Interesting Links for 21-04-2025

[andrewducker]

1. The Scandal of Financial Nihilism

(tags:life money philosophy )

2. As unions decline, inequality rises

(tags:unions inequality )

3. Happy Easter! 'Chris is Risen'!

(tags:spelling fail easter UK religion Christianity )

4. 'Biological reality': What genetics has taught us about race

(tags:race racism genetics history politics USA )

Comments

Re: 1.

[andrewducker]

I assume that annuity rates aren't going to cut it?

Re: 1.

[channelpenguin]

Pensions companies are very restricted in what they are allowed to invest in, this was tightened up in .... The early aughts, if I recall right. They can't do very much that very "risky". As you know, that's where the money is (if you're lucky!)

Also, the longer you live, the more funds you need. Though life insurance and pensions companies will catch what downwards adjustments in expected lifespan are coming in future (are in fact already here...)

In general, markets are a gamble. Blah, blah index funds say you - 20 odd years ago I was also of that mind, but entry and exit points (i.e. "retirement") DO MATTER. It's easy enough to run a few sims and find more than a few bad patches.

I can't see markets over the long long term being able to keep going up up up. Capitalism is extractive and will have an end point. Along the way the bumps could be extreme, and since absolutely everything has been hugely overvalued for decades, the downside of those bumps is perhaps not too far ahead (or price has been utterly divorced from any form of connection to value, rather to hype and sometimes cults of personality). The "professionals", when they actually have any talent that isn't blind luck, generally have their time then burn out or just lose their touch as markets change. There are in any case SO many many opportunities NOT available to anyone without many many millions to invest.

My cynicism over "the pros" comes from working for them. Actual traders are unpleasant people in every possible way (quants are fine, but remind me of eccentric priests). We (as in the IT geeks) once put the prices for a variety of things over time from a random simulation in front of traders as if it were real (without telling them). They had "logical" stories tied to real world events at the times to "explain" the price movements. And utter confidence in that. They never knew. So from then on I was convinced it's all bullshit really.

"Technical Analysis" - or as I call it "Gossip Driven Trading" (as I understand and have observed it) relies on the idea that you can predict price patterns by treating them purely by what EVERYONE else might be doing, by catching market sentiment driven movements - divorced from any connection to product or its actual use or value. And getting in nearish the lows and out nearish the highs. It "works" because, and only as long as, so many people believe in it...

Re: 1.

[andrewducker]

Oh yes, active investing is really hard.

But I more meant that buying an annuity would then move the risk to the finance company, who would then be able to spread the risk across everyone.

Re: 1.

[channelpenguin]

That was kind of my point right at the top of my rant. Pension companies aren't allowed to make "risky" investments. So returns are low. It doesn't take much inflation to wipe out. And even "non-risky" investments may be (or may become) unreliable. Not hard right now to imagine government bonds of certain governments being less trusted and therefore less reliable.

But your pension annual statements over the past 20 years are already telling you all this, no?

Re: 1.

[andrewducker]

Mine was up 80% in the last 5 years, until Trump knocked it back down a chunk. So some risk is clearly allowed.

https://documents.feprecisionplus.com/Factsheet/SL/FS/ZQ30_en-GB.pdf

Not bitcoin amounts, obviously. But could be a lot worse!

There are also index-linked annuities. Although it looks like you'll get about 5% on those rather than the 7% you'd get on a straightforward one. But that's risk-hedging for you.

https://www.hl.co.uk/retirement/annuities/best-buy-rates