Don’t Try to Beat the Market

I get upset whenever someone says they are going to “beat the market”. The market isn’t a video game. Outsmarting other people isn’t the goal.

Anyone who approaches the market with the intent of “beating” it has already lost. Sure, it’s possible to gain money on the stock market, and it is also possible to get more money than the next guy in the stock market. The same thing is true of gambling. Unless you view the market as merely a high-class casino, “beating the market” is one of the worst analogies.

If everyone lost all of their income, and you only lost half, would you be excited that you “beat the market”? What if you became rich by suckering everyone else out of their money? Is that something to be proud of? No, and those are two of the reasons why “beating the market” is a ridiculous goal.

The goal of investment in a market is to build value, period. If your goal is something else, you should get out, because you are not only likely to lose your shirt, you are likely to hurt others in the process.

The market is not a list of numbers, it is a list of companies. Buying a stock is not betting on a horse, it is investing in what a company does on a daily basis. The goal of an investment is to either (a) help capitalize an operation that you believe has future potential, or (b) provide early compensation for others who capitalized the operation earlier by purchasing for a fixed price a future revenue stream. If your goal is to just hang on until you find someone stupider than yourself to sell it to, then you are doing it wrong.

Now, by this notion, it might be that there are *no* companies worth investing in. That’s certainly a possibility. What then? I can see two clear choices: either (a) save your money (that’s what cash and precious metals are for), or (b) start your own company or help out someone who is not listed start theirs.

Your money has so much better uses than just to gamble it away. Instead, find a productive way to invest your money.

Our current economic debacle comes from having so many people focused on “playing the market” rather than actually creating value. Therefore, the gains are all fake. Because so many people “play the market” or “provide liquidity”, no one is “providing value”. This is what causes a market crash. Eventually, the market returns to the value. If no one is producing, then there is no value.

If value is being created, the actual numbers behind your wealth are much less important. Real capitalization is deflationary. Imagine this – let’s say you go to the store and buy 100 apples for $2 each. You now have $200 worth of apples, and you eat them all year. Now let’s say you buy an apple tree. Now you can, from now on, have $200 worth of apples without spending money. You might even wind up with enough to sell (which will lower the market price), or have such an abundance you give them away just to keep from having to clean them up!

All of these operations lower the value of your 100 apples. But do you care? Wouldn’t you rather have food in such abundance that you had to give it away rather than have to spend $200 each year? But for those who keep score with dollar signs, who want to do “better than you” rather than “well”, they would rather have apples become scarce, and their $200 worth of apples become worth $600. They would plow up an entire forest of apple trees to make their apples worth more. When they are starving in the street because they killed their own source of food, they will say, “I won – my assets are worth more dollars than anyone else’s”.

Which person in these stories was actually wealthier? The one with dollars, or the one with actual productive capital assets?

If you think you can successfully invest in the market, and in doing so improve the market itself, by all means be my guest. But if you want to play the market or beat the market, then for the good of yourself and others, please don’t.

About The Supreme Court Rulings…

Two supreme court rulings which had the same exact content: words don’t matter, the democratic process is meaningless, and the only thing that matters is how connected you are to the political power structure. As an added bonus, it seems that America is now at war with reality. But that’s okay, because the US fed has been gradually implementing that same reality denialism with our money for the past decade, so we are well-practiced.

MicroSecession: Buy Direct

Some people have expressed that they do not wish to do business with Amazon, which especially seems reasonable with the concept of MicroSecession. Therefore, if you wish to order direct, you can use the button below to purchase:

Why I Homeschool

I am supposed to give a talk tomorrow on why I homeschool, and it is supposed to be under 3 minutes. Here is my planned talk:

My name is Jonathan Bartlett, and I am a homeschooling Dad. In Oklahoma, the homeschooling movement is growing by leaps and bounds, but some people on the outside are curious about what motivates us. Therefore, I thought it might be helpful for me to take a moment and share a bit why our family does homeschooling, and I think many of these reasons are shared by a large number of homeschooling families.

To begin with, I should say that I graduated from Union Public Schools, and at the time it was one of the best schools in the region, and probably still is. I had great teachers and great classmates. However, after graduating, I started to realize that there were problems with my education. These were structural problems – problems that are innate to the very way that public schooling is organized.

First of all, my own first goal with education is teaching my children the family’s values and morals. I hold this goal much higher than the intellectual education itself. However, as a public institution, schools are not permitted to instill deep values in the pupils. They can instill some surface ones, like don’t cheat and don’t steal, but they are systematically incapable of shaping students to the values of the families they belong to.

Along the same lines, each subject is missing many important aspects because of the need for being secular. Philosophy, morality, aesthetics, human nature, and the design inherent in nature are integral parts of EVERY subject, but are systematically left out of a secularized education. The lesson to children is implicit but quite clear – nothing except the material aspects of subjects are really worth knowing.

Another issue is with family and community. Public schools minimize the importance of both the family and community. After taking the bus, spending time at school, and staying after school for sports, your family becomes just a group of people you happen to eat dinner with. Homeschooling, instead, puts family membership at the center of children’s lives. It also exposes children to more people outside their own age group – younger kids, older kids, the elderly, professionals, and homemakers. It puts them in the center of a much wider community than is available in an age-segregated school, to allow them to see and experience the wide variety of gifts and needs that different members of the community have.

A final issue is that I think that all of our children deserve special attention. The fact is, in any class, there will be kids who make trouble. The only option that teachers really have is to minimize the damage that these kids do. But is that the best option for those kids? When homeschooling, parents can know the problems that their children are causing and actively work to solve them without worrying how that impacts twenty other students.

Thankfully, Oklahoma is the best place on earth to homeschool, both from a legal and social perspective. There are a number of co-ops, support groups, and organizations to help you get started and stand with you in troubled times. Our family takes part in organizations like Classical Conversations, AmbleCommunity, and OCHEC, and these are just a tiny fraction of the groups available to help you connect with other families who have the same issues you do. We are all families working to make our kids productive parts of the community. That means something different for everyone, which is another benefit of homeschooling – you have the freedom to do what works for your family.

Why I am Very Proud to be an Oklahoman Today

Many of you have probably heard about the recent issue of racial chants at the University of Oklahoma SAE fraternity.

I’m from Oklahoma, and many of my fellow Oklahomans are droning on and on about how embarrassed they are to be an Oklahoman, and how this is such an embarrassment to Oklahoma, and how we should feel bad about being Oklahoman because of this incident.

Frankly, I can’t possibly understand this sentiment.

Here’s the deal. Everywhere on planet Earth there are stupid, bigoted people. It is clear that if they have a full chant, the OU SAE is probably not the only SAE chapter to be racist. However, it is only in Oklahoma where (a) a member of the student body had the fortitude to expose their behavior, and (b) the president of the University bothered to do anything about it.

In addition, the way in which it was handled was fabulous. They shut down the fraternity immediately. This made the clear message that this was simply incompatible with the University. Second, they did not (to my knowledge) punish the students. First, students should be allowed to hold ridiculous opinions without retribution. However, the University should not endorse organizations that are clearly anti-social, and, fraternities are such endorsed organizations. Second, clearly, the students are in desperate need of an education.

So, in short, there are ignorant people and organizations in every University, and SAE chapters dotted across the United States, but only in Oklahoma was something done about it.

Now let’s compare this with another state, say, Illinois. In Illinois, they are openly promoting segregation by the state-sponsored schools and nothing is being done about it.

Yep, I’m proud of Oklahoma. You should be too.

If you aren’t proud of Oklahoma today, I’m not sure what you are smoking.