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If a large amount of white collar workers are jobless, your SPY calls would also become worthless. It's a good idea to invest in index funds, but investing in

If a large amount of white collar workers are jobless, your SPY calls would also become worthless. It's a good idea to invest in index funds, but investing in index funds expecting a economic apocalypse is not good reasoning.

JPLeRouzic 7y ago
Do you have any suggestion as to what would be a good investment? Thanks!
- wrong_variable 7y ago
  I am not an investment expert, you should consult with your financial advisor, my personal rule of thumb is : 1 - Invest in yourself. - Health - Education - Social circle 2 - Invest in your living space. - Buy an apartment anywhere on earth where you can afford, you can take cheap flights to anywhere on earth these days. Even the remotest part of Africa can be reached within 1 day and less than 500 dollars. ( you are normally paying more than 700 dollars in rent anywhere in the developed world ). 3 - Buy high yielding government bonds, preferably multiple countries. 4 - Buy index funds. I do not prefer gold / silver, there is severe restrictions in moving them around, and high taxation in audit and transaction. government bonds are generally tax exempt. You are better off investing in guns than gold if the economy collapses.
jiveturkey 7y ago
I'm sure the idea is to convert to cash before the apocalypse actually occurs. Even if one misses it by a little (ie, there is some downturn), the bulk of GP's earnings have gone to savings.
- orpep90nxkfo 7y ago
  You’re assuming cash will hold value after a so-called economy apocalypse? If the economic credibility of the nation goes, so too does the value of its cash currency. What’s a “more white collar workers than jobs” economy look like? Personally, I’m leaning into useful life skills, like growing food, reconnecting to hunting, low level electronics, rebuilding my car, and home myself with my money now. I’d rather have deep experience in head and hands than a wheelbarrow full of dolla dolla bills y’all with the buying power of East German currency. Not that I have any way to be sure the implosion is coming any time in my remaining years. But still, if we’re talking about how to prepare for such a thing, let’s get real: investments in today’s ephemeral value stores are the worst idea for securing yourself against economic collapse
  - vidarh 7y ago
    Depends what you are preparing for. If you think automation is going to happen but that capitalism will survive, then index funds seems line a good idea. If you think capitalism will be supplanted, it depends on what you think will replace it. If we're looking at a Mad Max style dystopia, then sure, it won't help to have lots of shares. But presumably you'd see signs of that before we get there and be able to start converting your money into harder currency. If we're looking at a benign-ish revolution with redistribution it won't matter much. Personally I think the most realistic medium term risk scenario to protect against is that capitalism will hang in there, but that jobs become more scarce. An outright economic collapse or major social upheaval is likely to take more time. If you start seeing job scarcity hitting, then sure, start converting some of those index funds just in case things accelerate in the wrong direction.
    - orpep90nxkfo 7y ago
      I guess I’m assuming “economic apocalypse” means “fall of the nation state concept as we know it.” since that is the lynch pin for economic trade. Business operations as a whole are so reliant on the legal rails, like it or not, they’d have to fail spectacularly to create “economic apocalypse” to my mind. I forget some people see run of the mill loss of wealth status as akin to loss of life. So perhaps apocalypse to them means going from $100 million in wealth to merely $10 million, but the social foundations that support that wealth largely remain intact
  - golemiprague 7y ago
    I invest in guns so I can come and take the food from people like you, maybe also enslave you so you can keep doing all those useful things.
  - Nasrudith 7y ago
    The thing about apocalyptic preparations are it is all scope dependent. If it is local than portable valueables and GTFO as an emmigrant able to pay their way is better than five lifetimes of canned goods. And even then the collapsed area will either reestablish a regeime of some sort or be colonized by intact neighbors. If it is world wide collapse than productive skills may be the best - since even if you have guns you may be outgunned but if you can supply food any remotely smart bandit or warlord would prefer the reliable food stream of a living serf under their protection than just a storehouse's worth. Of course these are all very long odds and preventing a collapse is likely a far better use of resources.
ZhuanXia 7y ago
My model is that as median labour power decreases capital and superstars should capture a larger percentage of future productivity increases. And automation should provide huge productivity increases. This seems compatible with index funds being a good bet. Perhaps I am wrong, but could you provide details as to why?
- marktangotango 7y ago
  Can you talk about how superstars would capture future productivity increases, in practice?
  - koolba 7y ago
    It’s no different then the proverbially 10x programmer landing a consulting gig for literally 10x the compensation of a nobody.
  - deleted 7y ago
    [deleted]
- nostrademons 7y ago
  The model is incomplete in the details (as most models are). The actual effect is that capital in the companies that are taking advantage of the new globoticized future does great. FANG does great. Upwork does great. AirBnB and Stripe do great, once they go public. Labor and capital of old-line companies do terribly. This type of economic transformation doesn't just result in layoffs, it results in whole companies going out of business. Their value-networks are adopted to the cost structure of the old world; as that cost structure changes, they have no reason to exist as a firm. When you buy an index fund, you're buying both of these types of companies. You should probably do okay, because the public market is actually pricing a lot of this phenomena in already: multiples on old-line companies are severely depressed while FANG shares are soaring, and the capitalization-weighting of the index is taking this into account. But you're leaving money on the table: many of the biggest winners will be new fast-growing startups that aren't public yet.

JPLeRouzic 7y ago

Do you have any suggestion as to what would be a good investment? Thanks!

wrong_variable 7y ago
I am not an investment expert, you should consult with your financial advisor, my personal rule of thumb is : 1 - Invest in yourself. - Health - Education - Social circle 2 - Invest in your living space. - Buy an apartment anywhere on earth where you can afford, you can take cheap flights to anywhere on earth these days. Even the remotest part of Africa can be reached within 1 day and less than 500 dollars. ( you are normally paying more than 700 dollars in rent anywhere in the developed world ). 3 - Buy high yielding government bonds, preferably multiple countries. 4 - Buy index funds. I do not prefer gold / silver, there is severe restrictions in moving them around, and high taxation in audit and transaction. government bonds are generally tax exempt. You are better off investing in guns than gold if the economy collapses.

jiveturkey 7y ago

I'm sure the idea is to convert to cash before the apocalypse actually occurs. Even if one misses it by a little (ie, there is some downturn), the bulk of GP's earnings have gone to savings.

orpep90nxkfo 7y ago
You’re assuming cash will hold value after a so-called economy apocalypse? If the economic credibility of the nation goes, so too does the value of its cash currency. What’s a “more white collar workers than jobs” economy look like? Personally, I’m leaning into useful life skills, like growing food, reconnecting to hunting, low level electronics, rebuilding my car, and home myself with my money now. I’d rather have deep experience in head and hands than a wheelbarrow full of dolla dolla bills y’all with the buying power of East German currency. Not that I have any way to be sure the implosion is coming any time in my remaining years. But still, if we’re talking about how to prepare for such a thing, let’s get real: investments in today’s ephemeral value stores are the worst idea for securing yourself against economic collapse
- vidarh 7y ago
  Depends what you are preparing for. If you think automation is going to happen but that capitalism will survive, then index funds seems line a good idea. If you think capitalism will be supplanted, it depends on what you think will replace it. If we're looking at a Mad Max style dystopia, then sure, it won't help to have lots of shares. But presumably you'd see signs of that before we get there and be able to start converting your money into harder currency. If we're looking at a benign-ish revolution with redistribution it won't matter much. Personally I think the most realistic medium term risk scenario to protect against is that capitalism will hang in there, but that jobs become more scarce. An outright economic collapse or major social upheaval is likely to take more time. If you start seeing job scarcity hitting, then sure, start converting some of those index funds just in case things accelerate in the wrong direction.
  - orpep90nxkfo 7y ago
    I guess I’m assuming “economic apocalypse” means “fall of the nation state concept as we know it.” since that is the lynch pin for economic trade. Business operations as a whole are so reliant on the legal rails, like it or not, they’d have to fail spectacularly to create “economic apocalypse” to my mind. I forget some people see run of the mill loss of wealth status as akin to loss of life. So perhaps apocalypse to them means going from $100 million in wealth to merely $10 million, but the social foundations that support that wealth largely remain intact
- golemiprague 7y ago
  I invest in guns so I can come and take the food from people like you, maybe also enslave you so you can keep doing all those useful things.
- Nasrudith 7y ago
  The thing about apocalyptic preparations are it is all scope dependent. If it is local than portable valueables and GTFO as an emmigrant able to pay their way is better than five lifetimes of canned goods. And even then the collapsed area will either reestablish a regeime of some sort or be colonized by intact neighbors. If it is world wide collapse than productive skills may be the best - since even if you have guns you may be outgunned but if you can supply food any remotely smart bandit or warlord would prefer the reliable food stream of a living serf under their protection than just a storehouse's worth. Of course these are all very long odds and preventing a collapse is likely a far better use of resources.

ZhuanXia 7y ago

My model is that as median labour power decreases capital and superstars should capture a larger percentage of future productivity increases. And automation should provide huge productivity increases. This seems compatible with index funds being a good bet. Perhaps I am wrong, but could you provide details as to why?

marktangotango 7y ago
Can you talk about how superstars would capture future productivity increases, in practice?
- koolba 7y ago
  It’s no different then the proverbially 10x programmer landing a consulting gig for literally 10x the compensation of a nobody.
- deleted 7y ago
  [deleted]
nostrademons 7y ago
The model is incomplete in the details (as most models are). The actual effect is that capital in the companies that are taking advantage of the new globoticized future does great. FANG does great. Upwork does great. AirBnB and Stripe do great, once they go public. Labor and capital of old-line companies do terribly. This type of economic transformation doesn't just result in layoffs, it results in whole companies going out of business. Their value-networks are adopted to the cost structure of the old world; as that cost structure changes, they have no reason to exist as a firm. When you buy an index fund, you're buying both of these types of companies. You should probably do okay, because the public market is actually pricing a lot of this phenomena in already: multiples on old-line companies are severely depressed while FANG shares are soaring, and the capitalization-weighting of the index is taking this into account. But you're leaving money on the table: many of the biggest winners will be new fast-growing startups that aren't public yet.