@Sakura please summarize this article, thanks uwu.
Browse Web
TLDR 
The article argues that most investments, including bonds, stocks, and real estate, have historically underperformed basic assets like gold. The key is that a small percentage of investments account for the majority of returns, while the vast majority of investments perform poorly.
Key Points 
- Bonds, stocks, and real estate have all underperformed gold over the long run.
- Just 4% of stocks account for nearly all excess returns over T-bills.
- Unlevered real estate generally performs decently but doesn’t outperform gold.
- Leverage has been a key way to turn mediocre investments into good ones.
- Large companies and investors use leverage to arbitrage the spread between borrowing fiat currency and investing in scarce assets.
In-depth Summary 
The article delves into the historical performance of various asset classes, showing that bonds, stocks, and real estate have all generally underperformed basic assets like gold. For bonds, even holding US Treasuries has failed to keep up with the purchasing power of gold. For stocks, the author cites research showing that just 4% of stocks account for nearly all excess returns over T-bills, while the majority of stocks fail to even match T-bill returns.
The story is similar for real estate - while some top-performing properties have done very well, the majority of unlevered real estate investments have failed to outperform gold. The author argues that this doesn’t mean these investments shouldn’t have been made, as they often provided value to owners, workers, and customers, even if they didn’t generate outsized returns for passive investors.
The key to turning mediocre investments into good ones has been the use of leverage. Large companies and investors have been able to borrow fiat currency at low rates and use that capital to buy scarce assets like stocks and real estate, effectively shorting the fiat currency and arbitraging the spread. This has allowed them to generate much higher returns than would be possible without leverage.
However, the author suggests that the conditions that have enabled this strategy over the past few decades - namely, steadily declining interest rates and abundant global capital flows - may be changing. As interest rates rise and geopolitical tensions increase, the effectiveness of this “financial blackjack” strategy is likely to diminish. In this environment, the author emphasizes the importance of focusing on investments with durable competitive advantages, and being cautious about extrapolating past performance into the future.
ELI5 
The article explains that most investments, like stocks, bonds, and real estate, don’t actually make that much money for people who just put their money in and wait. Only a tiny fraction of investments do really well, while the majority either just match boring government bonds or even lose money compared to just holding onto gold.
The reason some investments do so much better is that the people running them use a lot of borrowed money (called “leverage”) to boost the returns. Big companies and investors are really good at borrowing money cheaply and then using that money to buy things that end up being worth a lot more. This allows them to make a lot of money, even if the underlying investment isn’t that great on its own.
However, the article suggests that this strategy of using a lot of borrowed money might not work as well in the future, as interest rates start to rise and the global economy becomes more complicated. So regular investors need to be really careful about just assuming the past few decades of great investment returns will continue. They need to focus on finding the truly special investments that can do well even without a lot of borrowed money.
Writer’s Main Point 
The main point of the article is that the vast majority of investments, whether in bonds, stocks, or real estate, have historically underperformed basic assets like gold. This is because a tiny percentage of investments account for the majority of returns, while the vast majority of investments perform poorly.
The author argues that this doesn’t necessarily mean these investments shouldn’t have been made, as they often provided value to owners, workers, and customers. However, it does mean that passive investors need to be very selective in their investments, focusing on companies and properties with durable competitive advantages.
The author also highlights the key role that leverage has played in turning mediocre investments into good ones, as large companies and investors have been able to borrow cheaply and use that capital to buy scarce assets. However, the author suggests that the conditions that have enabled this strategy may be changing, and that investors need to be cautious about extrapolating past performance into the future.
