Stock market news for long term stock market investors. There is so much daily news noise in the investment world that it can drive a normal person crazy. From today’s Trump tweets, Brexit issues, government shutdowns etc. However, the forces driving the economy, business, are pretty clear and no matter what, you can know what will happen in 2050. If it doesn’t, then your investments will be the last things to worry about. Enjoy the news about the economy, inflation, demographics, how to invest for the long term, how Buffett is investing and my strategy.
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Stock Market News – Long Term Investing Is Your True Advantage
Q3 hedge fund letters, conference, scoops etc
Transcript
Good their fellow investors and welcome to the stock market news that really matter for your investing. Earnings season is starting to the Brexit the wall the shutdown doesn't really matter. Today I'm going to discuss really news or old news. But that is crucial for everyone's investing. Let's start the world population is about seven point six billion. Right now the population will reach nine point eight billion in 40 years in 2050. So that growth of two point forty eight billion is about 29 percent of the population. If there is 29 percent more people you can expect also more business also globally. Further on GDP the economy the GDP is expected to grow at three point six percent per year according to the International Monetary Fund. If I just take 3 percent for in a negative case scenario then the current GDP gross domestic product per human on the globe should grow from ten thousand seven hundred U.S. dollars in 2017 to twenty five thousand in 2050. That's a2.5 times increase. However we must not forget that there is always inflation because the GDP increase is measured in real terms that's adjusted for inflation. And if we look at inflation in our human history that spans what a thousand years.
There has never been a currency that has held its value. So you can expect and it's constantly being done through inflation all the various of our currencies do decline over time. If you go back 40 years what was then one dollar now is two because you need two dollars now to buy what you could buy for one dollar back in nineteen eighty nine. So this means that added the increasing demand and the increase in growth we will see our demand revenue quintuple over the next 40 years and that's extremely important. If you are investing in businesses and extremely important to keep in mind over the long term however inflation over the last 40 years was very low. And if we take an example of the inflation that was around from the 50s 60s till the 80s then it will not just quintuple because back then the difference was four times one dollar value in 1959 became four dollars in nineteen eighty nine. This means that our GDP per capita could go from the current 10000 to 100000 over the next 40 years. So imagine revenues of the businesses you own your investing expand ten times over the next 20 40 years if it is a great business. It means that probably revenue is going to expense 20 times profitability is going to increase even more and then you're going to see a stock that earns 20 50 100 times more what it earns now.
So if you own now a dividend of 1 percent in 30 years it might be a dividend of 100 percent of what you are paying now and this is long term investing this is what is going on in the world. What we can expect how to invest over the next 40 years there will be more consumers more waste. We need more number of planets more resources and the number of tonnes of resources extracted from earth is going to grow grow grow we will need more food more technologies and we will need more electricity. The number of cars worldwide is set to double by 2040. Let's hope that they will be electrical. So there we have another trend where you have to invest smartly. And I firmly believe that this long term attitude is the biggest advantage we retail investors have because the market the index funds the analysts are all focused on the next quarter on this quarter and on the next few quarters.
And then they are adjusting their models. I'm telling you revenues in general will quintuple or 10x over the next 40 years. You cannot put that in a model. Its models become futile. They think you can focus on is okay what is the investment that will give me a margin of safety that will be there in the next 30 years tomorrow with the outcry we're going to discuss stock Beijing Capital Airport. We know that the airport is going to be there in 40 years which makes it an attractive investment for the long term. However more about that tomorrow so tune in tomorrow. Further you can see OK what can I position myself to be there over for two years and that's why people always talk about competitive advantages durable moats good businesses good management profitable businesses low.
