X-Message-Number: 12759
From: "John de Rivaz" <>
References: <>
Subject: Re: CryoNet: 12750
Date: Fri, 12 Nov 1999 10:26:53 -0000

> 3. The notion that the markets are "efficient" is laughable and was never
> taken seriously by real investors. In the first place, if markets were
> anywhere near efficient, you could just throw darts and it wouldn't
matter.
> No one can possibly imagine the markets are efficient if he watches them
at
> all. Many stocks jump around like crazy for no good reason, often just a
> reaction to some individual's public comment. This doesn't mean investing
or
> trading is easy, but it does mean markets are inefficient.

I don't think the markets are efficient in the sense that they predict the
future of any given stock accurately. What they are is a system that
allocates new investment in the best possible way known to humanity. That is
not the best possible way in any absolute sense, just the best possible way
known to us at the present time.

The efficiency of the market system has to be judged by its long terms
results, not the day to day running of it. The British economy was run on
the communist model during the second world war and in fact it did quite
well for about four years. Unfortunately this was taken as a sign of success
and the post war Labour government very nearly destroyed it by carrying on
that way afterwards. In reality, the "success" of the centrally controlled
economy was just a blip, and in incorrect assessment of the big picture from
just that blip (for example) cost Britain its radio, television and hi-fi
industries whose trade went to the Japanese. Had a more individualistic
government appeared in the UK after the war, I would probably be looking at
a Bush, Murphy or Ferguson monitor instead of one with "Sony" written on it.

The only useful task the markets perform is the allocation of new
investment. The stock markets can be used to bootstrap a small business into
success. The investors are voting with their currency. Allocation of
investment by a commissar using taxpayer's money does not work as well.
There are also peripheral tasks established markets can perform. A futures
market in any commodity can help with the financial planning of any
business - the cumulative vote of gamblers in these short term markets help
to stabilise the prices of commodities over time. Futures markets in shares
can help to stabilise the share price and hence the company's ability to
raise new money.

It is a reduction in efficiency when stocks jump around because of some
person's comment, but this is only a short term fluctuation. To gauge their
efficiency one needs to look at the long term. Money can be made by gambling
over these short term fluctuations, but if this was the sole way of making
money from the markets, then the odds would be weighted against the punter.
The odds are only in favour of the punter who invests long term.

As cryonicists investing for decades and investing for something that can
only happen with substantial technological growth, the odds are very
definitely in our favour.

--
Sincerely, John de Rivaz
my homepage links to Longevity Report, Fractal Report, my singles club for
people in Cornwall, music, Inventors' report, an autobio and various other
projects:       http://geocities.yahoo.com/longevityrpt


> Subject: CryoNet #12750
> Message #12750
> From: 
> Date: Mon, 8 Nov 1999 22:10:05 EST
> Subject: Investing, Skrecky
>
> Doug Skrecky (#12740) misinterpreted my post, and the suggestions of John
de
> Rivaz, about funding your cryostasis through investments. With the best of
> intentions, he also is mistaken in some of his ideas about the markets and
> his apparent guesses about our people.
>
> 1. No one advocates "gambling on short term fads." Technology is not a
short
> term fad. If you think it is, then forget about cryonics.
>
> 2. Whether prudence demands "diversification" and avoidance of "sector"
> investing is a long story, and depends on definitions and context.
Everyone
> agrees, for example, that in the long term equities beat bonds; yet in
> special situations and for short periods the reverse may be true. Someone
who
> takes "diversification" to extremes will include the kitchen sink and
waste
> most of his opportunities.
>
> 3. The notion that the markets are "efficient" is laughable and was never
> taken seriously by real investors. In the first place, if markets were
> anywhere near efficient, you could just throw darts and it wouldn't
matter.
> No one can possibly imagine the markets are efficient if he watches them
at
> all. Many stocks jump around like crazy for no good reason, often just a
> reaction to some individual's public comment. This doesn't mean investing
or
> trading is easy, but it does mean markets are inefficient.
>
> >There is a strong temptation for some non-professional investors to
> > over-estimate their own stock picking abilities
>
> I don't know if Doug was referring here to CI people or just to
prospective
> novice investors. "Professional" does not necessarily mean "successful" or
> even "competent," but on the CI Board of Directors are two licensed stock
> brokers, as well as other people with extensive investment and trading
> experience. But my post, on which Doug was commenting, and the suggestions
of
> John de Rivaz, did not relate primarily to CI investments, but to the
> prospective private, individual investments of members or prospective
members
> hoping to accumulate money to fund a suspension. Nor did my post relate to
> stock picking (individual equities).
>
> As for Doug's suggestion that we buy the journals he mentioned, I hope he
> will forgive a chuckle. Academics (with the usual exceptions) are
notoriously
> poor in the actual markets. ("Those who can, do; those who can't, teach;
and
> those who can't teach, teach teachers".) One of the biggest fund debacles
> this last year was managed by two Nobel laureate economists!
>
> Once more: John's suggestion was that, to accumulate enough to fund a
> suspension in relatively short order, one could invest periodically in an
> open-end tech fund with a good long term record, or else in a closed-end
tech
> or mostly-tech index fund such as QQQ or XLK. This has worked well for
many
> years (although QQQ and XLK formally are relatively new funds), and shows
> every indication of continuing to do so. And of course you can always make
a
> change if circumstances warrant. (While building your account, use
declining
> term life insurance to cover contingencies.)
>
> As to the actual mechanics of choosing the legal vehicle for pledging the
> funds to your cryonics organization, we will have an extended report
probably
> within the next couple of weeks. (I have already mentioned one or two
options
> currently available, including the CI Revocable Living Trust, which can be
> used in conjunction with a brokerage account; more details will be
> forthcoming.)
>
> Robert Ettinger
> Cryonics Institute
> Immortalist Society
> http://www.cryonics.org
>
> ----------------------------------------------------------------------
>
> End of CryoNet Digest
> *********************
>

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