Market Curiosity: Exploring Markets And Systems

December 12, 2010

I was incorrect to assume stocks would lose purchasing power in a hyperinflation

Filed under: Just Watching — Tags: — Jeff Fitzmyers @ 5:33 am

After skimming 10 Reasons To Shun Stocks…, from a contrarian point of view I would want to be super long stocks. Many of the numbers cited don’t necessarily mean anything one way or another to the main thesis: A crooked Wall Street is not news. Company insiders tend to profit more than outsiders — of course — they know more about the company than anyone else. Thus there are systems to shadow insiders. Asserting the market “will lose another 20% of your money by 2020” so you should be out seems to be unfounded speculation.

And the unfounded speculation was although the average participant would likely not keep up their purchasing power, they might do better than just cash in a bank. Apparently incorrect:

John Paul Koning wrote

The Zimbabwe Stock Exchange (the ZSE) is the best performing stock exchange in the world [2007], the key Zimbabwe Industrials Index up some 595% since the beginning of the year and 12,000% over twelve months. This jump in share prices is far in excess of increases in consumer prices. While the country is crumbling, the Zimbabwean share speculator is keeping up much better than the typical Zimbabwean on the street.

Update 1, February 8 2013:
+ Venezuela Launches First Nuke In Currency Wars, Devalues Currency By 46%

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