Tuesday, February 10, 2015

So what if you're wrong?

JQ wonders via email if I'm talking my book:
What if you're wrong? You say certain trends can't continue much longer but what if they do?  What if the dollar keeps getting stronger and oil keeps getting cheaper and more plentiful? What if interest rates really can be held at zero? How long until you go broke betting wrong?
It goes on, but you get the idea. While I'm tempted to show my math and reiterate why such things can't go on forever, it's actually a good question, for two reasons.

Firstly, there are lot of people on the internet who just talk their book.  Hard to believe, right? They sell stock, so they assert stocks will always go up.* Others bought tons and tons of gold and desperately promote any sign of hyperinflation.  Their talk often seems an attempt to convince others (and themselves) that they made wise investment choices even as the market goes against them. Others have made a very public bet and their reputation (and income) demands they stick with it. I might be one of them, or all three.

Secondly, I've been wrong about so many things and over so long a period** that the idea that I'm wrong about present trends is not outside the realm of possibility.  Maybe not even outside the realm of probability.

So here's my answer: if I'm wrong about all this stuff, and if everything is awesome, I'll
  • Continue to live a life of luxury enjoyed by fewer than 1% of people who have ever lived.
  • Drive my car anywhere I want to go and not give the cost a second thought.
  • Buy foreign wines for pennies a bottle.  I'm rather fond of Chilean cabernets, but I like Bordeaux as well.
  • Work a job I love for 20 more years and retire on a fully-funded pension that will last me 30 or 40 years, until I die of old age.
  • Make my kids rich the next day.
  • Continue to do what I like to do. I'll make jellies and fruit wines and grow a garden and pour bullets.  I'll continue working on this idea of toy molded zinc soldiers I've been kicking around. I'll refurbish handloading dies and I'll plant some nut trees***.
In short, if nothing bad ever happens again, I'll continue to live a blissfully happy life. While I think many things are going wrong and are about to go more wronger****, I have not bet the farm on that happening. Instead I have paid off the farm and am perfectly content to live on it the rest of my days. I have no need to bet at all.

Lots of people make the assumption that the doomsayer wants all the bad things he warns about to happen.  Maybe some do, I don't know.  But in most cases that's as silly an accusation as saying the proof your daughter wants you to get lung cancer is that she warns you about your smoking.  She warns you about smoking because she wants you to live, not because she looks forward to the day that, while you gasp for breath between dirty sheets in some forlorn VA hospital, she can say "I told you so."

* They may or may not own stocks, but they profit from the fact of stocks going up anyway.
** After all, I've been married 30 years. And to the same woman at that.
*** six of them should arrive this week.
**** it was a word on Veggie Tales, anyway.

4 comments:

  1. Reasonable question, right reasonable answer. By the way, I hope to never see what I prognosticate. Then again, I hope I don't have to pee again. Sure, voiding has it's purposes and all, but it distracts. :p Still, as with you, I will continue to enjoy. Actually, part of the reason to rig the game in my favor is, even if nothing happens... guess what? The game is still rigged in my favor, just not as steeply.

    I try to help people understand that living a bit into tomorrow doesn't necessarily have to be about the world as we know it ending. It can just be about being ahead, for any or no reasons. It does pay. What I have stocked I can live off if my health keeps me from the store. Or, if I simply don't want to go to the store. And I don't have to worry about the store being out, me being broke, or being out of gas, or... anything. It's nice, actually. The store is now just for extras.

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  2. I'm trying to recollect a time in history where nothing beyond a harmonious status quo took place for any meaningful amount of time.
    Can't think of one.
    Even our times of peace and prosperity are fraught with danger, disaster, disease and dispossession; nothing lasts forever, good or bad, but just saying you can tread water forever doesn't make it so.*
    If the world doesn't end today, well, there's always tomorrow, and tomorrow and tomorrow.
    I read that in a play somewhere.
    Anyway, if I know how the grand tapestry of narrative history works, in about five years we'll find out we were living in the End Times** all along.

    *It'll only seem like forever.
    **Adjusted for inflation, of course.

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  3. just saying you can tread water forever doesn't make it so...

    And that's kind of the thing. People not only want a prediction, they want a date. "The Dow will hit 3000 in 2017" or some such. Harry Dent, I believe, once advised to give a target or a date but never both together. And that's good advice - he's made a decent living being fabulously wrong about Dow numbers since 1982 or so.

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  4. rather fond of Chilean cabernets

    Cooler climate. More dry and acidic. Bingo.

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