where to stick 50k for 10 years

[DesertCat]

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More intuitively and anecdotally, there's giant amounts of capital swishing around chasing return. Astonishing. I watch some of it go by every day. Finding opportunities to generate returns seems to be getting harder all the time. As more and more people pile into things, returns for everyone are dissipated away (scuttlebutt going around now about some hedge funds returning 6% and such). Private equity and managements take firms private. Etc. So now having capital is not enough to generate a return. Your capital needs to be connected to get in. Things that are good, like hot IPOs, seem to go to good customers and those in the know.

This is why I flippantly tossed out there the 'stock-picker's market' thing. In a low return environment, high valuation environment, I think it's easier for individuals to outperform by picking stocks or allocating well.


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The first paragraph contradicts the second paragraph. If we are in a low return environment because there is too much money sloshing around chasing yield, it's the worst possible time to be a stock picker. You have too much competition, competition that is willing to take lower returns than you, and will make the market too efficient for you to beat it. That means index funds are even better solutions for this type of era.

Of course, my daily experience down in nano-cap/micro-cap land tells me it's just as wide open and full of opportunity as ever. But this section of the market has too many structural limitations to ever be that competitive or efficient.

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How do you know I'm not a wall street type? Or 150 IQ?

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You are probably smart, and might even have wall street connections, but I doubt you have time to post here if you are running a billion dollar fund with a team of high IQ rocket scientists using millions of dollars of computers to predict future economy/market sector trends. That's who I was talking about as your "competition". And I doubt even those guys will succeed at predicting large market and economic trends. Macro-economic & big market trend predictions are a game that doesn't appear to ever had a consistent winner (i.e. most "geniuses" appear to be as accurate in their predictions as a stopped clock is at telling time).

And for all the gloom and doom, the U.S. is in much better shape than ever before. Our "enemy" is a tiny group of bumbling religious fanatics who haven't been able to pull of an attack on our soil in years. Our economy is in good shape despite the pricking of two bubbles in the last six years.

Compare that to the late 1970s, where our enemies were a coalition of some of the most powerful countries on earth, all equipped with nuclear weapons that could have incinerated most of our population within minutes. Inflation was raging out of control, unemployment was skyrocketing, income tax rates were at an all time high and energy costs were a much larger proportion of national income.

Of course, the one similarity we share with the late seventies is that we have a moron sitting in the White House.