Earl Lemongrab wrote:avalpert wrote:It may be the case that 100 year stock returns in Japan are positive - and it may remain true 100 years from now but the same cannot be said for Russian shareholders from 100 years ago (at least 100 years ago March). So, again, stocks do not always go up long term - there are no guarantees at all.
How did Imperial Russian bond holders do? You can't really count those kind of events into a rational evaluation of investing. I mean, we could have nuclear war or an asteroid strike too.
This is a picture perfect example of the biases that make humans really bad at incorporating tail-risk into their intuition. Not only do we dismiss a real event that actually happened but it 'isn't even rational' to consider... sorry, the irrational thing ((and really textbook example of it)) is to not count those kinds of events - those aren't even black swan events, they aren't even hypothetical extremes, they are known possibilities that happened in humanities not that distant past.
So yeah, stocks always go up long term... except when they don't but those events don't count...