the finite number of wins attributable to your better characteristics.

You are probably selling your time for less than it is worth. The personal value of your time gets scarcer as you age and therefore more valuable. However employers and everyone else values what you output with your time, so unless you (spend time to) increase your effectiveness, the value of your time to them stays the same. Let's dive into this.