Thursday, July 17, 2014

Piketty (16) Uncertainty

Piketty shows that r is usually greater than g. This might be true on average, but averages cover a multitude of sins.

People involved in business know how easy it is to get a negative rate of return, and even lose capital. Piketty makes it seem like a 4 percent rate of return is automatic. This is misleading. Getting a good rate of return on assets is extremely difficult. It takes a lot of energy, diligence and wisdom.

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