Three Things I Think I Think – Housing Bubble 2.0, Passive Investing And Hyperinflation

But the thing that bothered me about this specific article was that it so clearly contradicted itself. The author starts by arguing that passive investing is problematic because there’s nobody behind the scenes setting prices (which is wrong because passive needs active market makers and traders to work in the first place). But then it ends by saying that passive could be bad because 12 firms control US stocks and share voting rights and that these firms aren’t very active in voting. Well, which is it? Are they too powerful or are they not exercising that power? More importantly, who cares if they do own the voting rights and don’t act on them. After all, that is perfectly consistent with the concept of passive investing since passive investors don’t believe in intervening in corporate affairs to try to “beat the market”. Passive investors would rather let corporations be corporations and take whatever return they generate along the way.

Anyhow, I have a feeling I’ll spend most of the rest of my life discussing the same 5-10 financial myths so thank you for suffering through this with me.

So. Many. Bad. Hyperinflation. Narratives. 

There are lots of great reasons to be optimistic about cryptocurrencies. I won’t ever pretend to know which specific cryptocurrencies will perform well, but as a whole they’re one of the most interesting things growing in finance right now. But one of the worst arguments I consistently see from Bitcoin Maximalists is this idea that hyperinflation is right around the corner. Crypto could very well serve as a great inflation hedge. In fact, I’d expect it to perform very well during a high inflation. But a lot of the current narratives about inflation seem to be based on very poor understandings of inflation dynamics. For instance, there was a data set (at right) going around Reddit that a bunch of crypto people were pumping:

Okay, so, a bunch of issues here:

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Disclaimer: The content in this article is provided as general information only and should not be taken as investment advice. Article content shall not be construed as a recommendation ...

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