Re:The Real Class War
by roenxi on Wednesday November 27, 2019 @06:24AM
(#21647009)
Someone who wants more stuff or anticipates change in the future. Best time to buy an asset is in the latter stages of a long price decline.
Speaking from a mining industry perspective, best time to invest might be after about 3-5 years of price deflation. If you invest in capital when prices rise sharply then you can lose a lot of money; as mining companies generally seem to do discover when there is a bull market :/. I've seen mining companies do a pretty good job of bankrupting themselves by not investing when prices have been dropping for a while then over-'investing' when the price rises.
So, in the real economy, sane people would invest when prices drop. On a sane timeframe. None of this millisecond knee jerk day trading business.
Basically, the argument is that investment depends on anticipated change over some time horizon. If someone has a long time horizon, best time to set up is in a deflationary period. It isn't a general rule but you'd certainly see some canny people getting their hands dirty if they anticipated a shortage of some good or service.
Speaking from a mining industry perspective, best time to invest might be after about 3-5 years of price deflation. If you invest in capital when prices rise sharply then you can lose a lot of money; as mining companies generally seem to do discover when there is a bull market :/. I've seen mining companies do a pretty good job of bankrupting themselves by not investing when prices have been dropping for a while then over-'investing' when the price rises.
So, in the real economy, sane people would invest when prices drop. On a sane timeframe. None of this millisecond knee jerk day trading business.
Basically, the argument is that investment depends on anticipated change over some time horizon. If someone has a long time horizon, best time to set up is in a deflationary period. It isn't a general rule but you'd certainly see some canny people getting their hands dirty if they anticipated a shortage of some good or service.