Investing for Collapse

Ask your investment, budget, and other money related questions here
classical_Liberal
Posts: 2169
Joined: Sun Mar 20, 2016 6:05 am

Re: Investing for Collapse

Post by classical_Liberal »

Author of A Random Walk Down Wall Street, Burton Malkiel interviewed by market watch today. He echoed some of @shemps posted concerns. He still advocates passive investing, but thinks bonds are probably a bad idea at current yields and urges investors to be on the lookout for inflation. He thinks long term average equity returns will be about halved thanks to Fed intervention, but believes they did the right thing.

And is there a possibility with this massive amount of liquidity swishing around the world that our long period of benign inflation or even deflationary tendencies, like in Japan, whether that might be over.... I think it’s certainly possible that we will get some inflationary pressures, certainly not in 2020 or 2021 and probably not in 2022, but I am not one who would argue we never have to argue about inflation again, it’s dead forever.
We probably are in a liquidity trap.
Not that you don’t need some safe assets or some income-producing assets, but there may be a better way to get them than through bonds. Basically, safe bonds now do not provide income and in the long run may have some real risk, because if we do get some inflation in the future, yields will rise and their prices will go down.
Over the long haul, stocks have returned 10% and bonds produced 5% a year. Let’s say that’s the right risk premium. That will mean that if interest rates are zero, stock returns will be 5%. Future returns are going to be much lower.

onewayfamily
Posts: 56
Joined: Mon Jul 24, 2017 9:13 am
Contact:

Re: Investing for Collapse

Post by onewayfamily »

I agree with a lot of what has been said in previous comments and many of the directly investing-related ideas have already come up.

In addition, I think one of the best investments you can make to hedge against future volatility (of all kinds) is maintaining or acquiring citizenship (or at least residency) in countries that have a strong likelihood of medium-long term stability - acknowledging that this is very hard to predict.

Examples that come to mind are Canada, Australia, Switzerland, perhaps Germany, Austria, the Netherlands and the Scandinavian countries. Some commonalities are (relative) political stability, mineral wealth, small(ish) populations, strong social/welfare safety net including universal healthcare.

In my mind, having guaranteed access to one or more of these countries is the ultimate investment, the ultimate safety net.

nomadscientist
Posts: 401
Joined: Fri Mar 13, 2020 12:54 am

Re: Investing for Collapse

Post by nomadscientist »

onewayfamily wrote:
Fri Jun 26, 2020 10:36 am
In addition, I think one of the best investments you can make to hedge against future volatility (of all kinds) is maintaining or acquiring citizenship (or at least residency) in countries that have a strong likelihood of medium-long term stability - acknowledging that this is very hard to predict.

Examples that come to mind are Canada, Australia, Switzerland, perhaps Germany, Austria, the Netherlands and the Scandinavian countries. Some commonalities are (relative) political stability, mineral wealth, small(ish) populations, strong social/welfare safety net including universal healthcare.
I agree with the concept, but I see all those countries (except perhaps Australia) as 1. strongly correlated and 2. dependants. Essentially they're all bets on the continuing American hegemony and specifically the American hegemony continuing to shield defenceless, wealthy small countries for free. I would prefer to see:

1. US citizenship (current hegemon)

2. neutral US-aligned citizenship (bet on continuing US hegemony but with the option to not personally fight for it, e.g. Iceland, Sweden, Switzerland)

3. East Asian country (most likely new hegemon/its satellites - maybe Australia counts)

4. wild card neutrals (Russia, Iran, Israel)

If you already have 1. or 2., getting the other is the lowest priority.

Of course engineering this is another question. If you are already Swedish it's probably easier to get Canadian passport than Japanese, and trivial to get Austrian.

zbigi
Posts: 126
Joined: Fri Oct 30, 2020 2:04 pm

Re: Investing for Collapse

Post by zbigi »

7Wannabe5 wrote:
Tue Jun 23, 2020 9:22 am
The old lady who provides meat rabbits and eggs to the reigning local militia/gang does not necessarily need her own weapons. Gold they will snatch, but meat rabbits they will need somebody to tend to.
"Provide" in this case means "is a target for periodic robbery". My grandma was in this situation during WWII - partisans of various denominations were coming to her house at night and taking her food. She always managed to convince them to at least leave some for her and her children. Ultimately she survived, but her situation was basically tragic. Preemptive emigration would be a much better solution.

WFJ
Posts: 127
Joined: Sat Apr 24, 2021 11:32 am

Re: Investing for Collapse

Post by WFJ »

I was told this story when I was a very young man, but it stuck with me. "What does every single generation in human history have in common? A significant portion of the population believed they would be the last to survive". Same thing today and probably in the future.

When one is betting/investing on a collapse it is like placing your chips on green 000000000000000000000000000001 roulette wheel with all other outcomes being some measure of progress. You might be correct, but another saying I've heard is "If the system collapses, will you really care if you can dip your cockroaches into Grey Puopon or not?" If the system collapses, your investments in anything but access to clean water and your ability to protect access to clean water will be worthless.

If you are under 50 and don't know people from collapsed countries (Argentina, many in Eastern Europe, Cambodia, El Salvador today) you lack the experience to make this estimation and are destroying your life or creating excuses for not forging your own path in society.

User avatar
Sclass
Posts: 2288
Joined: Tue Jul 10, 2012 5:15 pm
Location: Orange County, CA

Re: Investing for Collapse

Post by Sclass »

WFJ wrote:
Sun Oct 03, 2021 8:43 pm
When one is betting/investing on a collapse it is like placing your chips on green 000000000000000000000000000001 roulette wheel with all other outcomes being some measure of progress.
Yes 100% agree. This is mindless. I’m working on making my present secure. I don’t waste my time looking out beyond three quarters. It’s kind of a fantasy just a negative one.

More likely, you’ll lose your source of income unexpectedly. What preparation do you have in place so you don’t get too stressed out?

This kind of fantasy is also expensive. I have acquaintances who messed up their Swiss accounts over the last decade and now have big time headaches and no gains on money they stranded in foreign accounts. Their sneaky bankers have siphoned off any gains because at the end of the day you’re dealing with criminals who deal with criminals. The really unlucky ones have FATCA cases. The overhead was 0% gain since 2000 during the greatest run up in stocks. Idiots. And they slink around Europe trying to access small amounts of the money on the sly. Just effing stupid.

In the meantime I just kept my money in legit accounts domestically and watched the equities grow.

My plan? Skills as GTOO says. Ego style skills. Move to a friendlier place. Mine trash. Live ERE. Survive. I have so many friends who were from families of refugees - religious war, communists, civil war survivors. Focus on what successful refugees have done not so much on the disaster.

Generally speaking the ones who arrived with the biggest bank accounts ended up with less after a few decades. Seriously I know a descendant of an aristocrat living in poverty in San Francisco - her mother arrived there and bought an apartment and they nibble away at their nest egg for years. The nest egg was a curse. I’ll gotten gains from her despotic grandfather. The daughter still lives there. She dressed up in their silly costumes recently at Christmas and posed for a photo like they were some kind of baronesses. :lol: Compare this with my Persian friends who started small businesses in LA after showing up in the 80s penniless.

chenda
Posts: 1946
Joined: Wed Jun 29, 2011 1:17 pm
Location: Nether Wallop

Re: Investing for Collapse

Post by chenda »

Sclass wrote:
Fri Oct 08, 2021 11:08 am
And they slink around Europe trying to access small amounts of the money on the sly. Just effing stupid.
What happened ? :shock:

User avatar
Sclass
Posts: 2288
Joined: Tue Jul 10, 2012 5:15 pm
Location: Orange County, CA

Re: Investing for Collapse

Post by Sclass »

The money has become fugitive funds. Like a wanted criminal ones access to it is limited.

chenda
Posts: 1946
Joined: Wed Jun 29, 2011 1:17 pm
Location: Nether Wallop

Re: Investing for Collapse

Post by chenda »

Sclass wrote:
Fri Oct 08, 2021 3:18 pm
The money has become fugitive funds. Like a wanted criminal ones access to it is limited.
I see...I didn't think that sort of stuff happened anymore

WFJ
Posts: 127
Joined: Sat Apr 24, 2021 11:32 am

Re: Investing for Collapse

Post by WFJ »

Another way to look at the absurdity of preparing for a collapse is using expected value. Assuming there are two states of nature, collapse and no collapse and the probabilities of each state and whether one prepares for collapse or prepares for status quo. Then estimate one's utility in each state of nature.

#1 Collapse and prepare = You survive in some kind of post-apocalyptic world where people are forced to eat bugs and fight to the death for access to clean water. Assuming you have developed the sharp-shooting skills to kill anyone who breaches access to your water supply, you will survive and live in an of grid hut with little to no interaction with other people. Utility = 1000.

#2 Collapse and don't prepare = You die. What little resources your have are useless in this world, you may survive a few weeks, but will die in some confrontation fighting over who gets to eat a cockroach or rat. Utility = 5

#3 No collapse and prepare = You spend your life colleting gas cans, MREs and flint sticks. You spend your time scouting out land that is remote, dangerous and uninhabitable to prepare for some far off collapse. You put all your assets in crypto cold wallets as the collapse of society will make "fiat" currencies useless but make some digital currency more valuable (really???) You live much like a Cro-Magnon in Western Europe 10,000 years ago, a short and brutal life. Your life pre and post collapse is similar and life utility is also the same. Utility = 1000

#3 no collapse and no prepare = You make some contribution to society through labor, use your income from labor to invest in some productive manner and participate in the world capitalist's miracle. Utility varies from 5000 to millions.

When adding probabilities to the above estimates, the no prepare for collapse is always larger in all cases for all individuals, until the probability of collapse is above 50%. If you believe that the probability of collapse is higher today than at any point in human history, you have information that nobody else is privy to and please share this knowledge.

jacob
Site Admin
Posts: 13596
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Re: Investing for Collapse

Post by jacob »

Then play all four outcomes simultaneously. The real question at that level is whether your play is to maximize gains or minimize losses.

WFJ
Posts: 127
Joined: Sat Apr 24, 2021 11:32 am

Re: Investing for Collapse

Post by WFJ »

Only one trial is this poorly designed experiment.

Relative vs absolute value is also a preference to investigate. Wil those who can dip their cockroaches in Grey Poupon feel superior to those lowly individuals who actually have to use mustard on their cockroaches like savages? What is the utility of screaming "I told you so" after firing your last bullet as a horde of unprepared savages descend on your home grown lentils, using your dead body as mulch?

Post Reply