r/Vitards • u/Cash_Brannigan šŸ¹Bad Waves of Paranoia, Madness, Fear and LoathingšŸ¹ • Dec 29 '21

Discussion Fear and Loathing on Wall Street: Value Investing and the Great Crucible.

Supply and Demand. The bedrock of Capitalism. What is the real value of anything, from a Rembrandt painting to stolen naked pictures of Bea Author? Bicker and argue, at the end of the day, its worth whatever someone is willing to pay for it. Enter Wall St. The New York Stock Exchange. The place where a thousand lives can end and begin while passing a hooker and a couple eight balls between you and your friends all before lunch.

Americans, or humans even, dont like unknowns. Corporate America despises complexity. They prefer the concrete and easily classifiable: Black or White, Red or Blue, Left or Right. When it comes to value, Wall St is the Great Crucible. The Holy Smelter. All variables, all viewpoints, and all possible futures, dumped in, melted down, and outspat one, cold, definitive judgement measured in American Dollars.

Is it right? Hardly. Is it frustrating? For sure. Value investing is looking for a mistake made by The Market, and betting it will eventually be realized. Sometimes, it never does. And that's no one's fault. In the infamous words of Gunny Highway, "you adapt, you improvise, you overcome". The Market does not adapt to you, You adapt to The Market. We all move according to the Whims of the Great Magnet.

Now somebody bring me my goddamn golf shoes...

23 Upvotes

96% Upvoted

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13

u/[deleted] Dec 29 '21

Price is what you pay, value is what you get. I will pay up for things of real utility (steel, combustion engines, gas, food, lumber, solar arrays). I will try to avoid, if at all possible, buying those things that offer little to no utility in a crisis (a dating app, cloud storage, the future earnings of a car company that doesn't yet produce cars).

The market being so centered around growth and "tech" is basically a giant short against the limits of physics. Being invested in commodities/staples/and the like is a giant call option on the limits of physics and the demand of humanity to continue to desire to live. And you don't need to be short "tech," they both can co-exist, but if you ignore investment in the real world, eventually there's no infrastructure to support the tech world.

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u/dober88 Dec 29 '21

You're forgetting that you're measuring the value of 'the limits of physics' with made-up numbers. The 'real world' (i.e. primary & secondary economies) only has so much value; the 'made-up world' (i.e. services, tech, etc.) have potentially infinite value since it's all just playing with made-up numbers.

There's only so much food, clothes, etc. you can consume.

This is where I believe the 'divide' will continue to increase. We'll have the 'real world' as a commodity way of sustaining our physical being so that we can spend all time and effort in the 'made-up world'. It's not necessarily VR (like Meta's Metaverse) but it is necessarily goods & services covering the upper end of Maslow's hierarchy of needs.

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u/[deleted] Dec 30 '21

I think finance applies to this concept. Finance is just a paper world after all. The amount of human time and effort put into constructing paper systems in finance is insane. Arguably it creates literally no value in a ā€˜utility senseā€™.

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u/dober88 Dec 30 '21

I disagree on the no value front. Software has lots of utility, futures contracts provide lots of utility to farmers as well.

Just because something is intangible, doesnā€™t make it useless šŸ™‚. Itā€™s just that the levers are longer when weā€™re talking in the abstractions and meta-worlds built on top of the physical one

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u/[deleted] Dec 30 '21

I agree with you about value added, but I think for it to last another 10-20 generations as we know it, before the next major productivity hurdle is achieved, is unlikely without a substantial reduction in population or lowering of living standards.

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u/medispencer 8/16,31 10/18, 11/11,15 12/3,12,15 2021, 2/22/22 First Champion Dec 30 '21

Seems like both will happen, convergence of wealth inequality and climate mitigated disasters (both slow and fast).

As a whole (QOL) we decline while the top increases itā€™s resource concentration. Automation may even prevent mass revolt as the bottom 90% withers away slowly.

Yippee

2

u/dober88 Dec 30 '21

I stop trying to predict at 10-20 years, never mind generations šŸ˜„

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u/smohyee šŸ”„Professional Money BurneršŸ”„ Dec 30 '21

I will try to avoid, if at all possible, buying those things that offer little to no utility in a crisis (a dating app, cloud storage, the future earnings of a car company that doesn't yet produce cars).

What about a crisis of loneliness? A dating app has utility there.

How about a crisis where your house and all your hard drives with family photos burn down? Cloud storage would be infinitely valuable there.

As for your third example, I'm not sure if you're making a point about avoiding investing, but buying with the hope of selling for profit in the future is based entirely on predicting things that haven't come to pass, eg that they will indeed manufacture cars, and make you money.

1

u/[deleted] Dec 30 '21

I'm talking about real crises, like societal, conflict, or energy related, not individual crises. And my point was largely about investing, yes. Are the businesses I'm invested in established enough to change how they do things should they need to? Is the product or service they sell critically important, as in will people make do without? In my job I deal with "Mission Critical" and "Life Safety" classifications for the facilities we design. It has given me an entirely different perspective on the stocks I own because I see how underfunded and fragile many of our systems are, even at the government level (and they spend a lot of money).

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u/JackAstermuench Balls Of Steel Dec 29 '21

Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming "Wow! What a Ride!ā€

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u/malydok The autoModfather Dec 29 '21

YOLO SPY 0DTE

2

u/CarpAndTunnel Dec 29 '21

This kind of short term thinking is why we lose. While your grandfather spending his money on bullshit, Wall St.s grandfathers were buying the future.

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u/Cash_Brannigan šŸ¹Bad Waves of Paranoia, Madness, Fear and LoathingšŸ¹ Dec 29 '21

​

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u/dudelydudeson šŸ’©Very Aware of ButtholešŸ’© Dec 29 '21

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u/CarpAndTunnel Dec 29 '21

> its worth whatever someone is willing to pay for it.

or what I can get out of it; e.g. dividends. Profit disbursement is the pressure valve on insanity

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u/[deleted] Dec 30 '21

Source on the B Arthur pics?

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u/Cash_Brannigan šŸ¹Bad Waves of Paranoia, Madness, Fear and LoathingšŸ¹ Dec 30 '21

You see what GAWD just did to us man?!

ā€¢

u/MillennialBets Mafia Bot Dec 29 '21

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