Thought Experiment for Ultra-Long Term Investments

[espn423 10]

Hi, first time poster here with a very interesting hypothetical that had me thinking.

 

Say that you're an investor with capital to deploy and you're seeking strictly to maximize expected present value return of your principal regardless of when you actually receive your returns. Assume also that you have a very strong conviction that certain macro events will happen in the next 50 years, ranging from likely scenarios (e.g. extreme oil shortages) to uncommon opinions (e.g. emerging country XYZ will become a world superpower).

 

With such a long time frame, how would you invest on the probable outcomes? What about the uncommon opinions?

 

Curious to hear what you guys think, thanks!

[SIUYA 11]

Assume also that you have a very strong conviction that certain macro events will happen in the next 50 years, ranging from likely scenarios (e.g. extreme oil shortages) to uncommon opinions (e.g. emerging country XYZ will become a world superpower).

!

 

too many variables and not enough specifics to work this one out apart from saying - develop something (a plan) that will only trade one direction on your scenarios.....ensure that when you are wrong you dont get too bably burnt, but when you are right you maximise the upside form it.

 

Reason being - the markets will stay irrational longer than you can stay solvent.....and if like me you believe you cant predict the future, most of it is simply luck and being in the right place at the right time (think CHF yesterday), then 50 year predictions are for the strategists....not the traders.

 

as to how to invest.....if you think these things will trend - invest in aggressive trend following funds, or try and time it with long options (extra leverage, a stop loss) or optional investments related tot he idea. eg extreme oil shortages.....buy weapons manufacturers. For black swans - good luck......