Ask Ray Dalio Answer

by finandlife21/09/2018 09:07

RAY DALIO

I received a lot of great questions over the weekend and I wanted to share some of my answers with you here, with more to come in the following days.

QUESTION:

What’s your view on countries with low public debt but high private debt (i.e. consumers in debt but not the government)?

ANSWER:

Countries with low public debt and high private debt quickly become countries with high public debt when bubbles burst because governments typically take on debt to help save the private sector.

QUESTION:

You say the current situation looks like 1935. What different dynamics can we expect due to pension funds and a dollar which is not linked to anything like gold anymore?

ANSWER:

I would expect much more central bank printing of money and pushing money directly into people’s hands to do MP3 (as distinct from just buying bonds).

QUESTION:

After reading the first 64 pages of your template, I have a question. Between debts denominated in foreign currencies and one's own currency debts, which to choose for avoiding debts crisis and also have economic growth?

ANSWER:

Don’t have debt in foreign currency because you won’t be able to print the money to help service it and it will be more difficult to restructure on favorable terms.

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Some more answers to your questions that were submitted over the weekend.

QUESTION:

In which stage do you consider the major economies to be in the current situation? Do you see a debt crisis coming soon?

ANSWER:

By my measures, all the major developed countries are a) late in their long term debt cycles (because debt and non-debt obligations like pensions and health care obligations are very high, at the same time monetary easing will be less effective because interest rates are near 0pct and quantitative easing is less effective) and b) 60-80 percent through their short term debt cycles. Japan is closest to pushing on a string, Europe is between pushing on a string and normalization and the U.S. is closer to normalization. The next big debt crisis, which probably won’t happen for a couple of years, will likely quickly move them all toward pushing on a string.

QUESTION:

How would you consider Italy's debt load? I would consider it as "foreign-denominated" which leaves the country vulnerable to an inflationary type of depression.

ANSWER:

Italy won’t have an inflationary spiral as long as it remains in the Union because it can’t print money. Think of Italy like being a state in the US - let’s say Texas during an oil bust or like Greece in the EU.

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If you're interested, here's some more questions and answers from this past weekend's posts.

QUESTION:

Is there room for higher public spending and tax cuts around the world to stimulate the economy in a future recession?

ANSWER:

Yes, fiscal stimulation coupled with monetization of the debt is the logical next move as long as the foreign demand for our currency remains a strong reserve currency. Political fragmentation that stands in the way of good policies and foreign investors losing confidence in the dollar because of unsound policies are the two biggest risks in the next downturn.

QUESTION:

Between debts denominated in foreign currencies and one's own currency debts, which to choose for avoiding debts crisis and also have economic growth?

ANSWER:

Don’t have debt in foreign currency because you won’t be able to print the money to help service it and it will be more difficult to restructure on favorable terms.

QUESTION:

Did you release this book because you see one coming around the corner?

ANSWER:

No. I released it because it was the 10th anniversary of the debt crisis and I thought people would be more interested in the subject matter and because I now want to pass along the principles that helped me.

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25.9.18

 

For those interested, here's another question and answer from last weekend's posts.

 

QUESTION:

 

Can an aggressive decentralization strategy for goods and infrastructure affect the future outcomes of this next debt crisis? Can we efficiently leverage the projected autonomous manufacturing, vertical farming, and increased global battery storage quickly enough to provide less of a hurt for the masses?

 

ANSWER:

 

The problem is mostly a distribution problem. The productivity gains coming from new technologies (especially AI) will be great. Even now there are adequate resources to produce what is needed by most everyone. We need better distribution of opportunities and productivity. Our big long term economic problem is that there are too many promises that can’t be kept and at the same time as there is a narrowing of opportunities to be productive (as technologies out-compete people) so the economy is becoming very effective in providing an abundance of opportunity, income and items to satisfy a relatively small percentage of the population. That imbalance is a big issue that should be addressed and probably won’t be. My worry is about what the next downturn will be like when it inevitably comes along with this polarity and with the reduced ability of monetary policy.

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QUESTION:

Good summation of the recent deterioration in US-China relations, but what do you suggest we do?

ANSWER:

My intent is not to comment on what policy is best as much as to convey to you what is the case so that you are aware of it and can manage it well. Our discussion on what policy is best probably won’t have any effect on what happens and the most important thing to control is how you take care of yourself. Having said that, I will answer your question about what policy would be best in my opinion. Think of the two ways of negotiating: 1) the war path (which is to find ways of hurting each other until one party gives up), and 2) the tough negotiation path (which is to exchange things that are very important to the other and to find a non-hurtful way of resolving those matters that one can’t agree on). I prefer the second path because wars have a way of slipping beyond anyone’s control and are so horrendous that almost all who chose this path regretted it. I don’t know where this is headed. Perhaps this gets better after the midterm elections and after Xi and Trump meet at the G20, however, I do think that what has happened has irreversibly changed the parties’ assessments of the risks of war and how they will behave with each other.

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QUESTION:

Just how concerned should we be about this? (In reference to 'The "War" with China is Spreading' article)

ANSWER:

 

There is a wide range of possibilities (depending on how both sides handle the situation I described) so I don’t want to say that we are definitely headed to trouble, but I would say that we should be very concerned. If you have the time, I recommend that you study the 1937-45 period in detail; and then if you have the time, study the 1913-25 period in detail. Perhaps I will write up descriptions of those periods and the patterns through time and how the circumstances compare with those today. I think we should savor peace and realize how much better the world would be if we struggle well rather than fight. China and the U.S. could make the world so much better if they compete well with each other rather than have wars of any sort.

Tags: ,

Economics

7 Facts That Will Free You From the Fear of Stock Market Crashes

by finandlife18/09/2018 09:40

Unshakeable: không lay động

Thrived throughout history: phát triển/thịnh vượng xuyên suốt lịch sử

Discerning /di’se:ning/ nhận thức rõ

Abundance: sự phong phú

Indisputable /,indis’pju:tebl/ không cần bàn cãi

Enormous edge over even many sophisticated (thạo đời, tinh vi) and experienced investors: góc cạnh phong phú vượt qua cả những nhà đầu tư kinh nghiệm và thạo đời

1. Trung bình, điều chỉnh xẩy ra một lần/năm

<20%

Những lần điều chỉnh như những ngày sinh nhật trong suốt cuộc đời mỗi con người

Thông thường, đợt điều chỉnh kéo dài 54 ngày/năm, giảm 13.5%

Prompt: xúi giục, lôi kéo

2. Ít hơn 20% khả năng đợt điều chỉnh biến thành bear market

Tempt = prompt

3. Không ai có thể dự báo chính xác thị trường lên hay xuống

Perpetuate: đóng đinh ý tưởng

The media perpetuates a myth that, if you are smart enough, you can predict the market’s moves and avoid its downdrafts.

But the reality is: no one can time the market

Giá trị duy nhất của những nhà dự báo chứng khoán là tạo ra những nhà thầy bối trông có vẻ xịn.

4. Thị trường luôn tăng, bất chấp những đợt hãm ngắn hạn

Potholes: ổ gà

Even though we hit a huge number of potholes along the way

5. Lịch sử cho thấy, bear markets đã diễn ra mỗi 3 đến 5 năm

6. Bear markets trở thành bull markets

Thị trường chứng khoán là một thiết bị chuyển tiền từ người thiếu kiên nhẫn sang người kiên nhẫn

7. Nguy hiểm lớn nhất là ra khỏi thị trường

Fear <> courage: can đảm

At the nutshell,, nếu bạn đầu tư mỗi năm 2k USD trong vòng 20 năm từ 1993. Nếu bỏ tiền vào thời điểm tốt nhất mỗi năm, bạn sẽ có 87k USD, nếu gửi tiết kiệm, số tiền sẽ là 51k USD, và nếu bạn đầu tư vào thời điểm tệ hại nhất mỗi năm, số tiền sẽ là 72k USD. Như vậy, bài học ở đây là nếu ở lại với thị trường đủ lâu, lãi kép sẽ giúp khoản đầu tư sinh lãi kinh ngạc.

FINANDLIFE

Tags:

Economics | Psychology

Lợi nhuận một số chuỗi thức ăn nhanh tại Việt Nam

by finandlife15/09/2018 19:45

Tags:

Economics

Giá hàng hóa cập nhật đến tháng 9/2018

by finandlife15/09/2018 12:01

Số liệu chi tiết liên hệ topup.customers@gmail.com

Tags:

Economics

Bond Yield bounce back

by finandlife14/09/2018 09:06

Yield gần đây có sự nhích tăng trở lại, nhưng đây chỉ là bounce back trở về vùng hợp lý sau giai đoạn rơi nhanh trước đó. Đừng quá lo lắng.

Các bạn muốn tìm hiểu tác động Bond Yield lên giá CK thì đọc lại bài này.

Chứng khoán sẽ như thế nào khi lãi suất giảm mạnh?

FINANDLIFE

Tags:

Economics

AUTOFEED

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phân tích đầu tư chuyên nghiệp, hơn 12 năm kinh nghiệm phân tích đầu tư tại thị trường Việt Nam. Blog phục vụ cho mục đích lưu trữ, tham khảo thông tin và chia sẻ góc nhìn cá nhân (không đại diện cho tổ chức nơi tác giả đang làm việc). Tác giả không đảm bảo tính chắc chắn và không chịu trách nhiệm khi người sử dụng thông tin từ website cho hoạt động đầu tư, mua bán chứng khoán của mình.

 

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