The Equity Premium Puzzle, Intrinsic Growth & Monetary Policy: Special Investor's Edition - Softcover

Shuler, Robert

Softcover

ISBN 10: 1506144659 ISBN 13: 9781506144658

Publisher: CreateSpace Independent Publishing Platform, 2015

Synopsis

The book presents a theory of necessity to adjust money supply to account for productivity if deflation is to be avoided. The monetary agent (central banker) is a market participant who is not profit oriented and can create money at will, and thus not subject to rational investor constraints. The monetary agent's power is similar to or greater than investor power in the market. Businesses leverage low interest rates enforced by the monetary agent to increase their activity, and growth rates, increasing employment to compensate for the reduced labor necessary to create the former level of goods and services. This leveraged difference in returns is the equity premium. Since productivity is a "rate" of production, even a one time increase requires a corresponding permanent increase not in the money supply itself, but in the "rate of increase" of the money supply. Given the steady growth in productivity of the last 100 years, the world economy is now grossly under-stimulated and in danger of precipitous deflation. Both academic models and arguments based on historical events are presented, along with analysis of the meaning of money, investor behavior, and practical techniques for obtaining the equity premium in one's portfolio.

About this title

From the Back Cover:

truly fascinating - N. Mosley, UBS Sr. VP
page turner - B.G. Smith, NASA engineer
amazing sense of humor - C. Wolfe, investor/artist


Why do STOCKS return 4 to 8% more than BONDS?

· Do you believe in Efficient Markets?  Rational Investors?  Then such differences in return rates should not exist.
· Do you believe bonds are much safer than stocks? Individually maybe, but over the long term bonds fluctuate with interest rates and are approximately as risky as index funds, and may default more often, justifying maybe a 1% risk premium at most.
 
Why is the EQUITY PREMIUM important to you?

Would you like to know if an investment strategy reliably returns more profit?  What if all investments returned nearly the same?  If home loans and government bonds had to yield high returns like Apple or Google, what then?  For 28 years economists have tried to explain the equity premium.

 The equity premium is due to intrinsic growth and productivity growth, together with the monetary policy that must inevitably accompany them, and the resulting see-saw between productivity and human value has dogged human progress at least since the dawn of agriculture.  The problem and solution to the puzzle are not only explained in fascinating detail, but a new focus on human value growth is proposed that could end the conflict and produce both balance and progress.  Meanwhile, learn  how to increase your share of the present economy through investing in the equity premium and joining a new class of self-sufficient investors comprising fully 20% of us or more.

From the Book:

"Monetary policy must permanently adapt.  Rather than a question of the sustainability of a new monetary policy regime, we find a question of whether it is wise to discontinue an adaptation to productivity increases and associated deflation."
"Constantly reducing one's share of the pie leads to no pie. Liquidation of working assets is in my view the number 1, 2 and 3 problem of the working classes."

About the Author:

Robert Shuler combines 50 years investing experience with the knack for finding hidden principles of a successful rocket scientist with half a dozen patents and several dozen publications in fields ranging from economics (corporate risk compensation, the equity premium) to physics (inertia & quantum gravity). He lives in Texas with his wife Natasha.

About this edition

• Publisher: CreateSpace Independent Publishing Platform
• Publication date: 2015
• ISBN 10: 1506144659
• ISBN 13: 9781506144658
• Binding: Paperback
• Number of pages: 226