Written by Bryan Lutz, Editor at Dollarcollapse.com:
Every Sunday morning I send out three thoughts.
Sometimes these thoughts are on the economy, life, or hard assets.
If they’re helpful or hopeful to you, that’s great… Sometimes it just comes down to reality. That’s what I’m interested in…
So, here we go.
Here are three Sunday morning thoughts for you:
1. Today is the 143rd Anniversary of Ludwig Von Mises’ Birthday. If you don’t know who Mises is, you should.
Ludwig Von Mises is the author of our #1 Supertext, ‘Human Action’. His writings are vital for the preservation of civilization.
Without the division of labor, we would not have a capitalist society…
Or the inclusive institutions, which make nations, and civilization, flourish.
Mises entered the intellectual scene when Marxism was monopolizing the intellectual and political landscape of the world.
So, he was iconoclastic to say the least.
He pointed out major flaws and inconsistencies in socialism during a time when there were no systematic intellectual opposition to socialism.
Human Action,’ was his defense.
It was a defense of capitalism, and really, civilization.
He showed that everyone operates on their own material self-interest, even the poor, working class.
Then he showed how privately-owned means of production serve the market the best, with the greatest beneficiary being those who buy a factory’s product.
Everyone’s incentive being profit and loss.
Happy Birthday, Mises!
2. The “Lindy Effect” is something every investor should know. It will help you make reduce risk in every area of your portfolio.
The term “Lindy” actually comes from Broadway.
Yes, New York’s Broadway show culture.
The idea was that the longer a show keeps selling tickets, the longer it will stick around.
So, if you want to reduce risk in your portfolio then look at how companies(or assets) have been performing over their long history…
See if they’re “Lindy.”
For example, a company like CAT, which sells construction equipment, has been consistently dishing out(and increasing) their dividends for over 100 years.
But…
If we were to look at a more recent example, say McDonald’s, then we might see the early stages of a “Lindy Effect.”
Look how they have consistently raised their dividend, paying their profits out to shareholders. That’s good business for investors.
Will the McDonald’s show leave Broadway and run cross-country for another several decades?
Dividends say, quite possibly.
3. Just a friendly reminder that 80% of US dollars were printed in the last several years. Does the “Lindy Effect” mean it’s sticking around?
Check out this chart:
Monetary stimulus like that looks healthy to me…
Yet, the fiat USD has been around for almost 75 years.
Lots of smaller, developing countries are buying US debt, AND accepting dollars.
So…
Is the USD an example of the “Lindy Effect”?
How long will it stick around?