james22

From a response to the same question in the comments: The numbers you are looking at are a weighted average of current production. Wells from fifteen years ago might have had a break even cost of $100; ones from 10 years ago, $60; 5 years, $20; etc. The tech has improved a lot. Instead of looking at costs for the sector overall, Zeihan is giving the number for brand new wells, because that is the number that is most pertinent for projecting into the future.

It's one thing to sip Galliano on a nice day and watch the girls go by. But it can get cold and damp and the girls put on coats.

Yeah, jinxed it. But look at what bonds have done since then.

If you look back at the annual returns you’ll notice that consumer staples/defensive has only lost money 6 times over the last 40 years; and its worst year was a loss of 14%. It has a comparable risk level to long term treasuries yet an outperformance of 6% per year. https://engineeredportfolio.com/2016/12/17/historical-performance-of-us-equity-sectors/

"It is as if a library burned down."

RIP

I just believe it's hard for investors to wrap our heads around exponential growth and that it might be different this time. And so if we're anywhere near the inflection point, the growth of Tech is underestimated. You're sure it's not?

If that's true, it won't matter how we invest.

So lots up upside with better management then?

I don't believe they are at a "huge disadvantage" - they can buy tech expert advice and they've lived experience with exponential growth. Kurzweil's Law of Accelerating Returns and Second Half of the Chessboard argues the winners will be in Tech. If the 7' Reward is a lot higher, it might be the better bet. And you can't be limited by your Edge - better to be a mediocre professional basketball player than an elite professional beach volleyball player. Reasons (above) to believe a Tech index will outperform. Is valuation your reason to believe it will not? I'm only expecting him to do the same thing he did when he switched from investing in cigar butts to buying wonderful businesses. Actually, the market has since told us valuations were attractive then. I just accept I missed the opportunity.

It'd be easier to accept that if they didn't have $137B in deployable cash. Just seems the question of the day is if one bets on Tech or not, and how. Taking a $1B position in Banks, Insurance and Finance seems only a distraction. Understanding compounding, they should understand the accelerating nature of Tech better than most (if not specific technologies or individual tech companies).

The best argument for the Magnificent Seven's continued dominance is their familiarity with stories like this. Everyone's read The Innovator's Dilemma, etc.

I don't believe they are incompetent. Do you? Investing is won by playing the right game. The money today is in Tech, not cigar butts. How much does it pay to hurdle the two bars and what are the chances of doing so? 1. Returns are what matter, not edge. 2. Your edge is reflected in your decision to buy a Tech index over individual Tech companies or any other other-than-Tech investment. So why didn't they buy when Tech swooned last year? They'd identified the Tech they like (Amazon, Google, etc.), they had the cash, valuations were attractive, and they could have bought in significant size. Not a good reason: Warren Buffett Missed The Opportunity To Invest In Amazon Early, Says 'I Blew It' And Was 'Too Dumb' — Now He Refuses To Invest Today Saying, 'I've Probably Got So Many Psychological Problems With The Fact That I Didn't Do It That It's Very Hard to Do It Now' https://finance.yahoo.com/news/warren-buffett-missed-opportunity-invest-165456527.html

Great example.

That's the thing. If you aren't at 28% Tech like the market, you are really making a bet against it.

I'm actually OK with the weighting, thinking their wealth will likely buy innovation. I would rather the 40% included Google, Meta, and Amazon. But Large Growth (VIGAX) which does, excludes the small tech companies and hoped for "Dell Effect."

In general, bonds add little or no value to the portfolio of ordinary long-term investors https://www.morningstar.com/news/marketwatch/20231122350/dump-your-bonds-this-new-research-says

I'm 20% Vanguard's Tech fund (VITAX). Because I don't know any better.

Thank you Parsad, and this site too.

The issue isn't the issue. The issue is always the revolution.

By prioritizing security and stability – through surveillance, control, and coercion – over economic dynamism, China’s leaders are abandoning some of the policies and principles that underpinned the country’s “economic miracle.” Unless they change course, the entire global economy will suffer. https://www.project-syndicate.org/commentary/china-growth-slowdown-driven-largely-by-policy-under-xi-jinping-by-takatoshi-ito-2023-11

My vote.