51 STASHED IDEAS
... are investment vehicles which aims to hedge (aka minimize or eliminate) market risk. Some differences from traditional funds:
Hedge funds have a bad rap for their unorthodox methods, but help keep prices in check for whole markets.
You are paid in proportion to the perceived value of your work. Not based on how hard you work: A handyman may work hard, but his work is easily replaceable so he will make less money than a lazy accountant.
The most valuable employees are the ones working on the biggest problems. The richest people are those who solve a problem for billions.
If you want money, stop chasing money. Look for big problems and come up with solutions. The market will reward you generously.
We have grown up to see money as the tool of evil for corrupt individuals. However, more than 60% of millionaires are self-made. They started from 0 and built their empires one brick at a time.
This includes people like:
They worked hard, on problems that affected millions. And they came up with solutions that scale.
Money is just a belief. A number on a screen. What we want is the feeling of freedom: The ability to do what we want, when we want it, without having to think if we afford it or not.
1933 - President Franklin D. Roosevelt had gold confiscated and people were forced to accept paper money for their gold. The government needed people to adopt the inflated paper and they used force.
1940s - Bretton Woods Agreement created a collective international currency peg to the U.S. dollar which was in turn pegged to the price of gold.
1971 - President Nixon unilaterally cancelled the direct international convertibility of the US dollars to gold. Making the US government in charge of money supply and world money master.
Banks loan money they don't have. Most hold a limited reserve to serve the few who decide to make redraws. When the majority decides to liquidate their bank accounts we have what is called a bank run.
In order to protect the banks, central banks were created to provide a guaranteed reserve for commercial banks. But once the government stepped in to protect the banks the fractional reserve mandates(only a fraction of deposits are backed by actual cash) began to be used to make up the money from thin air. Every dollar that a bank holds can be multiplied by at least 10x.
Fiat money is a government-issued currency that is not backed by a commodity such as gold. Most paper notes started as being backed by a reserve of valuable commodities, usually gold (the "Gold Standard"). Tying a currency to gold limits inflation and money supply.
But politicians hate the gold standard, so since Nixon's presidency, the US dollar was no longer tied to gold and money had value just because the government says so.
We print money digitally. As a central bank, we have the ability to create money. And we do that by buying bonds for other government guaranteed securities. And that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.
We can measure the supply of money that exists in the market with main metrics:
As the chart shows the US (and all other countries with central banks) have most of the monetary mass made up. An influx of money causes inflation and this is exactly what during the last decades.
Small critique: Fiskar's four types all have masculine titles. Obviously, people can be a part of the workforce regardless of gender.
The Buffett Indicator is the ratio of total the United States stock market valuation to GDP. It is said to be the best predictor of market corrections or crashes.
As of May 6, 2021:
Historically, when the stock market went above GDP by 50-100% it crashed, going below GDP. 2021 is the year in the last 100 years when the ratio was over 2x the largest stock market in history.
In 2021, Elon Musk asked Cathie Wood, the famous tech-focused investor from Ark investments, what is her explanation for the high Buffet indicator (a ratio of US stock market/GDP). Cathie suggests a few reasons: