23 percent of Americans think cash is a good 10+ years investment.

[pdxmonkey]

What?! 25 percent picked real estate which was the most popular, but cash came in at #2. Seems like a good way to lose out on gains and lose spending power to inflation.

https://www.msn.com/en-us/money/savingandinvesting/54-million-americans-think-their-best-long-term-investment-is-cash/ar-BBuvFSn?ocid=spartanntp

[fattest_foot]

I'm amazed that real estate is so high still, while stocks come in lower than cash.

I swear it seems like no one realizes that the market had one of the best 5 or 6 year runs ever. Everyone was so blinded by the drop in 2008 that they somehow missed it.

If for some reason we had a big 25-35% drop in the next year, people would lose their minds and never trust the market again; thereby missing the next big run up.

[Kansas Beachbum]

55% of Americans over the age of 50 also have zero saved for retirement.  Some of the same folks I'd guess.

[Syonyk]

What?! 25 percent picked real estate which was the most popular, but cash came in at #2. Seems like a good way to lose out on gains and lose spending power to inflation.

Depends on what you expect the markets to do.

We live on a finite planet with a market system that more or less requires exponential growth to happen.  At some point, those two will come into conflict.

[ender]

55% of Americans over the age of 50 also have zero saved for retirement.  Some of the same folks I'd guess.

I doubt it, most people who want to save money and can visualize their on hand cash going up are probably not the people who magically think they will be able to retire.

This sort of survey would be interesting if it was correlated to net worth.

[pdxmonkey]

What?! 25 percent picked real estate which was the most popular, but cash came in at #2. Seems like a good way to lose out on gains and lose spending power to inflation.

Depends on what you expect the markets to do.

We live on a finite planet with a market system that more or less requires exponential growth to happen.  At some point, those two will come into conflict.

When they conflict cash is probably toast as well. In the mean time I plan to bet on the required exponential growth. It's required by fractional reserve banking and all that after all.

[beltim]

What?! 25 percent picked real estate which was the most popular, but cash came in at #2. Seems like a good way to lose out on gains and lose spending power to inflation.

Depends on what you expect the markets to do.

We live on a finite planet with a market system that more or less requires exponential growth to happen.  At some point, those two will come into conflict.

Except that the system doesn't require exponential growth.  In fact, there's no relationship between a country's economic growth and the returns of its stock market.

[Syonyk]

4% returns or whatever is exponential.

[beltim]

4% returns or whatever is exponential.

No it's not.  A company requires no growth to return any given sum to its investors.  For example, for a company to return 10% to investors, the company merely needs to have excess profits of 10% of its market cap each year.  Whether the company invests that money to growth the company or directly pay cash to the investors is in the analysis immaterial.

No exponential growth is required.

[SwordGuy]

I'm amazed that real estate is so high still, while stocks come in lower than cash.

I swear it seems like no one realizes that the market had one of the best 5 or 6 year runs ever. Everyone was so blinded by the drop in 2008 that they somehow missed it.

If for some reason we had a big 25-35% drop in the next year, people would lose their minds and never trust the market again; thereby missing the next big run up.

I believe that most Americans literally have no real understanding of the stock market.   They are fundamentally clueless.

If you hear someone say they lost money in the market, but the company didn't go out of business and they didn't sell any stock, they are probably clueless.  Ditto if they said they made money in the market but didn't receive any dividends or sell any stock. 

[tooqk4u22]

4% returns or whatever is exponential.

No it's not.  A company requires no growth to return any given sum to its investors.  For example, for a company to return 10% to investors, the company merely needs to have excess profits of 10% of its market cap each year.  Whether the company invests that money to growth the company or directly pay cash to the investors is in the analysis immaterial.

No exponential growth is required.

Compounding returns (ie whenever stock market returns are discussed) are exponential - so the 4% year in and year out would be exponential.  Bond returns or investments that pay out the same amount each year are linear regardless of fluctuation in rates/values are linear.  So if a company returns 10% of the initial market cap to its investors and that doesn't change you would have a linear return that would likely be eroded by inflation or the company's lack of economic viability.  For a linear return to be successful compared to the 4% rule you would need to know a specific timeframe and be sure that inflation is factored in. 

[beltim]

4% returns or whatever is exponential.

No it's not.  A company requires no growth to return any given sum to its investors.  For example, for a company to return 10% to investors, the company merely needs to have excess profits of 10% of its market cap each year.  Whether the company invests that money to growth the company or directly pay cash to the investors is in the analysis immaterial.

No exponential growth is required.

Compounding returns (ie whenever stock market returns are discussed) are exponential - so the 4% year in and year out would be exponential.  Bond returns or investments that pay out the same amount each year are linear regardless of fluctuation in rates/values are linear.  So if a company returns 10% of the initial market cap to its investors and that doesn't change you would have a linear return that would likely be eroded by inflation or the company's lack of economic viability.  For a linear return to be successful compared to the 4% rule you would need to know a specific timeframe and be sure that inflation is factored in.

My last comment was a bit unclear.  Compounding returns are exponential, yes.  But exponential growth is not necessary to get compounding returns.  As an example, the company that returned 10% of its market cap to investors each year can do so without providing any growth.  Your compounding returns would come from reinvesting that 10%, either in the company or another.

[JZinCO]

Beltim I think you misunderstood. You are correct mathematically but Synonyk said "4% returns are exponential" without mentioning company growth. Maybe I missed that was implied but I'm not going to read into their statement.
Nor did tooqk4u22 mention growth...

And in your example, you are also conflating return OF capital with return ON capital. I think both prior posters were speaking to the exponential curve which occurs when return on capital occurs simultaneously with reinvestments. A company need not grow to produce the exponential growth (of the investments + reinvestments + accruing returns).

[JZinCO]

I'm amazed that real estate is so high still, while stocks come in lower than cash.

I swear it seems like no one realizes that the market had one of the best 5 or 6 year runs ever. Everyone was so blinded by the drop in 2008 that they somehow missed it.

This is so very true. I'm constantly reminded by peers of the success they've had with "investing" in their primary residence by pulling out money from 401Ks which have "done horrible".

I want to give credit to some of the poll responses: Moreso than fears of volatility, I think the public soak in that the press has shat on investments so hard, pumping out articles about low returns, the promise of alt investments, etc. I think more people than less understand expected returns under typical economic conditions ("stocks good, cash bad"); but feel very despondent when asked about what they expect going forward (i.e. "all investments suck right now"). So this paralysis leads to the null option of holding cash or putting extra money towards the mortgage.

..now to read the article after weighing in ;)

[beltim]

Beltim I think you misunderstood. You are correct mathematically but Synonyk said "4% returns are exponential" without mentioning company growth. Maybe I missed that was implied but I'm not going to read into their statement.
Nor did tooqk4u22 mention growth...

It was in syonyk's original comment that I responded to:

We live on a finite planet with a market system that more or less requires exponential growth to happen.  At some point, those two will come into conflict.

And in your example, you are also conflating return OF capital with return ON capital. I think both prior posters were speaking to the exponential curve which occurs when return of capital occurs simultaneously with reinvestments. A company need not grow to produce the exponential growth (of the investments + reinvestments + accruing returns).

I'm not conflating the two - I'm specifically talking about distributions from profits, because profits, not exponential growth, is what drives investor return.  But I'm glad you get my larger point that a company need not grow to produce exponential growth for the investor.

[JZinCO]

Thanks for clarification.
For simplicity, I think of my bank account. Since $1 "invested" in my checking always equals $1, there is no capital appreciation (ie company growth). If I always took out my return after interest is payed out, it produces a linear curve. If I left the interest in there, the curve is exponential.

[Fishindude]

This is strictly personal opinion worth exactly what you are paying for it, but I feel like the next several years, maybe decade are going to be rough times for the stock market.   There are just too many people trusting in blind faith that they can put their money in the hands of these fund managers and get some kind of a decent return.   The trust is all based on "well, this is what the stock market has historically done".   I don't think it's a bad idea to preserve some of your portfolio in cash not getting any return, rather than risking it in the market. 

[Syonyk]

This is strictly personal opinion worth exactly what you are paying for it, but I feel like the next several years, maybe decade are going to be rough times for the stock market.   There are just too many people trusting in blind faith that they can put their money in the hands of these fund managers and get some kind of a decent return.   The trust is all based on "well, this is what the stock market has historically done".   I don't think it's a bad idea to preserve some of your portfolio in cash not getting any return, rather than risking it in the market.

Yup. :/

I keep a blend of stuff in the markets, cash in accounts, and cash on hand.  Like, physical.  Plus other diverse value stores.

And given the option to keep money in the markets or invest in something useful to me (tools, skills, spare parts, property improvements), I'll generally focus on the second.  If I build out a large set of garden beds, or a greenhouse, or (whatever), that's going to offer me an ongoing return, regardless of what markets do.

[JZinCO]

Fishindude, I share your sentiment about "rough times ahead", but do you actually expect returns, whether risk-adj or not, will be better for cash than for stocks?
I'm not typically a betting person, but I would put down money that the real return of the s&p will beat that of cash from now through july 2026.

[Fishindude]

Fishindude, I share your sentiment about "rough times ahead", but do you actually expect returns, whether risk-adj or not, will be better for cash than for stocks?
I'm not typically a betting person, but I would put down money that the real return of the s&p will beat that of cash from now through july 2026.

Wish I had these answers?
A lot is determined by age.   I might be better with risk in the market if I had more working years ahead of me, but I'm just about done with full time work, so in more of a "preservation" mode.

All you're going to get out of cash is a percent or two, which sucks, but at least you're not going to lose 25% of it overnight.   Going forward, I'm more inclined to work with my money myself in easy to manage business ventures, real estate, etc. rather than trusting the stock gurus.

[Classical_Liberal]

This is strictly personal opinion worth exactly what you are paying for it, but I feel like the next several years, maybe decade are going to be rough times for the stock market.   There are just too many people trusting in blind faith that they can put their money in the hands of these fund managers and get some kind of a decent return.   The trust is all based on "well, this is what the stock market has historically done".   I don't think it's a bad idea to preserve some of your portfolio in cash not getting any return, rather than risking it in the market. 

I agree it's not a bad idea to keep some cash in the current environment (10-15 percent).  However, my reasons are different.  The spread between govt bonds and cash returns is very low right now. High yield savings account 1-1.25% yield, 10 year treasury around 1.5% yield as I type this.  Both carry the backing of the federal gov't, but I have zero chance of price loss on the savings account.  I will then have the opportunity to take advantage of rising spreads if and when rates normalize a couple of points above projected inflation.  Essentially, I'm taking half of my normal bond allocation and keeping it in cash.  I would not do the same for my stock allocation, as market movements are too unpredictable.  Worst case, govt treasuries move towards negative territory and I lose out on small (likely temporary and unrealized) pricing gains in half my bond allocation. Best case, return to mean begins soon and I save some pretty significant bond pricing losses.

[dividendman]

Depends on what you expect the markets to do.

We live on a finite planet with a market system that more or less requires exponential growth to happen.  At some point, those two will come into conflict.

I've seen this comment multiple times in multiple threads and most people seem to agree that yes eventually it has to come to and end. I don't agree.

1) Technological gains increase productivity and resource usage at an exponential rate as well.  As long as this occurs it actually doesn't matter that the Earth is a closed system (which is another invalid assumption) for exponential gains to continue.

2) The Earth is not a closed system ("finite planet"). The primary factor influencing the Earth that is not within the Earth system is the Sun, from which we get oodles of energy and utilize very little. There are many other projects out there that are starting to see how we can utilize materials/forces outside of the Earth other than the Sun's rays as well (like the cooling power of space, or the tidal power of the moon).

3) Let's say that sometime in the distant future our technological gains somehow reach a limit on how efficiently we can use everything on the Earth. In my opinion, this will happen *after* we explore/colonize/etc. other planets/asteriods outside of the Earth, I'm basing this hypothesis by how close we are to getting people onto Mars vs us worrying about technological gains coming to an end here.

TL;DR - We can continue to have exponential gains on the Earth practically indefinitely, and if this ever runs out we will probably be off the Earth anyway

[Syonyk]

1) Technological gains increase productivity and resource usage at an exponential rate as well.  As long as this occurs it actually doesn't matter that the Earth is a closed system (which is another invalid assumption) for exponential gains to continue.

The law of diminishing returns seems to apply to pretty much everything.  I fully expect it will apply to technological gains as well.  I would argue it already is.  Things look great as long as you ignore the costs involved.

2) The Earth is not a closed system ("finite planet"). The primary factor influencing the Earth that is not within the Earth system is the Sun, from which we get oodles of energy and utilize very little. There are many other projects out there that are starting to see how we can utilize materials/forces outside of the Earth other than the Sun's rays as well (like the cooling power of space, or the tidal power of the moon).

We utilize quite a bit of the sun's energy.  It just goes to plants instead of industrial civilization's use.  If we manage to actually colonize space, great.  We kick the can another few hundred years, maybe.  But there's a ton of useful stuff on the bottom of the ocean too, that's radically easier to live on than space, and we're not doing much there.  I don't think humanity will manage to expand beyond a one planet civilization.  A few small outposts, perhaps.  Not anything meaningful, though.

3) Let's say that sometime in the distant future our technological gains somehow reach a limit on how efficiently we can use everything on the Earth. In my opinion, this will happen *after* we explore/colonize/etc. other planets/asteriods outside of the Earth, I'm basing this hypothesis by how close we are to getting people onto Mars vs us worrying about technological gains coming to an end here.

Ah.  You assume that we'll have an industrial civilization in the "distant future."  I think that's far, far less certain than you.

Space is seriously, seriously hostile to humans.

TL;DR - We can continue to have exponential gains on the Earth practically indefinitely, and if this ever runs out we will probably be off the Earth anyway

Ok.  I don't share your optimism.  The history of civilizations is that of an arc, and I'd argue that we've not, as "western industrial civilization," broken free of that arc.  We're arguably on the downswing.  So, "to the stars" doesn't seem likely to me.  And if we are on the downswing, then investments are not going to continue on the same path that they did for the past hundred years or so on the tail end of the upswing.

Progress is not linear.  Look at the arc of previous civilizations.  I can suggest some books if you're actually interested, though I suspect you'll just shrug me off as yet another kook.

[fattest_foot]

Wish I had these answers?
A lot is determined by age.   I might be better with risk in the market if I had more working years ahead of me, but I'm just about done with full time work, so in more of a "preservation" mode.

All you're going to get out of cash is a percent or two, which sucks, but at least you're not going to lose 25% of it overnight.   Going forward, I'm more inclined to work with my money myself in easy to manage business ventures, real estate, etc. rather than trusting the stock gurus.

Unless you sell your entire portfolio when the market goes down, you're not likely to lose 25%. You might want to read up on the Stock Series by JL Collins. Your working years are kind of irrelevant, it's more about your remaining living years. If you expect to die in the next 5-10 years, sure, I can buy your argument. But if you expect to live another 20, 30, or 40 years, and you think the market is going to be completely stagnant for that period, I guess there's no hope in changing your mind.

1) Technological gains increase productivity and resource usage at an exponential rate as well.  As long as this occurs it actually doesn't matter that the Earth is a closed system (which is another invalid assumption) for exponential gains to continue.

The law of diminishing returns seems to apply to pretty much everything.  I fully expect it will apply to technological gains as well.  I would argue it already is.  Things look great as long as you ignore the costs involved.

Why do you think technological gains will start diminishing? You seem like a pretty pessimistic person. This article is about artificial intelligence, but I recommend you read at least the first section under "The Far Future—Coming Soon." It seems to address the attitude towards technology that you have. Maybe you're just blinded by day to day life to see just how technology is advancing exponentially.

[Syonyk]

Why do you think technological gains will start diminishing?

Because pretty much everything is subject to the law of diminishing returns.  Technology doesn't seem to be an exception here.  We're running into limits of feature size on processors that are atomic in nature.  You can't do sub-atomic transistors that I know of, and we're pretty much as narrow as we're going to get.

And, depending on who you listen to, we're doing a pretty good job fucking up the biosphere.  Which we sort of need.  The costs of that are going to have to be paid one way or another.  Solar, wind, etc, aren't "free" either - they require very real resources out of the earth.

You seem like a pretty pessimistic person.

Comes with my line of work.  Plan for the best, prepare for the worst.  I'm literally paid to figure out what sort of bad things are likely to happen and to work out how to avoid those things, or reduce the impact.

Asserting "But TECHNOLOGY!" doesn't magically make it immune to the host of side effects, unintended consequences, and diminishing returns that everything else is subject to.  So, no, I don't believe that we're likely to see the projected-in-article insane general AI any time in my life, or ever.

Maybe you're just blinded by day to day life to see just how technology is advancing exponentially.

In 1994, with a 66mhz computer, and about 8MB RAM, I could type documents, program, process data, and generally get done what I want to get done.

In 2016, with a quad core 2.xx ghz something-or-other and 8GB RAM, I mostly do the same thing.

In the 1970s, we had supersonic transports.  In 2016, we don't.  They weren't worth keeping around.

I can't say an iPhone 6S with force touch is particularly revolutionary over an older version.  It's faster, but accomplishes about the same things.  The original iPhone was a major change in how things were handled, but cell phones have been fairly stagnant the last couple years.  Slightly better cameras, slightly faster processors going to do more fancy visual effects.  Woo?  At least we can chase Pokemon around!

And it's not like political systems are getting more functional with time.

So, no, I don't share your optimistic view of the future as being to the stars.  And, apparently unlike you, I'm spending a bit of time and energy preparing for what happens if that future doesn't happen.

[JZinCO]

Maybe you're just blinded by day to day life to see just how technology is advancing exponentially.

In 1994, with a 66mhz computer, and about 8MB RAM, I could type documents, program, process data, and generally get done what I want to get done.

In 2016, with a quad core 2.xx ghz something-or-other and 8GB RAM, I mostly do the same thing.

In the 1970s, we had supersonic transports.  In 2016, we don't.  They weren't worth keeping around.

Well that's a shit example. Here's a better one. In 1994, perhaps (?) you could do some RANS modelling in computational fluid dynamics. Now we can run LES to solve fluid dynamics problems. We can design planes.. on a computer.. that have 400 passengers and never ever have to build or test a model plane. That is freakin amazing. Same thing with cars. We can run optimization algorithms to design more fuel efficient car designs, without hours spent designing individual cars, no wind tunnel tests needed, we can skip all the intermediate designs and quickly achieve optimal designs. Just in the realm of fluid dynamics billions of dollars of spending and lost lives have been avoided when applied to problems of plumbing, building dams, improving building codes, and improving fire and weather forecasting. Right now I am tangentially involved with a project using Femtosecond Optical Frequency Combs and DNS computations to better improve fire modeling. Brand new shit...not thinkable or practical before..

Just because you think a stick of wood can only marginally get better to make your kindling doesn't mean the rest of the world isn't out there making spears, shelters and wood-based plastics.

Back to planes, the Concorde was a failure. It cost $20,000 back then to hop on. Now, a Denver based company is building a new supersonic plane that will fly trans-oceanic for the cost of a business class ticket.
Why? Just because we decided that the 1960's aero tech was 'good nuff' does't mean Moore's Law stopped. We just stop decided to investing in better flight. Tech hadn't stopped evolving in those 50 years and now supersonic flight is available with 30% less fuel consumption and emissions.

[JZinCO]

Why do you think technological gains will start diminishing?

Because pretty much everything is subject to the law of diminishing returns.  Technology doesn't seem to be an exception here.  We're running into limits of feature size on processors that are atomic in nature.  You can't do sub-atomic transistors that I know of, and we're pretty much as narrow as we're going to get.

Also, quantum computation.
The exact technology doesn't always have to improve for us to have technological improvement. Remember the wager Simon and Erlich had? Erlich had, as a true Malthusian, thought diminishing returns and limited supply were constraints. But the uses for the commodities involved had gotten replaced by other commodities.

[Syonyk]

Well that's a shit example. Here's a better one. In 1994, perhaps (?) you could do some RANS modelling in computational fluid dynamics. Now we can run LES to solve fluid dynamics problems. We can design planes.. on a computer.. that have 400 passengers and never ever have to build or test a model plane.

And the airlines don't have a huge use for 400 passenger super-Jumbos.  They mostly fly smaller designs.

We can run optimization algorithms to design more fuel efficient car designs, without hours spent designing individual cars, no wind tunnel tests needed, we can skip all the intermediate designs and quickly achieve optimal designs.

A 1908 Model T gets around 20mpg.  To be fair, it's a slow car.

A late 80s Honda CRX is a mid-40s mpg car.  Honest MPG, not EPA MPG.  So is a mid-90s Daihatsu.

We've... right.  Yeah.  The Fit is worse.  The hybrids are around the same.  Because we keep adding weight and luxury to cars.

Just in the realm of fluid dynamics billions of dollars of spending and lost lives have been avoided when applied to problems of plumbing, building dams, improving building codes, and improving fire and weather forecasting. Right now I am tangentially involved with a project using Femtosecond Optical Frequency Combs and DNS computations to better improve fire modeling. Brand new shit...not thinkable or practical before..

Or we could just build structures out of mostly non-flammable components.  I'm struggling to figure out how "We can model fires better" is particularly useful, as opposed to just putting them out.  You know what would be useful?  Dry sprinklers in every new house constructed.

Back to planes, the Concorde was a failure. It cost $20,000 back then to hop on. Now, a Denver based company is building a new supersonic plane that will fly trans-oceanic for the cost of a business class ticket.
Why? Just because we decided that the 1960's aero tech was 'good nuff' does't mean Moore's Law stopped. We just stop decided to investing in better flight. Tech hadn't stopped evolving in those 50 years and now supersonic flight is available with 30% less fuel consumption and emissions.

Let me know when I can actually fly on that fancy new supersonic stuff that I've been hearing about since the 90s.  Also, suborbital space planes were going to be around Really Soon Now.  I expect they'll be fusion powered, since neither one is likely to happen any time soon.  Besides, video conferencing (which is pretty slick) has made supersonic travel less important.

In the US, at least, our infrastructure is falling apart, we've got a political system that no longer even pretends to care what people think (two insanely unlikeable candidates going at it, trying to convince everyone that the other candidate is worse), and I can't say that I share your optimism about the future.

[renata ricotta]

Progress is not linear.  Look at the arc of previous civilizations.  I can suggest some books if you're actually interested, though I suspect you'll just shrug me off as yet another kook.

Progress for a particular civilization or government may not always be linear (and I think you may be looking at a too-narrow definition of "civilization," focusing on sub-civilizations or particular governmental system over time), but progress on the planet certainly has been linear up to this point. When a civilization goes defunct, it's not because each and every citizen of that civilization has been wiped off the planet, making their investing decisions moot. Or even that all resources of that civilization are sacked. They become folded into a new civilization. There are winners and losers in the transitions, but they don't signal the End of All Things. And circling back to the original topic at hand, if our American-hegemony civilization collapses, then dollars will be as useful as confederate currency, of no more use than shares in an index fund (or even real estate, if marauding hordes of Vandals or Visigoths can force me into being a refugee regardless my recorded deed of sale).

[JZinCO]

400, 200, 100, 40 passengers. shit's irrelevant. It's just a scaling factor. What's your point?

Jesus christ, if we ran by your rules we would have Triangle Factory fires daily. And since you don't beleive in modelling, it will be hard to have lessons learnt and improve our understanding of fire phenomena.
Sprinklers huh? How many, where? What psi? What temp cut off to turn on sprinklers? How many stairwells and what is their spacing? How long of a hallway run without egress? How man exits? Windows? At what density of people does that design fail at? If the density is too low, how do we improve design to avoid failure? Christ, I suppose we could use nonflammable materials, but I like my wooden desk and I think a concrete desk would be pretty immobile and expensive.

These are questions we can use computational solutions for in modern LES CFD code. But you know they depend on sub-grid models that are relatively old, hence the comb and DNS work to improve these subgrid models. So back to the point, evolving technology is improving our ability to make structures safe. You can't just say "oh, after people die and the structure burns up, we can just put it out. There! Who needs technology! Just put out the fire DUH!"

We could go on. When I started, we didn't have LIDAR and deriving digital elevation models was pretty difficult ad cost effective. Now we can download DEM rasters at 1m resolution at gb/sec rates on fibers and use geographic information systems to plan urban development in a way that avoids undesired flooding. Or, you know, we could walk the ground of the development like they did 20 yr ago, ignoring the upstream influences and downstream effects, make an estimated guess and then just shrug our shoulders when flooding happens.

edit: Is it safe that you have never either (1) cracked open a combustion physics textbook or (2) fought a fire?

[dividendman]

Maybe we should start another thread, sorry for the hijack!

Syonyk, you remind me of a colleague I had back in 2002 who could never stop talking about peak oil. All he ever said was we're all doomed due to peak oil. So I made him a bet, for 1k (which he actually paid!) that if in the next 10 years we ran out of oil or had such little oil that the economy and world system as we know it would collapse I would owe him, if not, he would owe me (I like those kinds of bets :)). I put a reminder in my hotmail calendar and it came up, I pinged him and he paid up! We are drowning in the amount of oil we have due to technological advancements.

Now all he can talk about is peak water.

You're right that individual technologies have limits and are subject to diminishing returns, but technological advancement is not. JZinCO makes a good point about quantum computation and the problem of transistors.

Sure, air travel might max out, maybe hyperloop travel takes over and is way better, maybe we get Star Trek like transporters.

There are already a lot of technologies being developed to counteract climate change as well.

Doomsayers said India was going to have endless famine because there were too many people - didn't come to pass due to the dwarf wheat advancement.

I think it's natural to have a bias that things are going to get bad, or keep getting worse, it just hasn't come to pass on a global scale... ever.

[dougules]

I'm amazed that real estate is so high still, while stocks come in lower than cash.

I swear it seems like no one realizes that the market had one of the best 5 or 6 year runs ever. Everyone was so blinded by the drop in 2008 that they somehow missed it.

If for some reason we had a big 25-35% drop in the next year, people would lose their minds and never trust the market again; thereby missing the next big run up.

I believe that most Americans literally have no real understanding of the stock market.   They are fundamentally clueless.

If you hear someone say they lost money in the market, but the company didn't go out of business and they didn't sell any stock, they are probably clueless.  Ditto if they said they made money in the market but didn't receive any dividends or sell any stock.

Very true, but how can you blame people when there's no education on the subject and a whole lot of misinformation.  Most people here are lucky enough to have the critical thinking skills to figure it out, but I think a lot of us have really had to do some digging on our own.  And without internet I think most of us here would also be fairly lost. 

It's very simple.  You buy a chunk of a company or companies, and you're part owner.  You get the money that your chunk of the company makes.  You get some of your money as cash, and you put some back into the company to make your profits grow even more.  There is a little more to it than that, but none of it is hard. 

Unfortunately, nobody ever hears it explained in clear, unintimidating language.  It should be taught in every high school.  You can talk about share prices, PE ratios, retained earnings, and dividend yields, but the concepts behind them do not need big $2 words.  Even a lot of seasoned investors get so wrapped up in technical analysis that they forget the basic underlying ideas. 

[beltim]

I'm amazed that real estate is so high still, while stocks come in lower than cash.

I swear it seems like no one realizes that the market had one of the best 5 or 6 year runs ever. Everyone was so blinded by the drop in 2008 that they somehow missed it.

If for some reason we had a big 25-35% drop in the next year, people would lose their minds and never trust the market again; thereby missing the next big run up.

I believe that most Americans literally have no real understanding of the stock market.   They are fundamentally clueless.

If you hear someone say they lost money in the market, but the company didn't go out of business and they didn't sell any stock, they are probably clueless.  Ditto if they said they made money in the market but didn't receive any dividends or sell any stock.

Very true, but how can you blame people when there's no education on the subject and a whole lot of misinformation.  Most people here are lucky enough to have the critical thinking skills to figure it out, but I think a lot of us have really had to do some digging on our own.  And without internet I think most of us here would also be fairly lost. 

It's very simple.  You buy a chunk of a company or companies, and you're part owner.  You get the money that your chunk of the company makes.  You get some of your money as cash, and you put some back into the company to make your profits grow even more.  There is a little more to it than that, but none of it is hard. 

Unfortunately, nobody ever hears it explained in clear, unintimidating language.  It should be taught in every high school.  You can talk about share prices, PE ratios, retained earnings, and dividend yields, but the concepts behind them do not need big $2 words.  Even a lot of seasoned investors get so wrapped up in technical analysis that they forget the basic underlying ideas.

Heck, even on this thread you can see the effect of separating the idea of stock ownership from the idea of index investing.  It leads to misconceptions like "the economy must grow at an exponential rate" to have compounding returns … when anyone with a storefront business on any main street in any town in the US knows that's just not true.

[Syonyk]

edit: Is it safe that you have never either (1) cracked open a combustion physics textbook or (2) fought a fire?

Correct.  Totally not my area of work.  Is it safe to say you've never written ring 0 x86 assembly?

In any case, sorry for the thread derail.

Back to mocking people who don't believe in the Almighty Markets that will Go Up Forever, apparently.  Enjoy!

[JZinCO]

edit: Is it safe that you have never either (1) cracked open a combustion physics textbook or (2) fought a fire?

Correct.  Totally not my area of work.  Is it safe to say you've never written ring 0 x86 assembly?

Yup, but I wouldn't walk into your work and say "hey you don't need to continually improve and progress because any advancements would be marginal at best and would not improve the lives of others however tangentially. If your computer crashes just buy a new one."
The issue isn't that you aren't well versed in fire protection engineering, because even I'm not. I just work with colleagues in that field. The problem is you cannot accept that advancements in technology and science are feeding back into improving engineering (or aerospace or vehicular design).

[Syonyk]

Yup, but I wouldn't walk into your work and say "hey you don't need to continually improve and progress because any advancements would be marginal at best and would not improve the lives of others however tangentially. If your computer crashes just buy a new one."

If the goal, which seems to be the case, is improving safety and reducing human life loss, are you better off further optimizing fire protection in commercial structures, or putting sprinklers (any sprinklers are better than none) in residences?  Somewhere around 80% of fire deaths are in homes, and I'm not aware of areas that require homes to have sprinklers.

[renata ricotta]

Yup, but I wouldn't walk into your work and say "hey you don't need to continually improve and progress because any advancements would be marginal at best and would not improve the lives of others however tangentially. If your computer crashes just buy a new one."

If the goal, which seems to be the case, is improving safety and reducing human life loss, are you better off further optimizing fire protection in commercial structures, or putting sprinklers (any sprinklers are better than none) in residences?  Somewhere around 80% of fire deaths are in homes, and I'm not aware of areas that require homes to have sprinklers.

C'mon. This and a couple other comments make it seem like you are quibbling about the details of people's examples, rather than making an actual argument to support your point. That's just being contrarian. Plenty of people can focus on making commercial buildings safer from fires and at the same time others can be working on a similar goal for residential structures. And even more people can be making technological advancements into "making buildings out of non-flammable products," as you suggested upthread. These are not reasons to conclude that we are reaching peak technology.

[pdxmonkey]

Well that's a shit example. Here's a better one. In 1994, perhaps (?) you could do some RANS modelling in computational fluid dynamics. Now we can run LES to solve fluid dynamics problems. We can design planes.. on a computer.. that have 400 passengers and never ever have to build or test a model plane.

And the airlines don't have a huge use for 400 passenger super-Jumbos.  They mostly fly smaller designs.

We can run optimization algorithms to design more fuel efficient car designs, without hours spent designing individual cars, no wind tunnel tests needed, we can skip all the intermediate designs and quickly achieve optimal designs.

A 1908 Model T gets around 20mpg.  To be fair, it's a slow car.

A late 80s Honda CRX is a mid-40s mpg car.  Honest MPG, not EPA MPG.  So is a mid-90s Daihatsu.

We've... right.  Yeah.  The Fit is worse.  The hybrids are around the same.  Because we keep adding weight and luxury to cars.

Snippy snip.

Cars weigh more, have more safety features and electronic crap draining power and yet they get similar mileage to the earlier CRX. Some cars get BETTER mileage. If it were legal to build a car with safety features like the 80s CRX today and we built one that has about the same power we could make it lighter due to better engines getting more HP per volume, etc. The better engines would also be more EFFICIENT. I suspect a modern transmission system would be lighter as well. You could make a CRX with much higher MPG today.

[CBnCO]

Isn't "cash" really just pieces of paper back by nothing tangible and given value only by the faith in a government that's accumulated $19T= in debt? And then, further manipulated by the government influenced Federal Reserve who assigns artificial interest rates to manipulate and control the economy and inflation. And, that's the best we have!

Of course, real estate is somewhat logical given the growing population of humans and the finite land to be owned; but, of course, the government, by virtue of their ability to tax (extract rent payments) all property, has pretty much laid claim to underlying ownership of all real estate and really eliminated the ability to hold land in a fee simple fashion.

Yep, I'm cynical; but, at the same time perplexed as hell as to how to successfully invest my hard earned digital credits (cash). Heck, maybe I should just relent and buy shares in companies who, for the most part, engage in non-necessary businesses like making lipstick or the servers to support the online sale of lipstick, or the payment processing to handle the lipstick transactions or the ad agencies to dream up seductive ways to sell lipstick, etc, etc, etc..

[renata ricotta]

Heck, maybe I should just relent and buy shares in companies who, for the most part, engage in non-necessary businesses like making lipstick or the servers to support the online sale of lipstick, or the payment processing to handle the lipstick transactions or the ad agencies to dream up seductive ways to sell lipstick, etc, etc, etc..

Sounds like an index fund to me!

[ooeei]

Why do you think technological gains will start diminishing?

Because pretty much everything is subject to the law of diminishing returns.  Technology doesn't seem to be an exception here.  We're running into limits of feature size on processors that are atomic in nature.  You can't do sub-atomic transistors that I know of, and we're pretty much as narrow as we're going to get.

And, depending on who you listen to, we're doing a pretty good job fucking up the biosphere.  Which we sort of need.  The costs of that are going to have to be paid one way or another.  Solar, wind, etc, aren't "free" either - they require very real resources out of the earth.

You seem like a pretty pessimistic person.

Comes with my line of work.  Plan for the best, prepare for the worst.  I'm literally paid to figure out what sort of bad things are likely to happen and to work out how to avoid those things, or reduce the impact.

Asserting "But TECHNOLOGY!" doesn't magically make it immune to the host of side effects, unintended consequences, and diminishing returns that everything else is subject to.  So, no, I don't believe that we're likely to see the projected-in-article insane general AI any time in my life, or ever.

Maybe you're just blinded by day to day life to see just how technology is advancing exponentially.

In 1994, with a 66mhz computer, and about 8MB RAM, I could type documents, program, process data, and generally get done what I want to get done.

In 2016, with a quad core 2.xx ghz something-or-other and 8GB RAM, I mostly do the same thing.

In the 1970s, we had supersonic transports.  In 2016, we don't.  They weren't worth keeping around.

I can't say an iPhone 6S with force touch is particularly revolutionary over an older version.  It's faster, but accomplishes about the same things.  The original iPhone was a major change in how things were handled, but cell phones have been fairly stagnant the last couple years.  Slightly better cameras, slightly faster processors going to do more fancy visual effects.  Woo?  At least we can chase Pokemon around!

And it's not like political systems are getting more functional with time.

So, no, I don't share your optimistic view of the future as being to the stars.  And, apparently unlike you, I'm spending a bit of time and energy preparing for what happens if that future doesn't happen.

And today you can literally talk to your cell phone, and have it answer questions for you using knowledge from all over the modern world.  You can do this with a device that takes you about a full day of work to save up for.  That was science fiction even 15 years ago. 

I can go out and build (or buy) a remote controlled aerial vehicle with a high definition camera on it that can hit 50+mph and weighs less than 2 pounds.

We landed a probe on another planet, and got live feed from it and controlled it on that planet.  That's a crazy huge step in human evolution.

A double leg amputee competed in the 2012 Olympic games in a RUNNING event because that's how good his prosthetics were.  You used to get a wooden stick (if you didn't die from an infection or blood loss).

You seem to be arguing:  "Well, certain specific consumer products have stalled or aren't being used to their full potential, so everything is looking bleak."  There's all sorts of great stuff happening.  Yeah, occasionally there are stalls here and there, but to imply that technology has peaked is ridiculous.  Are you really saying a model T is about as good as a modern car because it got 20mpg (in ideal conditions)?  There are multiple self driving cars driving around the United States right now. 

Transistor size limits are being reached, sure, but maybe progress isn't just about making processors more powerful or smaller.  There is so much more to technological advancement than processor size.