Re: poly: Re: Why interest rates may stay low

From: Peter C. McCluskey <>
Date: Thu Mar 26 1998 - 09:26:31 PST ("Perry E. Metzger") writes:
>Imagine tomorrow morning someone came up to you, Robin Hanson, and
>asked you to invest your money in something with no way to calculate
>the rate of return, no way to calculate the odds of any particular
>rate of return, and no exit strategy for 150 years.
>You'd tell them to take their prospectus and shove it.
>Perhaps this is so obvious to me that I can't articulate the sort of
>fully academic answer you are looking for. I suspect its obvious to
>other people, too, though.

 Typical Perry, only seeing the questions whose answer is obvious
rather than looking for the important questions.
 My hypothesis implies that rational investors who are familiar with
my argument but can't calculate the probability of many parts of it
being right should respond by reducing their leisure expenses and
invest the money freed up by that in something like land wherever
it's cheapest (Alaska?), at least under Robin's discount rate assumptions.
 They would expect to have ordinary exit opportunities, a slightly
below normal expected return if I'm totally wrong, and a expected
return well above normal if I'm substantially right.

Peter McCluskey  |  | Has anyone used           | to comment on your web pages?
Received on Thu Mar 26 17:30:17 1998

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