Two thins the post made me thing of (but not yet very much about).
AI (I think at least) can safely be viewed as improving productivity in a lot of things. That where the value comes from but beg the question of just who actually captures the value (who gets the economic rents here). I’m not sure that it all goes to the AI company as opposed to the production company using the AIs.
Have you seen any ETFs that seem like good match ups with your portfolio views? If not, would defining and establishing one be at least as good of an idea as that of privately positioning your self? (More work of course but might be a more stable investment strategy.)
I don’t think one can easily unpack the impact from either computers or internet (which I’m honestly not sure really has significantly increased productivity) impacts on aggregate productivity just by looking and a graph. GDP is nominal prices basically so technology changes that might well increase output or increase output quality while also working to lower or hold prices constant will be masked in simple GDP traces.
I think you’d need to look at some older models, perhaps like Solow’s Growth Model, that include a technology term and see how that is moving around. Total productivity seems like it would be driven by labor, capital and technology state. If one assumes human productivity is pretty constant and the installed capital base is likewise pretty set then innovation like computers, internet and AI should show up in the technology component of the model.
Since 1972, the Nasdaq 100 has experienced slightly higher annual returns (10.8%) than the S&P 500 (10.5%), but it has also experienced much higher volatility.
During the bull markets, the Nasdaq 100 has crushed the S&P 500 (the 1990s and the post-2008 market).
However, during bear markets, the S&P 500 has performed much better than the Nasdaq 100 (1973-1974, early 2000s, the 2008 financial crisis).
The Nasdaq 100 beat the S&P 500 in 25 out of these 46 years (54% of years).
Input ^NDX and ^GSPC (Nasdaq-100 and S&P500 respectively) as the input tickers. These are Yahoo Finance’s codes for those respective indices. Alternatively, you can input QQQ and SPY, which are ETFs that track those indices but there will be less historical data since ETFs come after indices.
Two thins the post made me thing of (but not yet very much about).
AI (I think at least) can safely be viewed as improving productivity in a lot of things. That where the value comes from but beg the question of just who actually captures the value (who gets the economic rents here). I’m not sure that it all goes to the AI company as opposed to the production company using the AIs.
Have you seen any ETFs that seem like good match ups with your portfolio views? If not, would defining and establishing one be at least as good of an idea as that of privately positioning your self? (More work of course but might be a more stable investment strategy.)
To play devil’s advocate, would you have said the same thing about computers and the internet (improving productivity in a lot of things)? If so, would you expect it to impact GDP? Because it’s not clear that it did. https://fred.stlouisfed.org/graph/fredgraph.png?width=880&height=440&id=RTFPNAUSA632NRUG
I don’t think one can easily unpack the impact from either computers or internet (which I’m honestly not sure really has significantly increased productivity) impacts on aggregate productivity just by looking and a graph. GDP is nominal prices basically so technology changes that might well increase output or increase output quality while also working to lower or hold prices constant will be masked in simple GDP traces.
I think you’d need to look at some older models, perhaps like Solow’s Growth Model, that include a technology term and see how that is moving around. Total productivity seems like it would be driven by labor, capital and technology state. If one assumes human productivity is pretty constant and the installed capital base is likewise pretty set then innovation like computers, internet and AI should show up in the technology component of the model.
Independent of effects on GDP, the internet (nasdaq100) has still strongly outperformed the overall US stock market (sp500).
I would call it a tie:
Since 1972, the Nasdaq 100 has experienced slightly higher annual returns (10.8%) than the S&P 500 (10.5%), but it has also experienced much higher volatility.
During the bull markets, the Nasdaq 100 has crushed the S&P 500 (the 1990s and the post-2008 market).
However, during bear markets, the S&P 500 has performed much better than the Nasdaq 100 (1973-1974, early 2000s, the 2008 financial crisis).
The Nasdaq 100 beat the S&P 500 in 25 out of these 46 years (54% of years).
The wiki page says the Nasdaq-100 started in 1985? Where are you getting your 1972 data from?
Coincidentally, I made an app to do exactly these types of historical comparisons of returns, with much greater fidelity.
Input ^NDX and ^GSPC (Nasdaq-100 and S&P500 respectively) as the input tickers. These are Yahoo Finance’s codes for those respective indices. Alternatively, you can input QQQ and SPY, which are ETFs that track those indices but there will be less historical data since ETFs come after indices.