Daily Speculations

The Web Site of Victor Niederhoffer & Laurel Kenner

Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.



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The Wiz: Triumph of the Optimists

My son loves history books, and today I read to him about Elizabethan theater. What caught my eye: In those times, a ticket to see a Shakespeare play at the Globe cost 1 or 2 pence, and a 'pint of good ale' cost 2 pence. Whereas now a Broadway ticket is 10 or 20 times as expensive as a taproom beer. So the play/beer ratio has risen about 20-fold.

Beer is a capital-intensive commodity; theatre loads heavily on human capital -- ingenuity, creativity, etc. Shows in a nutshell why stocks, which are essentially a securitization of human capital, always go up in the long term relative to physical goods.

(Editor's note: But that's not the end of the story. ..... the rest of the story is that the son that Mr. Wiz talks about who loves history stories is 5 years old.)