Show HN: Is the stock market going to crash?

Post by matt_wulfeck » Mon, Aug 07, 2017, 3:39 PM UTC

KasianFranks wrote: post #92

pdog wrote: post #69

If you're looking for The Single Greatest Predictor of Future Stock Market Returns[1], here it is: http://www.philosophicaleconomics.com/2013/12/the-single-gre... This is a long read, but it's worth it. The metric can be calculated in FRED[2], and as a predictor of future returns, it outperforms all of the most common stock market valuation metrics, including cyclically-adjusted price-earnings (CAPE) ratio[3]. (Basic…

When the yield curve begins to dip, a flight to quality will begin into crypto's.

Post by LeifCarrotson » Mon, Aug 07, 2017, 3:39 PM UTC

luckydude wrote: post #84

misja111 wrote: post #78

The metric used to calculate market overvaluation is interesting but it has little value for predicting a stock market crash. Let's take he last 3 major US crashes: 1987: this crash was caused by automated trading systems which could run wild in the absence of any prevention regulations such as circuit breakers 2000: the collapse of the dotcom bubble 2008: start of the financial crisis caused mainly by opaque credit…

"occurrences that nobody was aware of and that were only understood afterwards" Umm, I'm no genius but I was managing my mother's money at the time of the 2008 crash. It was very obvious to me that there was going to be a crash, I pulled out of the market in late 2006 and didn't lose a dime in the crash. I think the better statement is "The 2008 crash was obvious but many people were in denial". Again, I'm not a fina…

Post by aembleton » Mon, Aug 07, 2017, 3:40 PM UTC

omg_ketchup wrote: post #81

Site just displays a blank page. No error or anything. I think that's a better statement than whatever the app actually does.

Post by notfromhere » Mon, Aug 07, 2017, 3:41 PM UTC

mathiasben wrote: post #29

I feel as though the "stock market" following the 2008 crisis has become further insulated from the larger economies fundamentals. wages can continue to not keep up with inflation, savings rate continues it's downward slide, household debt service payments consume an ever increasing slice of disposable income, etc... all the while the type of dramatic dislocation event similar to 1929, 1987 are unlikely to occur. the…

Post by javajosh » Mon, Aug 07, 2017, 3:42 PM UTC

JumpCrisscross wrote: post #80

runako wrote: post #35

I've never seen market valuation expressed as market cap as % of GDP. I'm not an economist, so I'll leave the detailed arguments to them. But it would be at least useful to explain why you think this is a meaningful metric as compared to those typically used to measure market valuation (e.g. P/E ratios etc.). Your graph also ties your valuation metric to the 2000 peak and the 2008 peak. However, there were crashes in…

> market valuation expressed as market cap as % of GDP This metric makes little sense for this use case. Consider two countries. They are identical in every way except in Country A 90% of the companies are publicly-traded while in Country B 10% are. Country A will have a market cap to GDP 9x Country B's. Does that mean Country A is 9 times overvalued relative to Country B? The objection works in-country, too. Saudi A…