Conspiracy of the Rich, How much should I be worried?

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phenom34
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Conspiracy of the Rich, How much should I be worried?

Post by phenom34 » Fri Feb 17, 2012 2:52 am

I just read Kiyosaki's Conspiracy of the Rich and most of it seems reasonable/true. He does offer a bunch of great ideas of course.

He is a big hater of the stock/bond/mutual fund market, however does mention Bogle as one of his heros (huh?).

One thing that does bother me is the fact that many baby boomers will be retiring in the near future and will pull out tons of money from the stock market (Being that their retirements are heavily invested in stocks). This will greatly lower demand and I fear it will hurt prices.

I feel that for the most part the reason he nags them is tax inefficiency, high cost, and some other reasons which I think i am covered against with wisely picked and set up Vanguard funds.

I know not to act on emotion and have been doing pretty well so far but this is a valid point to me.

Any input?

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Re: Conspiracy of the Rich, How much should I be worried?

Post by dave66 » Fri Feb 17, 2012 3:05 am

Considering that one of his main claims, is that the wealthy have somehow collectively manipulated the public education system, to only turn out good worker bees, to take advantage of in their grand scheme of world domination... is right up there with chemtrails and underground UFO bases. I wouldn't take any predictions he makes too seriously.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Karamatsu » Fri Feb 17, 2012 3:53 am

Personally I wouldn't take Kiyosaki seriously about anything, but on the question of whether changes in demographics will affect stock prices, the sure answer is that nobody knows. Lots of people have opinions, and some publish badly-written books to market those opinions, but nobody knows. Consider that the US stock market is quite popular with foreigners, including the up-and-coming younger generations in Asia. Any slack due to retiring boomers may well be taken up by them. Or consider that, if the boomers have been pacing their age in bonds, changes in demand will not only be very slow and subtle over time, but we've been living these changes all along. No big deal. They are not likely to simply leave the market en masse. Or then again, all a corporation has to do to maintain a constant balance between supply and demand in an environment of shrinking demand is buy back shares.

So I think (as if I know anything!) that although there are valid reasons to get out of the stock market, I don't think US domestic demographics and Kiyosaki are really among them.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by SimpleGift » Fri Feb 17, 2012 4:08 am

phenom34 wrote:One thing that does bother me is the fact that many baby boomers will be retiring in the near future and will pull out tons of money from the stock market (Being that their retirements are heavily invested in stocks). This will greatly lower demand and I fear it will hurt prices.
For a thorough and impartial analysis of the "baby boomer retirement effect" on asset prices, see this report to Congress by the Government Accounting Office (GAO) from 2006.
GAO Report wrote:Our analysis of national survey and other data suggests that retiring boomers are not likely to sell financial assets in such a way as to cause a sharp and sudden decline in financial asset prices. A large majority of boomers have few financial assets to sell. The small minority who own most assets held by this generation will likely need to sell few assets in retirement. Also, most current retirees spend down their assets slowly, with many continuing to accumulate assets. If boomers behave the same way, a rapid and large sell off of financial assets appears unlikely. Other factors that may reduce the odds of a sharp and sudden drop in asset prices include the increase in life expectancy that will spread asset sales over a longer period and the expectation of many boomers to work past traditional retirement ages.
Cordially, Todd

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Re: Conspiracy of the Rich, How much should I be worried?

Post by SP-diceman » Fri Feb 17, 2012 5:15 am

Simplegift wrote:
For a thorough and impartial analysis of the "baby boomer retirement effect" on asset prices, see this report to Congress by the Government Accounting Office (GAO) from 2006.
"Impartial" ;)

now thats funny!

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Valuethinker » Fri Feb 17, 2012 5:21 am

phenom34 wrote:I just read Kiyosaki's Conspiracy of the Rich and most of it seems reasonable/true. He does offer a bunch of great ideas of course.

He is a big hater of the stock/bond/mutual fund market, however does mention Bogle as one of his heros (huh?).

One thing that does bother me is the fact that many baby boomers will be retiring in the near future and will pull out tons of money from the stock market (Being that their retirements are heavily invested in stocks). This will greatly lower demand and I fear it will hurt prices.

I feel that for the most part the reason he nags them is tax inefficiency, high cost, and some other reasons which I think i am covered against with wisely picked and set up Vanguard funds.

I know not to act on emotion and have been doing pretty well so far but this is a valid point to me.

Any input?
1. the US is in a global capital market. Yes the developed countries are aging (Japan, Italy) but there are lots of younger countries coming up.

Foreigners buy US stocks. If US stocks are cheap compared to foreign stocks, or bonds pay attractive yields, foreigners will buy them.

Examing US stocks and bonds in isolation from global trends is foolish.



Note this is much less true of houses. In places where foreigners do buy US houses (Miami, New York) prices have risen with the cheaper dollar. But generally foreign purchases of US houses are a small fraction of the total market. There, demographics *do* matter.

2. there's no good linkage between demographics and stock prices. People have tried. However, I have just seen a new paper (Rob Arnott in Financial Analysts Journal) which claims to make a more valid link.

But so far there is no wide agreement that there is a link between stock prices and age profile of a country.

3. Robert Kiyosaki is a liar. About 8-10 years ago Smart Money investigated his wealth claims. He has made ALL of his wealth via his bestselling books, seminars and products.

I would avoid Robert Kiyosaki's investment advice. He is a charlatan.


4. just as a general point in life, especially on the web, if someone says 'conspiracy' as in '9-11 conspiracy' or 'xx conspiracy' be very careful. History tells you that even where there were small conspiriatorial groups manipulating things, they usually effed up. The Assads really do run Syria as a private fiefdom, but look where that has wound up.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by HardKnocker » Fri Feb 17, 2012 7:29 am

Someone has to buy all the stocks the Baby Boomers will sell. Otherwise no sale.
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Re: Conspiracy of the Rich, How much should I be worried?

Post by Cut-Throat » Fri Feb 17, 2012 7:41 am

Valuethinker wrote: 3. Robert Kiyosaki is a liar. About 8-10 years ago Smart Money investigated his wealth claims. He has made ALL of his wealth via his bestselling books, seminars and products.

I would avoid Robert Kiyosaki's investment advice. He is a charlatan.

+1.......He's a phony.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by fishndoc » Fri Feb 17, 2012 8:46 am

Cut-Throat wrote:
Valuethinker wrote: 3. Robert Kiyosaki is a liar. About 8-10 years ago Smart Money investigated his wealth claims. He has made ALL of his wealth via his bestselling books, seminars and products.

I would avoid Robert Kiyosaki's investment advice. He is a charlatan.

+1.......He's a phony.
+2
From the book he wrote with Trump:
As Mr. Kiyosaki writes, "Donald and I can beat Warren's rates of returns on investment. He may be richer, but we can get richer faster using our own methods and use less money."
http://online.wsj.com/article/SB1160521 ... ge_left_hs
So, I guess Mr Buffet and Gates better watch out - they are soon gonna be passed by by Mr K on Forbes list of Richest Americans.
:lol
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Re: Conspiracy of the Rich, How much should I be worried?

Post by nisiprius » Fri Feb 17, 2012 9:17 am

Are you seriously reading a book with the word "conspiracy" in the title? That would put it higher on my "do not read" list than one with a title like "How You Can Profit From..." or "Magic Formula" or $'s in place of S's.

Valuethinker makes a thoughtful case that U. S. demographics aren't going to dominate the picture for U. S. retirees, because we are investing in a global world.

Personally, I was somewhat influenced by a 2002 book entitled What If Boomers Can't Retire? by one Thornton Parker, not to the point of it influencing my investment strategy, but reinforcing some general skepticism about how far to count on the "historical" return of the stock market. Around that time, there was quite a drumbeat of interest in privatizing Social Security, driven in part by a belief that making individual investments in the stock market was obviously far superior to contributing it to Social Security, a belief that has faded somewhat with recent returns. Parker questions the idea of "stocks for retirement" (for which he creates the initialism SFR).

I do feel that it's important to realize that there is really no way to store most of the actual things we will need in retirement. You cannot store all the gasoline you will need in 2042, or the airline seats, or the medical services. Even if it phsyically lasts, the television set you have today is not going to work well in 2042, and you cannot buy and store the holofactor transceiver you will need instead. Nor can you stockpile the doses of Transceptin-Q2 you will need, since it hasn't been invented yet.

I think demographics are something of a problem. Since you cannot really store what you need in retirement, it is always an intergenerational transfer, no matter how much it is made to look like storage. It's basically "Honour thy father and thy mother: that thy days may be long upon the land." Collectively, a lot of kids honouring a lot of fathers and mothers. However the social contract is structured, thirty years from now there will be relatively more retirees and relatively fewer younger workers. Those younger workers will need to be paying into Social Security, buying the stocks that the retirees need to be selling, and going into careers that involve caring for elders, whether it be gerontology or home health care.

I think there is likely to be be mild intergenerational rivalry as elders who want part-time jobs compete with younger workers. One of the whole purposes of Social Security was to get elders out of the labor market; the Townsend Plan that spurred Social Security explicitly made withdrawal from the labor market a condition for receiving benefits.

I think the aging of the United States has got to be something of an economic drag on the fortunes of U. S. citizens, but it's just one of innumerable factors, not an overwhelming one. Just don't count too strongly on a 7% real return from stocks in the future.
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Re: Conspiracy of the Rich, How much should I be worried?

Post by richard » Fri Feb 17, 2012 9:35 am

nisiprius wrote:I think demographics are something of a problem. Since you cannot really store what you need in retirement, it is always an intergenerational transfer, no matter how much it is made to look like storage. It's basically "Honour thy father and thy mother: that thy days may be long upon the land." Collectively, a lot of kids honouring a lot of fathers and mothers. However the social contract is structured, thirty years from now there will be relatively more retirees and relatively fewer younger workers. Those younger workers will need to be paying into Social Security, buying the stocks that the retirees need to be selling, and going into careers that involve caring for elders, whether it be gerontology or home health care.

I think there is likely to be be mild intergenerational rivalry as elders who want part-time jobs compete with younger workers. One of the whole purposes of Social Security was to get elders out of the labor market; the Townsend Plan that spurred Social Security explicitly made withdrawal from the labor market a condition for receiving benefits.

I think the aging of the United States has got to be something of an economic drag on the fortunes of U. S. citizens, but it's just one of innumerable factors, not an overwhelming one. Just don't count too strongly on a 7% real return from stocks in the future.
A factor to consider when thinking about demographics is rising productivity. Productivity is output per worker and productivity has been rising nicely for some time. This means you will need fewer workers in the future to produce what today's workers produce. As an illustrative example (made up numbers) assume today you have 3 workers per retiree and later you have 2 workers per retiree and productivity doubles. If so, everyone can have a higher standard of living - workers can both have more for themselves and transfer more to retirees.

Elders who want jobs do compete with younger workers and the competition may be expected to reduce wages as a first order effect, but it also means a larger economy, which means more stuff needs to be produced, which means more need for workers, which increases wages. Jobs are not a zero sum game.

Some day the younger workers will be retirees and will look to the next generation for support.

Certainly don't count on a 7% real return from stocks.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Mortgasm » Fri Feb 17, 2012 9:45 am

phenom34 wrote:
One thing that does bother me is the fact that many baby boomers will be retiring in the near future and will pull out tons of money from the stock market (Being that their retirements are heavily invested in stocks). This will greatly lower demand and I fear it will hurt prices.

Any input?
there are several counter balancing effects:

1) The global consumerization of markets: It's easier and less costly for global consumers, (US, Europe, China, Brazil, India) to invest in stocks. And the half-billion young people outside the US dwarfs the 50 million or so baby boomers. This will keep upside pressure on stocks.

2) Stocks are needed in retirement: It's not like they are going to take all the money off the table. They need a high equity percentage to get the total return to fund retirement because of the lost decade. They will have to remain more aggressive (and spend less).




So, although demographics definitely has an effect on markets, I don't know that it will be measurable against the classic fundamentals: yield and growth.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by fishndoc » Fri Feb 17, 2012 9:46 am

Nisi,
very well stated and summarized (as usual).
One opinion I would add : If one is looking at the Big Picture, any retirement investment is really just depending on the future generation of workers to honor the IOUs of their elders.
Therefore, it seems to me that the absolute best investment we could make for society as a whole is in the education and training of the future generation.
" Successful investing involves doing just a few things right, and avoiding serious mistakes." - J. Bogle

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Re: Conspiracy of the Rich, How much should I be worried?

Post by richard » Fri Feb 17, 2012 10:12 am

fishndoc wrote:One opinion I would add : If one is looking at the Big Picture, any retirement investment is really just depending on the future generation of workers to honor the IOUs of their elders.
Therefore, it seems to me that the absolute best investment we could make for society as a whole is in the education and training of the future generation.
Exactly. Why this isn't a universally held view is one of the great mysteries

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Re: Conspiracy of the Rich, How much should I be worried?

Post by SP-diceman » Fri Feb 17, 2012 10:13 am

nisiprius wrote:Are you seriously reading a book with the word "conspiracy" in the title? That would put it higher on my "do not read" list

I was thinking the same about, “Rich.”

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Valuethinker » Fri Feb 17, 2012 11:25 am

nisiprius wrote:I think there is likely to be be mild intergenerational rivalry as elders who want part-time jobs compete with younger workers. One of the whole purposes of Social Security was to get elders out of the labor market; the Townsend Plan that spurred Social Security explicitly made withdrawal from the labor market a condition for receiving benefits.

I think the aging of the United States has got to be something of an economic drag on the fortunes of U. S. citizens, but it's just one of innumerable factors, not an overwhelming one. Just don't count too strongly on a 7% real return from stocks in the future.
Nisi

There might be a drag on the housing market: Boomers trading down. But the US is not Japan: Gen Y, Gen Z etc. are bigger cohorts than the Boomers so net more households (assuming these kids can afford to move out from their parents).

In fact one of the best things we could do as western societies is encourage 'granny flats' where gran or grandad lives quasi-indepedently in a separate unit in the garden or separate apartment in the house. This would be repeating the Indian/ Chinese/ Italian model of multi generational family units, but in a way tha would work with our desires for privacy etc. (lest we think it all our way: apparently various forms of STD are *rife* in Florida old age homes-- gives one hope, really ;-)).

The real drag is healthcare costs. That is where the unsustainability lies-- the trend growth rate.

There is a wonderful article in the Guardian this week or last 'how doctors die' about how doctors choose to die. And the answer is they tend to eschew all the expensive complex life prolonguing technology of modern life. They just feel their time has come, and die.

http://www.guardian.co.uk/society/2012/ ... choose-die

Note written by an American doctor
It's not a frequent topic of discussion, but doctors die, too. And they don't die like the rest of us. What's unusual about them is not how much treatment they get compared to most Americans, but how little. For all the time they spend fending off the deaths of others, they tend to be fairly serene when faced with death themselves. They know exactly what is going to happen, they know the choices, and they generally have access to any sort of medical care they could want. But they go gently.

Of course, doctors don't want to die; they want to live. But they know enough about modern medicine to know its limits. And they know enough about death to know what all people fear most: dying in pain, and dying alone. They've talked about this with their families. They want to be sure, when the time comes, that no heroic measures will happen – that they will never experience, during their last moments on earth, someone breaking their ribs in an attempt to resuscitate them with CPR (that's what happens if CPR is done right).


The challenge of our generation: you at one end of the Boom, me at t'other is to make a moral choice on behalf of all future generations that, in truth, we don't want the medical system to spend hundreds or thousands or millions buying us a few more months.

That is the hard moral, technological, ethical, human question.

We cannot keep growing our spending on healthcare like we have (any country). We need to make clear choices about what we do and do not want.
For what is it to die but to stand naked in the wind and to melt into the sun?
And what is it to cease breathing, but to free the breath from its restless tides, that it may rise and expand and seek God unencumbered?


Only when you drink from the river of silence shall you indeed sing.
And when you have reached the mountain top, then you shall begin to climb.
And when the earth shall claim your limbs, then shall you truly dance.
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Implications for Bogleheads as Investors and in Financial Education

1. make a living will, executor set up etc. Make clear your loved ones know your position on resuscitation
2. get all your affairs in order whilst still cognitively healthy
3. you won't live forever, plan financially for that, but remember to enjoy life as well

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Valuethinker » Fri Feb 17, 2012 11:30 am

richard wrote:
fishndoc wrote:One opinion I would add : If one is looking at the Big Picture, any retirement investment is really just depending on the future generation of workers to honor the IOUs of their elders.
Therefore, it seems to me that the absolute best investment we could make for society as a whole is in the education and training of the future generation.
Exactly. Why this isn't a universally held view is one of the great mysteries
Oh yes. Education, health care, and the environment in which they will live.

In a very profound sense, we owe our children a duty which they cannot usually, and almost certainly will not, repay. Their existence is the repayment.
On Children Kahlil Gibran

Your children are not your children.
They are the sons and daughters of Life's longing for itself.
They come through you but not from you,
And though they are with you yet they belong not to you.


You may give them your love but not your thoughts,
For they have their own thoughts.
You may house their bodies but not their souls,
For their souls dwell in the house of tomorrow,
which you cannot visit, not even in your dreams.
You may strive to be like them,
but seek not to make them like you.
For life goes not backward nor tarries with yesterday.

You are the bows from which your children
as living arrows are sent forth.
The archer sees the mark upon the path of the infinite,
and He bends you with His might
that His arrows may go swift and far.
Let your bending in the archer's hand be for gladness;
For even as He loves the arrow that flies,
so He loves also the bow that is stable.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by SimpleGift » Fri Feb 17, 2012 11:32 am

SP-diceman wrote:
Simplegift wrote:
For a thorough and impartial analysis of the "baby boomer retirement effect" on asset prices, see this report to Congress by the Government Accounting Office (GAO) from 2006.
"Impartial" ;)

now thats funny!
Right, I should know better than to use the words "impartial" and "analysis" in the same sentence. In this case, probably the word "disinterested" would have been better — as in the GAO not trying to get attention or sell a book with a provocative thesis.
Cordially, Todd

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Valuethinker » Fri Feb 17, 2012 11:40 am

Mortgasm wrote:
phenom34 wrote:
One thing that does bother me is the fact that many baby boomers will be retiring in the near future and will pull out tons of money from the stock market (Being that their retirements are heavily invested in stocks). This will greatly lower demand and I fear it will hurt prices.

Any input?
there are several counter balancing effects:

1) The global consumerization of markets: It's easier and less costly for global consumers, (US, Europe, China, Brazil, India) to invest in stocks. And the half-billion young people outside the US dwarfs the 50 million or so baby boomers. This will keep upside pressure on stocks.
I think you are wrong by a factor of 4x. My guess is that of 7 billion humans, at least 2 billion are under 25. Granted many of these countries are so poor that they will have little impact on the world economy. But I'll tell you this about Nigeria: if you want to see raw human talent, and raw human striving, and entrepreneurship, human charm and diplomacy, then go to Nigeria. The history of Nigeria says this will all fail (again) but there is an energy there.... Mumbai of course has it too, and it's far more real and significant in world economic terms.

India it's happening. Even in Bangladesh it's happening. Pakistan it might happen: it's a failed state, almost, but a vibrant and robust society. There are places in the Middle East where it is happening (believe it or not, there is a vibrant civil society in Iran, despite all the repression: 90% female literacy, vast reserves of education and entrepreneurship, thriving diaspora). Turkey, a future regional superpower, linked by language and culture to another 150 million+ people in Central Asia.

Man came from Africa. Africans are in some sense, what we all once were. And they are beginning to wake. Their footsteps took homo sapiens out of the east African plains and onto dominate the world. Again we can hear, in the distance, those restless footsteps moving.

A million odds laid against it: corruption, poverty, infrastructure, disease, autocracy etc. etc. etc. It has failed before. But in the distance you can hear those drums.

Just like the unnamed ancestor who took his family across the land bridge at Gibraltar and another across a dry Red Sea. In 100,000 years homo sapiens has not changed that much-- he is still a robust survivor, the tool user, the social animal. The primate that walks upright, is walking, again.

Go there sometime. You can feel it in the sudden sunsets and sunrises, in the dusty air, in the animals who have known humans for thousands of years. This feels the place from which we sprung. You can feel it in the laughter of the people, in the elaborate and complex and impenetrable social arrangements, in the bright colours of the clothes, in the songs and chants. We are Africa. Africa is us. All of us. The raw potential of the human race is still there in those people.
2) Stocks are needed in retirement: It's not like they are going to take all the money off the table. They need a high equity percentage to get the total return to fund retirement because of the lost decade. They will have to remain more aggressive (and spend less).




So, although demographics definitely has an effect on markets, I don't know that it will be measurable against the classic fundamentals: yield and growth.
Precisely. The demographic story has never quite played out against the valuation story.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by fishndoc » Fri Feb 17, 2012 12:21 pm

Valuethinker wrote:
richard wrote:
fishndoc wrote:One opinion I would add : If one is looking at the Big Picture, any retirement investment is really just depending on the future generation of workers to honor the IOUs of their elders.
Therefore, it seems to me that the absolute best investment we could make for society as a whole is in the education and training of the future generation.
Exactly. Why this isn't a universally held view is one of the great mysteries
Oh yes. Education, health care, and the environment in which they will live.

In a very profound sense, we owe our children a duty which they cannot usually, and almost certainly will not, repay. Their existence is the repayment.
Probably true, but I meant what I said in a much more selfish way: The best way for me to enjoy a well funded retirement is to have a well educated, trained and highly productive workforce that is willing to share some of their production with me.

Especially since the "IOU" which I am asking them to honor seems to be little more than electrons bouncing around the internet (i.e., my portfolio at Vanguard, etc)
" Successful investing involves doing just a few things right, and avoiding serious mistakes." - J. Bogle

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Rodc » Fri Feb 17, 2012 12:30 pm

SP-diceman wrote:
Simplegift wrote:
For a thorough and impartial analysis of the "baby boomer retirement effect" on asset prices, see this report to Congress by the Government Accounting Office (GAO) from 2006.
"Impartial" ;)

now thats funny!
But do you have any argument that the GAO is wrong in their reasoning?

Perhaps because that is the argument I always make on these threads - boomers generally have little money invested and will decummulate slowly, and those that have a lot will largely leave it to heirs, so little to worry about - I don't see a lot to attack about their analysis.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by damjam » Fri Feb 17, 2012 12:37 pm

Historical data indicate a strong relationship between the age distribution of the U.S. population and stock market performance. A key demographic trend is the aging of the baby boom generation. As they reach retirement age, they are likely to shift from buying stocks to selling their equity holdings to finance retirement. Statistical models suggest that this shift could be a factor holding down equity valuations over the next two decades.
This is from the Federal Reserve Bank of San Francisco.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Valuethinker » Fri Feb 17, 2012 12:55 pm

fishndoc wrote:
Valuethinker wrote:
richard wrote:
fishndoc wrote:One opinion I would add : If one is looking at the Big Picture, any retirement investment is really just depending on the future generation of workers to honor the IOUs of their elders.
Therefore, it seems to me that the absolute best investment we could make for society as a whole is in the education and training of the future generation.
Exactly. Why this isn't a universally held view is one of the great mysteries
Oh yes. Education, health care, and the environment in which they will live.

In a very profound sense, we owe our children a duty which they cannot usually, and almost certainly will not, repay. Their existence is the repayment.
Probably true, but I meant what I said in a much more selfish way: The best way for me to enjoy a well funded retirement is to have a well educated, trained and highly productive workforce that is willing to share some of their production with me.

Especially since the "IOU" which I am asking them to honor seems to be little more than electrons bouncing around the internet (i.e., my portfolio at Vanguard, etc)
Agree I was (as per usual ;-)) going off on a tanget.

But it could be a workforce in another country.

That's the trick. The developed world will get old, and the underdeveloped world has to develop fast enough. There will be migration (any healthcare facility here is full of immigrants from emerging markets cleaning floors, deliverying meals, nurses etc.). But there will also be people in situ consuming goods and services.

You need both productive workers in America, and in other countries especially those with younger populations.

The whole question of stock returns linked to demographics seems to me to be suspect, because of all these other factors (globalization, global savings etc.).

It's easier to make the case for US demographic influences on:

1). US government securities - since retirees insurance companies and pension funds need assets which are risk free to default and currency, they have to invest in the above, driving down yields. In fact the whole financial crisis was driven by 'safe' investors like European pension funds needing AAA securities, and buying 'AAA' CDOs and A-rated European government bonds from southern European countries.

(so we can blame it all on Europeans ;-). Hurray! ;-).

2). property. Residential certainly (although the US still has net household formation and will continue to do so for the forseeable future *if* those young people get jobs). Commercial as well: will we need so many shopping malls or offices? (likely yes, but not perhaps in existing forms as much).

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Valuethinker » Fri Feb 17, 2012 12:56 pm

damjam wrote:
Historical data indicate a strong relationship between the age distribution of the U.S. population and stock market performance. A key demographic trend is the aging of the baby boom generation. As they reach retirement age, they are likely to shift from buying stocks to selling their equity holdings to finance retirement. Statistical models suggest that this shift could be a factor holding down equity valuations over the next two decades.
This is from the Federal Reserve Bank of San Francisco.
This is good research and widely cited.

I do not think it is conclusive though. There's no definitive answer whether the age profile of a country drives stock prices.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by PreserveCapital » Fri Feb 17, 2012 1:15 pm

If there is such a conspiracy I would like to be invited to join.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by clevername » Fri Feb 17, 2012 1:43 pm

I read "Conspiracy" by Kiyosaki just a few weeks ago. My uncle recommended I read it because he knows I'm "into investing and stuff." The whole book from beginning to end is filled with FUD (fear uncertainty doubt) and is designed to appeal to everyone's inner Market Timer and Alpha Chaser. He cherry picks data, abuses statistics, ignores the relevant behaviorisms that can cause problems with any financial strategy, contradicts himself many times, and is just generally WRONG on many other occasions.

Like many others have already pointed out, it is just not a good book. It is targeted at conspiracy theorists, gold bugs, End of the Worlders, kids 18-22 just starting out who don't quite know any better (I would've eaten this book up just a few short years ago) and anyone else who hates "those stupid rich people and bankers and greedy Wall Street people man."

I'm dismayed that my dear uncle suggested it. I try not to discuss financials in Real Life, along with politics religion etc, but I'm very concerned about his retirement if he's using "advice" in this book. I imagine that if it ever comes up I'll just nod and smile and change the subject ASAP. OP is best advised to return Conspiracy and get a copy of the Bogleheads Guide to Investing instead.
Last edited by clevername on Fri Feb 17, 2012 6:00 pm, edited 1 time in total.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by phenom34 » Fri Feb 17, 2012 5:04 pm

clevername wrote: OP is best advised to return Conspiracy and get a copy of the Bogleheads Guide to Investing instead.
Don't worry I read it already and follow it.
The funny thing is this guy lent me this book to read and I lent him the Boglehead book in return.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Steelersfan » Fri Feb 17, 2012 5:41 pm

I think I read somewhere that the phrase "not worth the paper it's printed on" was first used about Kiyosaki's work.

That may not be true, but it certainly applies.

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Re: Conspiracy of the Rich, How much should I be worried?

Post by peppers » Fri Feb 17, 2012 8:02 pm

Valuethinker, as usual, outstanding perspective. Thank you sir.
"..the cavalry ain't comin' kid, you're on your own..."

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Re: Conspiracy of the Rich, How much should I be worried?

Post by HardKnocker » Sat Feb 18, 2012 9:05 am

Just because you're paranoid doesn't mean everyone's not out to get you. :undecided
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Re: Conspiracy of the Rich, How much should I be worried?

Post by Call_Me_Op » Sat Feb 18, 2012 9:41 am

I laugh when I hear that retirees will start pulling their money out and take the market down with them. Thousands of people are retiring every day right now, and the market is shooting up.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Conspiracy of the Rich, How much should I be worried?

Post by stemikger » Sat Feb 18, 2012 9:53 am

Posted by ValuethinkerRobert Kiyosaki is a liar. About 8-10 years ago Smart Money investigated his wealth claims. He has made ALL of his wealth via his bestselling books, seminars and products.

I would avoid Robert Kiyosaki's investment advice. He is a charlatan.
I remember reading an article where they investigated Robert Kiyosaki's real estate holdings and they couldn't find anywhere near the amount he said he owned.

His wealth came from his books. Not real estate.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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Re: Conspiracy of the Rich, How much should I be worried?

Post by zaboomafoozarg » Sat Feb 18, 2012 1:44 pm

I prefer the Shadow Conspiracy, thank you very much:

Image

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Re: Conspiracy of the Rich, How much should I be worried?

Post by Ruprecht » Sat Feb 18, 2012 3:54 pm

Valuethinker wrote: Man came from Africa. Africans are in some sense, what we all once were.
Dude, I would seriously consider rephrasing that.

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