Comments on: An Alternative To The Official Ponzi Scheme

By: Jacob Theodore

Jacob Theodore — Mon, 01 Mar 2010 03:54:37 +0000

FYI: In the early eighties I did a paper for my MBA. I studied the Yield of the NY Stock Exchange over it's entire history as recorded in the NYSE Index. What I discovered using regression analysis and noise cancelling best straight line curve fitting,was that the Index's perfectly diversified portfolio, corrected for inflation, had an embedded constant yield over its entire history. That yield was 10.4% per year.

My professor told me that I had rediscovered something that is used as the proof of the Efficient Market. That theory states that in a completely diversified market, sellers and buyers converge on a mutually agreeable yield. The utility of this information is that if you have a completely diversified portfolio, you have the right to expect, over 20 to 30 years, that 10.4 % yield. So when you buy an index fund, the manager splits your earnings with you. That's a nice payoff when he doesn't have to do any more than make sure the portfolio contains all stocks on the exchange.

A Social Security substitute fund that didn't take half the profits (say only 1% overhead), would yield enormous amounts after 30 years at compound interest.

By: Iowa Tea Party Patriots Blog » Was there an alternative to Social Security?

Iowa Tea Party Patriots Blog » Was there an alternative to Social Security? — Wed, 02 Dec 2009 17:46:07 +0000

[...] have been invested in low cost index funds like Vanguard. This was covered by Glenn Beck – more here. And SS is truly a Ponzi scheme by definition. Share and [...]

By: Christy

Christy — Fri, 30 Oct 2009 13:34:29 +0000

I think two other counties in Texas opted out of S.S. about the same time as Galveston. But I think I read somewhere that as soon as that happened, the Congress changed the law so others could not opt out, nice huh?

By: Wayne

Wayne — Fri, 30 Oct 2009 13:07:52 +0000

Bernie Madoff may have been a piker in bilking clients with his Ponzi scheme â€” at least in comparison to the big league Ponzi scheme being run by the Federal Social Security.

If Rick Gornto was to roll his Galveston Plan out nationally making it available to more people he’d never be able to keep up with the demand for his service.

By: An Alternative To The Official Ponzi Scheme Â« NewsReal Blog - Pasarici.NET Blog

Fri, 30 Oct 2009 13:01:22 +0000

[...] did irreparable harm to the liberal and far-left causes he loved. … See the original post: An Alternative To The Official Ponzi Scheme Â« NewsReal Blog Share and [...]

By: mikidiki

mikidiki — Fri, 30 Oct 2009 12:44:08 +0000

That is a telling point which may only be resolved by placing the funds into a stable foreign currency or gold; but the fund managers will then have to be financial whizzkids and who knows where that will end up.

By: sean

sean — Fri, 30 Oct 2009 05:03:05 +0000

I think everyone agrees that the Federal Gov’t will not default so both plans pay out with the same dollars. If you believe future Social Security payments will result in inflation and a loss of purchasing power, it will hit both plans equally – both are in USD. You have to ask yourself, what is the risk adjusted return in the private plan.
I’m 100% for privatizing some or all of Social Security but lets be honest about how we look at risks and returns.

By: uberVU - social comments

uberVU - social comments — Fri, 30 Oct 2009 02:36:56 +0000

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