Posted on 01/08/2024 9:27:35 PM PST by SeekAndFind
It is a true shame that the WSJ contributes so much to the economic illiteracy plaguing the media and the American people.
This article, by Sam Goldfarb at The Wall Street Journal, talks about stock market investors and their “hope” that 2024 is a “return to long-lost normalcy.” Yet Goldfarb says investors can’t hope for a repeat of the 24% gain in 2023, which essentially “erased” the 2022 losses—but this is completely misleading. If you lose 24% in one year, you have to make a much higher return in the following year to make up for that loss.
For example: In 2022, the average investor started with $144,280 and at the end of the year they were down to $111,210—they lost 23%, or $33,070. To get back the $33,070 with the starting balance of $111,210 you would need to earn almost 30%, not just the 23%.
An easier example would be if you started with a $100,000 balance and lost 50%, you would be down to $50,000; to get back to the $100,000, you would have to earn 100%.
It is a shame that the WSJ, the government, and brokers act like they restore lost dollars when they categorically do not.
It is no wonder the country is so broke when there is so much economic illiteracy out there, including within the community of supposed-experts.
It is the same reason we get politicians like Biden claiming prices are dropping, when all that is decreasing is the rate of price increase; prices are still rising.
(Excerpt) Read more at americanthinker.com ...
Another misleading piece of information we see is that if wages are rising 4%, and inflation is rising 3.5%, then they say that wages are rising faster than inflation. The problem is that those are gross wages, and people don’t take home gross wages; they take home net wages, which is typically 70% of gross wages. Therefore, a 4% raise only yields 2.8% in increased purchasing power. That is why people can’t cover their bills, and why they are not enamored by Bidenomics.
Basically, it is very easy to manipulate statistics, and once agian, the WSJ reaffirmed its status as a repeat offender.
| Previous Loss | Required Return to Break Even |
|---|---|
| 10% | 11.11% |
| 20% | 25.00% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100.00% |
| 60% | 150.00% |
| 70% | 233.33% |
| 80% | 400.00% |
| 90% | 900.00% |
| 100% | N/A (cannot recover) |
Their net wages still go up 4% if their gross wages went up 4%, because whatever payroll taxes they are paying they paid at the same rate before also.
Let’s say their gross wage was 1000 before, and the payroll taxes is 20%. Their net wages is therefore 800. If their gross wages go up 4%, their new gross wage is 1040, 20% payroll taxes is 208, so their new net wag is 832, which is exactly 4% more than 800 before.
It is All about protecting the Democrats in the USA. The Media can do the math, but when facts don’t match up to their politics, they lie.
Most people are too stupid or busy to check out the BS the Democrat “Deep state” machine pumps out.
Thus we have a piss poor economy and when they tell the Mob it is raining as they piss on them, the Mob believes it.
While that may apply to most small investors (and Warren Buffett), I’d suggest that the WSJ is aimed at a reader base that includes many active traders and equity fund managers who constantly move money between various asset classes. These folks often capture gains during “up” years for the stock market, and end up sitting in a cash position waiting for “down” years to give them opportunities to invest at lower prices.
As a buy and hold retiree, I can tell you that I haven’t come close to recovering the 30% I lost during the Biden smears, not counting the loss from inflation. My wife subscribes to the WSJ. She thinks it makes her informed. She doesn’t like it when I tell her that it makes her stupid. Don’t get me started on GMA.
But the last three years before 2022 all racked up significant gains:
2021 26.89%
2020 16.26%
2019 28.88%
So the hand-wringing hangover for 2022 is a bit silly. We are still in the midst of an “everything bubble” wrought by the inflation from massive government deficit spending.
The biggest lie of all is the one saves money by buying something at a reduced price.
If you buy a $10 item “on sale” for $5, you haven’t saved $5, you’ve spent $5.
As the saying goes, “Lies, damned lies, statistics.”
As far as Bidenomics goes....it’s all based on outright lies.
“”The biggest lie of all is the one saves money by buying something at a reduced price.
If you buy a $10 item “on sale” for $5, you haven’t saved $5, you’ve spent $5.””
Ah, yes. The ol’ “the more you spend, the more you’ll save“ insanity. I can see a late night commercial soon, stating a buy one - get one free for EVs.
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