[extropy-chat] 'a process of non-thinking called faith' 2 (2)

[Rafal Smigrodzki]

On 11/26/06, Eugen Leitl <eugen at leitl.org> wrote:

>
> If you're doing what the press says, and what the bulk of investors
> does, you'll lose long-term. Whomever you listen to, consider Taleb's
> advice.

### It is quite a common belief among economists that the rate of
productivity growth is the single most important determinant of
economic performance in the long term. Since productivity has been
more or less steadily going up for a couple centuries, the bulk of
investors who position themselves to benefit most closely from rising
productivity have over the long term outperformed most other
investors. This is especially striking in the last few decades, as
productivity started growing even faster than before. Thanks mainly to
productivity gains (which make investment a positive sum game), the
bulk of investors gain rather than lose, which is why there are still
investors around.

Given the expected explosive growth in productivity in the next two to
three decades right up to the singularity, the prudent investor should
do what the bulk of investors do - buy index funds, especially the
ones tied to countries and branches with the highest expected
productivity growth.

Rafal