Wednesday, November 12, 2014

Fortune "Q&A: Star investor Ron Baron on Tesla and his top stocks for the long run"

I thought this was incredible:

Q: Where are the opportunities today?
A: The stock market doubles every 10 years as it has for the past 100 years. What we're trying to do is make sure we double our money every five or six years. But you never know - some companies we think are the greatest, and they don't work out.
That's about a thousandfold increase every century. Not going to continue. Hasn't happened in other countries. This will be one of the failed exponential trends that Stagflationary Mark talks about.

We see that the $8 billion Baron Growth Fund owns some Carbo Ceramics - which seems like a great short to me.


Stagflationary Mark said...

This will be one of the failed exponential trends that Stagflationary Mark talks about.

If we assume a 6% real yield and start with a one penny investment then it will grow to an inflation adjusted $200,000,000,000,000,000,000,000 in just 1,000 years.

0.01 x 1.06^1000 = 2 x 10^23

So yeah, I think there's probably a good chance for failure at some point, lol. Sigh.

Stagflationary Mark said...

On the off chance I'm wrong, perhaps it would be wise to take one penny from the trillions of dollars in MZM and invest it in the stock market for future generations.

Assuming our population grows at 1% per year, we can expect there to be 6.7 trillion Americans in 1,000 years. That initial penny will be more than enough to make everyone rich beyond measure.

That's assuming, of course, that my 6% real yield assumption and my 1% population growth assumption are both valid, lol. Sigh.

Stagflationary Mark said...

This post inspired one of my own.

A Long-Term Plan to Make Every Human a Real Trillionaire

If we can safely assume these three "sure things" and we divvy up the proceeds of the initial one penny investment evenly, then 851 years from now every human on the planet will be a trillionaire (adjusted for inflation)! It's not just an opinion, it's a fact!

whydibuy said...

WOW. Worrying about what will happen in 1,000 years.
And here I thought you guys were hard core bears. Well, we found something you really are optimistic about.

Stagflationary Mark said...


Looking for something with a shorter time frame? Not a problem!

Corporate Profits as a Percentage of Personal Consumption Expenditures (Musical Tribute)

The following chart shows the 3-year moving average of corporate profits after tax with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj) divided by personal consumption expenditures.

Pop goes the weasel!

CP said...

"Exponential Economist Meets Finite Physicist"

"The Earth has only one mechanism for releasing heat to space, and that’s via (infrared) radiation. We understand the phenomenon perfectly well, and can predict the surface temperature of the planet as a function of how much energy the human race produces. The upshot is that at a 2.3% growth rate (conveniently chosen to represent a 10× increase every century), we would reach boiling temperature in about 400 years. [Pained expression from economist.] And this statement is independent of technology. Even if we don’t have a name for the energy source yet, as long as it obeys thermodynamics, we cook ourselves with perpetual energy increase."

CP said...

"many things are already as efficient as we can expect them to be. Electric motors are a good example, at 90% efficiency. It will always take 4184 Joules to heat a liter of water one degree Celsius. In the middle range, we have giant consumers of energy—like power plants—improving much more slowly, at 1% per year or less. And these middling things tend to be something like 30% efficient. How many more “doublings” are possible? If many of our devices were 0.01% efficient, I would be more enthusiastic about centuries of efficiency-based growth ahead of us. But we may only have one more doubling in us, taking less than a century to realize."

CP said...

"Even early economists like Adam Smith foresaw economic growth as a temporary phase lasting maybe a few hundred years, ultimately limited by land (which is where energy was obtained in that day). If humans are successful in the long term, it is clear that a steady-state economic theory will far outlive the transient growth-based economic frameworks of today. Forget Smith, Keynes, Friedman, and that lot. The economists who devise a functioning steady-state economic system stand to be remembered for a longer eternity than the growth dudes. [Economist stares into the distance as he contemplates this alluring thought.]"

Stagflationary Mark said...


From the comments of your link:

If you are right, then a big part of selling people to your vision will be finding a way to avoid describing it as dystopian. From some perspectives, a steady-state future economy that gives us breathing space to perfect the growth and quality of other dimensions of life – spiritual growth, artistic growth, growth of fairness and justice – could be a very pleasant way to live.

For what it is worth, I am firmly planted in the dystonian camp.

Stagflationary Mark said...

Freudian slip!

I meant dystopian. It came out dystonian because my girlfriend has Dystonia.

Dystonia is a neurological movement disorder, in which sustained muscle contractions cause twisting and repetitive movements...

Still applies! I think our economy will painfully contract many times over the course of my lifetime. Sigh.

John said...

"For what it is worth, I am firmly planted in the dystopian camp."


I prefer to think of it as the great flush.

Destroy the massive social pressures to reproduce that existed in the 1950's and early 1960s (the baby boom) in developed countries, introduce the pill, and the only people left alive in 3 generations are those with powerful reproductive instincts (as opposed to mere sex urges).

Life goes on.

Send massive food aid to continents inhabited by human populations with average IQs of 74 and birth rates at about 6 per woman and populations doubling every 30 years, and soon there is overcrowding. An ebola or similar virus comes along, there is a massive die off, and in the next generation most of the people have an IQ high enough to understand what a virus is and how it propagates.

Life goes on, humankind progresses.

All that is required to be a winner and pass your genes along to the next generation is to recognize mass delusions and refuse to jump off the cliff like he rest of the lemmings.

Anonymous said...

The great flush!

Bill and Hillary Clinton have one grandchild. Maybe there will be two.

Bill was born in 1946. Plenty of people born in 1946 have 5x as many grandchildren.

Stagflationary Mark said...


All that is required to be a winner and pass your genes along to the next generation is to recognize mass delusions and refuse to jump off the cliff like he rest of the lemmings.

I must admit that I shall not be a winner of the new world. My girlfriend and I are not passing any genes along. We are, however, working hard to raise some happy pets. They aren't the smartest creatures on the planet, but at least they haven't racked up student loan debt, so that's somehting I guess, lol. Sigh.