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Comment Re:Advisors? (Score 1) 71

I just closed a managed fund I held for 15 years. I worked out the compound rate of return was just over 1% per annum after fees, tax, and general mediocrity. Less than inflation. I would have been better off spending that money. Luckily I hadn't put much in. My own portfolio of stocks matched the market average in that time.

Comment Re:And who trusts Financial "Advisors"? (Score 1) 71

What rate of return do you think you can realistically generate, and for how long? The S&P500 inflation adjusted Compound Annual Growth Rate (CAGR) from 1980 to 2015, including dividends, was 8.13%. If you invested $10 in a passive index fund in 1980, then you would have $166.60 by now. Maybe you are a rockstar and can double that rate of return, every single year. Then you end up with just under $2000. Feeling rich yet? But if you invested $10,000 in a passive index fund in 1980, then you would have over $166,000 by now. Much better. That is why the rich get richer. The poor do too, just no where near as fast.

A lot of research shows that active funds under-perform the market average. And when you think about it, most funds cannot do any better than market average at best in the long run. Exactly the same as funds composed of random samples of stocks. And then the active funds charge transaction costs and management fees. Your market beating returns (if any) just went into the pockets of the fund manager. And how can most active funds consistently beat the market anyway? Any insider knowledge will become common knowledge in time. The best asset allocation will be copied in time. Rockstar fund managers take jobs elsewhere over time. Any market timing strategy will fail over time. You might as well pick a representative random sample of stocks and hold, saving transaction and management costs.

Comment Re:Counter flow drug money (Score 1) 158

Most likely. Trade imbalance is a potential wrinkle in every market. Other options are dealers could pay producers less, or brokers in wealthy countries could charge higher commission until the supply/demand equation improves. Maybe Afghan poppy farmers buy agrochemicals and motorcycles from the Chinese, who buy stolen iPhones from the US. Accounts need to be settled ;-)

Comment Re:Counter flow drug money (Score 1) 158

Pretty much how Hawala works. Client gives money to their local broker, plus a pass-phrase. The broker informs a foreign broker near the intended recipient of the sum owed and the pass-phrase. Client (e.g. drug dealer) tells recipient (e.g. drug producer) the pass-phrase. Recipient goes to his local broker and cashes in. A transaction happens, but no money actually moves. The brokers have to trust each other to settle balances eventually. This can happen when other customers transfer a similar amount back (terrorists buying surplus weapons on the black market), when a broker sends actual money, or even indirectly via other brokers. The anti money laundering / anti terrorism financing regulations can't do squat about it.

Comment Re:Game theory in open salaries (Score 1) 258

This sounds like a slight variation on prisoners dilemma. Should you maximize your own income (you will never really know) and screw everyone else, or should you collaborate with the other employees and maximize everyone's incomes? Keep in mind that the company is playing its own game, maximizing profits. If it can make greater profits by concealing underpayment of some employees from each other, then it will do so, including underpaying you if it can convince you that you got a good deal.

Comment Re:70s (Score 1) 729

What he means is can the company contract out the lowest paying jobs in the company (cleaners, phone callers, paper shufflers, assemblers, etc), so only high skill high pay jobs remain within the company, then pay the CEO 10x the "lowest" paid employee. If a company only employs high skill high pay staff than the CEO can naturally earn far more than the CEO of a company which retained its low skilled low pay staff. Net effect, same pay as before.

Comment Re:We COULD get by working 10-20 hours a week (Score 1) 729 loan someone money, you have to have money...

Kind of. Fractional-reserve banking means banks can lend out more money than they receive in deposits. You are right about borrowers paying approximately twice the value of their house on a 30 year mortgage due to interest. Most people don't mind because they expect the value of their house to double over that period too. Due to the fractional-reserve thing, not all the money goes to the depositors either. The banks use the difference between interest received and interest paid to pay wages, rent, electricity, suppliers, tax etc. What remains is profit. The 1% make their wealth in many other ways, not just interest on loans.

Comment Re:Hmm... (Score 1) 555

In my country, fences were made mandatory around swimming pools some years ago. At the time people bellyached about costs, and insisted common sense measures such as supervision etc could stop children from drowning. Fact is people did stupid shit, didn't watch their children, and their children drowned. Now there are virtually no child swimming pool drownings. People still do stupid shit and don't watch their children, but at least their children don't drown. We can't criminalize stupid (I wish), but we can mandate fences around swimming pools. Either way would work. We're still working on the driving over children in driveways problem, but when a viable solution is found, that too will be mandated. People are stupid. It's OK to mandate measures for their own protection, even if ( it costs more | it doesn't always work | it looks ugly | I have to change my routine | people find other ways to kill themselves | common sense makes it redundant | I don't like government interference | some other excuse ).

Comment Re:Just like being on-call (Score 1) 151

I suspect that for many of us, it's not that we don't want to put in more time or effort, it's that the company fails to get the best out of us. I used to happily work overtime, and flexible time. Then my manager started to jerk me around. So now I put in a standard 8 hour day, and I use the rest of my time for my own things (hobbies, up-skilling, find another job). That's the deal. They can get more out of me if they want, for free, but they don't want. Meanwhile my manager works however she wants. I also used to take the initiative and innovate all the time. Then my manager started asking me to write reports for her about the advantages and disadvantages of each choice etc. Now I keep my mouth shut. In a few years time my manager may wonder why we are no longer competitive. If your company rewards you for your effort, then that is good. But if they punish you, then you would put your effort elsewhere pretty quickly too.

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