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32 sats \ 7 replies \ @Undisciplined 14 May \ on: No, Really: Leverage That Retirement Portfolio (Bloomberg, Matt Levine) econ
There must be some corresponding group that's holding too many shares, then. Right? Or, is it saying that shares are underpriced, in general?
Something weird is being said here.
hm, mayhaps.
some corresponding group that's holding too many shares, the current cohort of retirees...?
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Ok, so that means there's some misallocation that they're making. If it's just that they should be spending down their savings more, that would be very convenient for the implied model.
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I suppose...? Say more
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I'm just trying to figure out who has the shares that these younger folks are "supposed" to have and what the error is that's leading them to hold the shares.
The easiest answer, that I think you've written about, is that Boomers aren't spending enough. The win-win, then, is Boomers get more utility from consumption by selling their stonks and millennials get the stonks they should have.
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Hmmm ok, that sounds about right in general.
I suspect he dudes looking at this weren't considering general eq conditions like that, just intertemporal savings for a young person growing into retirement
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I think it's an entirely partial equilibrium analysis. So, taking prices as given, so and so would've been better off if they did this or that. But the analysis doesn't extend to what would happen to prices if everyone followed that advice
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I suspect that’s right. It obviously takes relatively few people acting on advice to lever up, before other things start happening.
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