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This Week on The Compound
This Week on The Compound
This week on TCAF, Josh and Michael were joined by Robert Frank, Wealth Editor at CNBC. They discussed how the richest people invest and spend their money, the wealth effect, the soaring cost of vacations, and prospects for the end of the carried interest loophole. (Listen)
CHART OF THE WEEK
Josh and Michael spent much of their time this week talking with Robert Frank about the state of wealth in America. They noted that entry into the upper levels of wealth has gone way up. In short, being a millionaire doesn’t cut it anymore. Nick Maggiulli, writing at Of Dollars and Data, took a closer look at the data.
So, how much wealth would you need to have (as of 2022) to be in the top 5% of U.S. households? $3.8 million. In other words, you would need about $4 million today to feel relatively as wealthy as someone with $1 million did in 1998.
OUTSIDE THE COMPOUND
For a long time, it was common knowledge that bubbles couldn’t re-inflate themselves. That it took time for markets to learn and then forget the lessons from a bubble. Owen Lamont, a recent Live from the Compound guest, talks about how bubbles can appear in rapid succession. An excerpt:
Bubbles do sometimes repeat within the span of a few years. Historically, the Mississippi Bubble in France ended around 1720 just as the South Sea Bubble appeared in Britain. And in the past few decades we’ve often see blatant overpricing that appears, gets corrected, and then promptly re-appears. In the lab, we can observe bubbles that occur in repeated experiments run with the same participants. All these facts are consistent with theoretical models that can produce recurring waves of bubbles.
MERCH
idontshop.com is back up! You can once again order your favorite Compound merch like our Compound x PeterPaid official hoodie.
COMING SOON
This week on TCAF, Josh and Michael will be joined live in Florida by Brian Belski, Chief Investment Strategist at BMO Capital Markets.
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