We Shall Never Pass This Way Again Seals Youtube

'Nosotros Shall Not Pass This Way Again' Jack Bogle passed away final week. He may have been the only Wall Street mogul in history to have foregone personal enrichment all for the enrichment of his customers. He was the answer to "Where Are The Customers' Yachts?" and for this reason lonely his career should be lauded. https://twitter.com/jessefelder/condition/1085680405389422592 Besides his enormous accomplishment, a multi-trillion dollar non-profit asset management house in the midst of the almost profit-focused sector of the economic system, Bogle should exist praised for his candor and honesty. He, perchance meliorate than most, understood and openly discussed the potential negative ramifications of his own invention. https://twitter.com/dianabhenriques/condition/1085876483783045121 One of these negative ramifications is that the common buying enabled by the broad adoption of passive products encourages anti-competitive behavior among the companies invested in. Thus, to some extent, the do good to investors comes at the expense of the residuum of society. https://twitter.com/jessefelder/status/1085195944407126016 Just, equally Charlie Munger hinted at years agone, the real problem with passive investing is that, as it grows more popular, information technology begins to undermine its nigh bones assumption. For information technology to work properly requires a pregnant degree of efficiency in the markets, efficiency that can just be provided by a deep and agile puddle of thinking investors. To the extent these folks are marginalized, the markets get less efficient and passive investing becomes less valid. https://twitter.com/jessefelder/status/809819815066083332 These "preposterous results" are exactly what nosotros have seen recently as passive investing has been taken to the extreme. Investors, encouraged by the contempo unprecedented success of a buy-and-hold arroyo, poured money into the funds pushing prices (and valuations) ever higher encouraging fifty-fifty more than inflows in a virtuous cycle. https://twitter.com/jessefelder/status/1074823815736279040 Withal, this was not at all what Bogle intended. Certainly, he may have understood well how his invention had been bastardized by those looking to rationalize the greed that drives every mania. His last counsel to investors seems directed squarely at these folks. https://twitter.com/jessefelder/condition/1078776045921361920 Hither again, nosotros should not only find reason to praise this legend of the business merely as well reason to emulate him. Imagine what we could attain if we all focused just a fleck more than on intellectual generosity delivered with a personal kindness. https://twitter.com/cullenroche/status/1085770899242967040 Rest in peace, Jack. Anticapitalism Goes Viral It'southward hard to blame passive investing for all of the ills that plague our modern form of capitalism, namely an explosion of anti-competitive beliefs along with an anti-labor movement that has contributed to income and wealth inequality like we have never seen earlier. There are certainly many other dynamics at work, including extreme monetary policy and growing corporate influence in Washington not to mention the natural forces of demographics and globalization. All of these things have played their part in shifting the portion of profits that historically has gone to labor into the pockets of shareholders. And it's impossible to accurately attribute to each of them their rightful contribution to the problem. That said, it is also impossible to deny that the backlash against the current form of shareholder-offset capitalism (damn the stakeholders) is gaining traction and the media is mirroring the sentiment of the populace. https://twitter.com/jessefelder/status/1085919616461885442 The mood surrounding Davos this year too reflects both the growing anti-elitist sentiment and the willingness of people to openly speak well-nigh it. Anand Giridharadas, author of "Winners Take All", did a terrific chore of summing up the current zeitgeist in this regard. https://twitter.com/BloombergTV/status/1085879850664103936 The viral popularity of Alexandria Ocasio-Cortez, the youngest adult female e'er elected to the Firm of Representatives, is also a testament to the strength of the opposition to the condition quo in corporate America. Her very offset speech broke C-Bridge viewing records concluding week and it couldn't be more obvious that she stands for taking back what corporations have usurped from people over the by xxx years or then. While some may write her off, every bit the New York Times recently reported she is moving the Autonomous political party sharply to the left, whether they like information technology or not. https://twitter.com/jessefelder/status/1085920100870438913 This is a shift that bound to be a very expensive i. Modern Budgetary Theory, the philosophical bedrock of the new policies proposed past progressives, posits that fiscal policy should non concern itself with the cost of policy; leave that to the Treasury and the central bank. The Fed tin can but buy up all the debt the Treasury needs to result in gild to finance the government. https://twitter.com/jessefelder/status/1084871415269130241 The thought here is that so long as nosotros borrow in our own currency we tin never borrow to the point of going broke. The truth is, just as passive investing is being used to rationalize greed in the markets today, MMT is simply being used to rationalize greed in politics. https://twitter.com/EpsilonTheory/status/1086053604883156992 And inflation is, to a great degree, reliant on Fed credibility - that is, the idea that the Fed will alive up to its mandate past keeping inflation under wraps. With the Fed already technically insolvent, if it were forced by Congress (or fifty-fifty if it appeared to be forced) to monetize the debt then aggrandizement could soon go a very big trouble merely as a outcome of people believing it to be a problem. https://twitter.com/jessefelder/status/1086301418674421760 MMT recognizes that such fiscal dominance and monetary accomodation could exist inflationary. Their answer to this problem is, if inflation rises we tin can raise taxes to rein it in. With the trajectory of the debt already getting more vertical this could mean a pregnant ascension in taxes. The most obvious candidate for such a shift would most certainly be the contempo corporate tax cuts. As I have noted here in the recent by, House speaker Nancy Pelosi has already promised they would be repealed. https://twitter.com/jessefelder/status/1085573312862928897 With corporate leverage off the charts, higher interest rates would certainly pressure margins at least as much as a higher corporate tax rate, not to mention the other price pressures associated with a shift from disinflation to inflation. In addition, higher discount rates practical to lower profits (amongst margin contraction) would exist doubly painful for investors. In other words, these societal shifts we are witnessing stand for an indirect attack on both corporate profit margins and valuations. Tech Has A Target On Its Back The sector most representative of the margin explosion in recent years, not to mention elitism and the centralization of ability, is also uniquely at risk of a reversion of turn a profit margins to a more historical norm. https://twitter.com/TeddyVallee/status/1084489362937704448 In fact, the majority of tech companies are already reporting they await a contraction in turn a profit margins in the fourth quarter - even with the favorable comparisons created past the taxation cuts! https://twitter.com/jessefelder/status/1084159306273120256 It may ultimately plow out that the profit margins of recent years were inflated by the fact that companies but ignored investing in costs they are at present discovering were crucial to the long-term wellness of the business organization. https://twitter.com/fredbenenson/status/1068542503513665536?ref_src=twsrc%5Etfw Some are even beginning to ask whether these companies should exist held accountable for intentionally nether-investing in precautionary measures that clearly should accept been taken. What would Facebook'southward financial liability were it establish guilty of such in the case of the Myanmar genocide? More realistically, what will information technology toll Facebook to endeavor to prevent a recurrence of the tragedy there or anywhere else on the planet? https://twitter.com/jessefelder/status/1066778897042337792 There is, in fact, a lawsuit currently underway that could determine, in a minor manner, the legal liability for companies in this state of affairs and thus has major implications for well-nigh every large tech company in existence. https://twitter.com/jessefelder/status/1084878385489297409 Even if they are non found to be legally liable, the companies are outset to understand that not investing in protecting users, while it may exist good in the brusk run in terms of the bottom line, has major long run implications for the top line. https://twitter.com/jessefelder/status/1083036756356853760 While it may seem as if users are oblivious, the facts prove that the (well-deserved) damage done to Facebook'southward reputation over the past 12 months is having an affect on its users. This is part of the strong impetus Facebook at present has to spend a great deal of money trying to fix its unfixable issues. It is likewise a clear warning to every other visitor in the industry. Protect the bottom line at the long run take chances of the top line. https://twitter.com/jessefelder/condition/1085930268966510592 The groundswell of support for the backfire confronting big tech too continues to gain steam. Time magazine this week made it the focus of its issue featuring an in depth piece on Facebook past Roger McNamee calling for a plethora of new regulations for the manufacture. https://twitter.com/jessefelder/condition/1085928085256630272 The result also includes a piece written past Apple CEO, Tim Cook, calling for even more than regluation of not but the companies that collect and track our information but also the companies that aggregate and sell information technology, the information brokers. https://twitter.com/jessefelder/status/1085925588651728898 As I have written earlier, the impetus to rein in big tech is a nonpartisan event. At his confirmation hearing this calendar week, the nation'due south new Attorney General fabricated several comments on the topic. Breaking Views reported: "He told senators that he would like the department to become more than involved in anti-competitive bug, privacy and data concerns. He said the market ability of Silicon Valley firms could let them to discriminate against rivals." https://twitter.com/jessefelder/status/1085923446431907841 Surely, there are not many things that the Trump administration and the progressive left run into eye to centre on just this is one. Don't be surprised to see greater scrutiny of proposed mergers in the tech space and even proposals to interruption up the big conglomerates. https://twitter.com/jessefelder/status/1085208656868794374 Most troublesome for the individual companies, though, may be the wildcat already underway on the part of their workforce. Recode reports that these folks, "have experienced years of growing frustration with what they find to be the tech manufacture's pursuit of profit at all costs, including ignoring ethical standards." They are fed up and willing to hold their employers' hostage in order to accept a greater say. Any threat to the "profit at all costs" style of doing concern is obviously a risk to profit margins. https://twitter.com/jessefelder/status/1086297235179139072 All of these things, every bit I am wont to say, are closely interrelated. The ascension of passive investing and elistism at the corporate and political levels forth with the trends of globalization and disinflation are at present at a major inflection signal or perhaps they have already passed it. Going forward centralization of power as embodied by big tech will trend towards greater competition and decentralization. Cryptocurrency may be expressionless only the inspiration backside it is stronger than ever. Globalization and disinflation are evolving into populist and nationalist policies that are clearly inflationary. As a result, investors will need to give up the "ignorance is elation" approach to the markets in favor of a much more thoughtful one. They will need to avoid companies virtually at risk of margin contraction and most exposed to labor cost and political pressures. Well-nigh importantly, they will want to avoid companies that most embody the elitism society is now railing against. They will too need to avoid the nugget classes and strategies that benefitted most from a disinflationary and plutocratic environment and try to focus on those that do good from an inflationary and populist 1. More than than ever before understanding the macro properties, rather than simply closing one's optics and buying stocks with both easily, will be the key to surviving and thriving in the future. Passive investing has had a bang-up run and while the cardinal lessons of it - what Bogle really gave us, namely broad diversification and rock-bottom costs - will remain, "we shall not pass this way again." The way forward will probable reward a vastly different approach to that which was rewarded in the recent past.

vazquezhaveracter91.blogspot.com

Source: https://thefelderreport.com/2019/01/18/we-shall-not-pass-this-way-again/

Share this post