In the 1700s, when the British started selling Opium to China, it proved to be extremely lucrative. British ships were able to procure opium at extremely cheap prices, and sell them to China at vastly inflated markups. The primary market for this opium was Chinese laborers, who used it to get high and forget the … Continue reading Prosperity comes from Investments, not Consumption
Prosperity Comes From Eliminating Jobs, Not Saving Them
Virtually every election season, we’re treated to a chorus on job creation. Who has saved more jobs. How will they protect your job. And who is going to be the grinch that takes your job away. But perhaps our focus is misguided. Perhaps we should be focused not on creating jobs, but on eliminating them. … Continue reading Prosperity Comes From Eliminating Jobs, Not Saving Them
Correlation between Stock-Market-Returns, GDP Growth and PE Ratios
In an earlier article, we discussed the primary factors that drive long-term stock market returns. Namely: Earnings yield Real GDP growth Inflation We also discussed ignoring fluctuations in the PE Ratio, because: PE ratios tend to be cyclic, and do not increase or decrease in perpetuity Over the long term, fluctuations in the PE ratio … Continue reading Correlation between Stock-Market-Returns, GDP Growth and PE Ratios
What drives Stock Market Returns?
“The stock market is nothing more than a ponzi scheme”“It’s all just fake money”“Stocks prices are completely arbitrary. It can rise or crash any day” Chances are, you’ve heard some variation of the above, many times in your life. It’s hardly surprising - stocks play a crucial role in our economy and personal savings. And … Continue reading What drives Stock Market Returns?