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Financial Impact of the “No Loser Policy”

Losing sucks. It hurts.

If you could avoid the pain of losing, would you? If you could avoid the pain today, but suffer some consequence in the distant future, would you?

How about when your kids want some sweets?


The death of price

A core principle of free markets is the operation of the pricing mechanism. Prices of goods and services are self-regulated by the open market and by consumers.

Laws and forces of supply and demand are free from any intervention by a government or other authority, and from all forms of economic privilege, monopolies and artificial scarcities.

US is not free and it is getting less free

Give up the bad habits that rob kids of mental strength

In 13 Things Mentally Strong People Don’t Do: Take Back Your Power, Embrace Change, Face Your Fears, and Train Your Brain for Happiness and Success Amy Moring outlines the following things:

  1. Condoning a victim mentality
  2. Parenting out of guilt
  3. Making their kids the center of the universe
  4. Allowing fear to dictate their choices
  5. Giving their kids power over them
  6. Expecting perfection
  7. Letting their kids avoid responsibility
  8. Shielding their kids from pain
  9. Feeling responsible for their kids’ emotions
  10. Preventing their kids from making mistakes
  11. Confusing discipline with punishment
  12. Taking shortcuts to avoid discomfort
  13. Losing sight of their values

More citizens believe the US government can prevent (or at least postpone) pain

  • They don’t want asset prices to go down
  • They don’t want the stock market to go down
  • They don’t want wages to go down
  • They don’t want to have to pay a high interest rate for money
  • They want unlimited borrowing

Fed zero rate to 5 years to feed through to corporates

Eventually, zero interest rates fed through to companies

Buybacks were one unintended consequence of zero interest rates

Some large companies operating with little or no equity thanks to buyback

Fed attempted to stamp out free-market pricing of risk in the high yield bond market

Key points

  • Citizens look to their central government to save them
  • Everyone has increased dependency on the state as workplaces are closed
  • Expect the US (and others) to use this opportunity to increase federal government power
  • The government is doing everything in its power to avoid citizens feeling pain, which leads to mispricing of risk
  • Even though it’s getting riskier, you’re getting paid less to take on risk


DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.