My theory on why the stock market will always go up, and it has nothing to do with finance
I've been seeing a lot of bear posts lately - tariffs, Iran, government debt, AI fears. All valid converns. But I think they're small compare to the bigger picture.
I developed a theory myself in the past two years (not sure if similar thesis has been mentioned by otheres) that goes beyond finance, into astronomy, sociology, and the Pareto principle. Hear me out before you call me insane.
**The thesis: Earth is always progressing. Progress requires more energy. Energy growth is driven by more advanced technology. In modern capitalism, technology is driven by top companies. Those companies ARE the stock market.**
**Astronomy - The Kardashev Scale**
The Kardashev scale measures a civilization's level of technological advancement based on how much energy it can harness and use. We're currently somewhere around Type 0.7 - nowhere near Type I yet. That means we're still on the steep part of the curve, with massive room to grow.
This got me thinking: if civilizations are fundamentally measured by energy consumption, and energy consumption only goes up... what does that mean for the entities producing and consuming that energy?
**Sociology - The Direction of Human Progress**
For thousands of years, human civilization has marched in one direction: more technology, more energy.
* From walking → horse → steam engine → aircraft: we travel further, faster, consuming more energy every step
* From manual farming → animal labor → mechanical farming: more output, more energy
* From word of mouth → writing on cloth → printing press → personal computers → internet → AI: we exchange and store information exponentially better, and consume exponentially more energy doing it
AI alone requires insane amounts of electricity just to operate. Every generation of technology consumes more energy than the last. This trend has never reversed in recorded human history. There might some shor term up and downs but the long term direction is always the same.
**Pareto Principle - Where the Progress Lives**
The top 20% of companies drive 80% of the world's technological advancement and energy consumption (not an accurate stats, just my assessment). Set aside the ESG debate for a moment and just follow the logic:
Where are these top 20% world-class companies listed? Most of them are on the NYSE and NASDAQ.
The US stock market essentially IS humanity's technological progress, packaged into tickers. When you buy the S&P 500, you're not betting on "the economy" - you're betting on the continued technological advancement of human civilization. And that bet has paid off for literally thousands of years.
"But throughout human history, no single country or empire has dominated forever." I totally agree - that's why I've also started buying non-US top equities, alongside Bitcoin and gold, to diversify concentration risk across asset classes and markets.
**"But what about catastrophe?"**
Some might say: what if there's a black swan? What if AI takes over? What if civilization collapses?
My answer: if any of those things happen, the stock market is the last thing any of us would care about on that day. Your portfolio becomes irrelevant when you're worried about food and shelter.
Until that day, the market goes up. Not in a straight line. Not without ugly 30-40% drawdowns. But long term directionally - always up. Because progress doesn't stop.
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This is why I DCA and sleep well at night. The tariffs, the wars, the government debt, the credit scares - they're noise on a graph that has pointed up for as long as civilization has existed.
I'm not a financial advisor. I'm just a guy with an accounting degree who stares at the Kardashev scale and thinks "yeah, we're going up." Hope I'm not insane.