I went to give a read about the life of the muse of the blog. She is dating an Italian of the Italian name, SIX centuries of an Italian family, works in the fashion branch, the element is almost my age, and I have been looking at her height, and she is smaller than me. This business of seeing people on TV and in photos takes away a lot of the perception of what a person really is. And she said she has a policy of NOT dating Hollywood actors and showbiz people. Interesting.
Let’s go after the gossip … After all, this is a finance blog starring a woman who does not even know the blog exists.
The last posts were very personal, philosophical and daydreaming about life. And they are the ones that I like the most. I’m reading 2 new books and doing one more course in Coursera so it will come more good thing here on the blog. It is amazing how much more good and cool thing you read and see more will give me to share the learning.
Well, if you are paying attention to the news realized that in 2016 the GDP of Brazil will fall (again) thank you PT, for all the destruction you have done in Brazil. GDP will fall, and will close at a -3.5%.
Worse than us, IN THE WORLD, only Venezuela. (Thank you Dilma). Then the people come ask me: Frugal, how do you dare to invest so much in the stock market with GDP falling? Will not the bag collapse too? Are not companies profiting by less, firing, closing doors, unemployed people, no money, indebted families, indebted companies?
Dear friends, thank you for the question. Finance is not exactly an area of Exact. Finance has a lot of behavioral psychology, collective thinking, betting, expectations, forecasts, millions of news, currency, oil, world governments, steel, corn and chicken, all mixed together. There are tens of thousands of variables that can never be controlled to get a serious study that correlates well with some variables.
It is simply impossible to make predictions here, in finance and markets, stocks, commodities, bitcoin, gold, water, REITS, handbags and so on. PÁRE to try to predict things, make bizarre mental associations, silly correlations and also stop believing and following reports from managers, assets, “analysts” and everything else. Finance can not be considered a science in the purest sense of the word. There is no way to control and test variables or how to test and falsify hypotheses. According to the logic that Karl Popper, nothing less than PHILOSOPHER LARGEST the twentieth century, and which I have great appreciation, admiration, and respect.
So who am I or you to refute Karl Popper? I’d rather hitchhike on his vast knowledge and so mark my life a little.
Well, in 2016 the GDP will fall in Brazil, in that amount that I mentioned (-3.5%).
And the stock market has risen 35% (the ibovespa) in the last 12 months. Analyzing the last 16 years we will conclude some more or fewer things that can be concluded and according to the small paragraphs above:
THERE IS NO RELATIONSHIP OF THE BRAZILIAN GDP WITH THE BRAZILIAN EXCHANGE STOCK MARKET!
(Why not? It seems so obvious). [If you got this far and you still have this question read the paragraph in bold two above it. If I continue to misunderstand, I suggest reading Karl Popper’s books and understanding what science is.] By the way, I strongly point out Karl Popper’s reading to any human being as a matter of life experience and deep teaching about the world. This can save your life or some friend or family member.
To see HOW THERE IS NO RELATIONSHIP BETWEEN GDP AND THE BRAZILIAN BANK, THERE ARE TWO TABLES THAT SHOW THIS.
Evolution of the GDP of Brazil since the year 2000.
IBOVESPA SINCE The year 2000 (last column)
Year / Points / Variation of IBOV
Little Lesson: Your portfolio may have absolutely NOTHING to do with the IBOV. The IBOV is just a package of specific stocks that according to MEDIA and analysts REFLECT the Brazilian stock exchange, and this MAY have nothing to do with YOUR individual performance in your investments. Okay. Having said that, let’s go ahead:
The year 2000 Brazil’s GDP is very good + 4.30, IBOV falls -10%.
The year 2001 GDP recedes a little to +1.30, IBOV falls -11%.
The year 2002 GDP rises +2,70, IBOV drops -17% (what dose this horrible 3 years in the stock market huh? Here the unsuspecting ones were selling everything and coming out of the bag, a reflection of the.COM bubble in the US Yes the world Was going to end
Year 2003 GDP rises +1.1, IBOV takes off + 97% !! Whoever had the patience paid off, did not he?
The year 2004 GDP rises incredible + 5.7% and IBOV rises 17.8! What year eh ?? Too bad I was practically a beggar.
The year 2005 GDP rises +3.0 and IBOV rise 27.7%! INCREDIBLE IBOV SEQUENCE!
Year 2006 GDP rises + 4% and IBOV rises 32%! What pressure! Everyone rich! (And I’m taking a ride to college and having lunch at the galley house)
The year 2007 GDP rises + 6.1% and IBOV rises 43.5% You so brinks with me, do not you?
The year 2008 GDP rises + 5.2% and the IBOV? And the IBOV? Hum hum? The IBOV? Dow -41.2% (Imagine you start the year with 1 million and finish it with R $ 590 thousand … because it is …)
The year 2009 PIBINHO is in +0.3 and BOBOV, O BOBOV ?? HMM? There is? BOBOVÃO rises + 82% Can release the chicken !!
The year 2010 GDP shrinks + 7.5% and BOBOVÃO? BOBOVÃO went up 1% !! Ah no myuuuu !!
The year 2011 GDP + 2.7% and BOBOVINHO at those times? Little boy? Dropped -11.18% !! Oh, no, you silly boy !! And my LF? (I.e.
The year 2012? little GDP + 1% and IBOV of + 7.4% Year half mouth huh?
2013? GDP + 2.7% and IBOV -15.5% (And it was in that year that I entered the stock market!
2014? little gdp of + 0.1% and BOBOV? BOBOV -2.91% (Worth BOBOV, I contributed the YEAR ALL IN SHARES)
2015? GDP -3.8% GARBAGE! And BOBOV with my all in in stock? -13.31 !! What a beauty !!!!! Loved it!! I finished 2015 with -100 thousand reais compared to what I had put in. Sensational. This after reading and studying just like a convict.
2016? Probably the GDP will be trash equal to 2015 (-3.5%) more or less and BOVESPA + about 25% if everything is all right.
So dear friends, keep the course, DIVERSIFIQUEM, in Treasury Direct, Shares and Real Estate Funds, contributes every month and STOP making and following any kind of forecast.
GDP AND IBOV Have NO RELATIONSHIP AT ALL!
PS: From 2000 to 2016 the index quadrupled in 16 years. In Brazilian fixed income (TD), its equity doubles every 6 years on average.