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Show HN: Is the stock market going to crash?

isthestockmarketgoingtocrash.com

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Re: Show HN: Is the stock market going to crash?

#251

Post by SmellTheGlove »

notyourwork wrote: post #41
SmellTheGlove wrote: post #15

Earlier quoted context omitted.

I wouldn't worry about student loan debt being a problem. It's very likely that they're going to get a bailout before a bubble bursts. Where on earth did I come up with this, you ask? Easy - I just paid my student loans off last week. It's only natural that everyone else will now get bailed out! Seriously, though, this is a real problem and we need to do something. Even if it doesn't have a direct effect any time soo…

I completely agree, this is going to be a problem for our generation. For those of us who are lucky enough to not have any student debt, how can we take advantage of this?

Well, as someone recently off the scrolls of student loan debt, I can tell you this -

Save. Don't spend it. Save it. Invest it wisely.

Paying my shit off gave me an incredible sense of freedom, even though I still have a wife and kid and household to maintain, the usual job pressure, etc. I thought about it, and the sense of relief was from knowing that I was free of debt service, so the best thing I can tell you is to save your money and not make a single interest payment more than you need to.

Re: Show HN: Is the stock market going to crash?

#252

Post by SmellTheGlove »

ihsw2 wrote: post #223
SmellTheGlove wrote: post #15

Earlier quoted context omitted.

I wouldn't worry about student loan debt being a problem. It's very likely that they're going to get a bailout before a bubble bursts. Where on earth did I come up with this, you ask? Easy - I just paid my student loans off last week. It's only natural that everyone else will now get bailed out! Seriously, though, this is a real problem and we need to do something. Even if it doesn't have a direct effect any time soo…

It's already hurting the housing and consumer spending segments, as per the incessant and continuous "Millenials are killing the X industry" clickbait every other hour. Replace X with home ownership, car ownership, renovation, Chili's, Applebee's, and whatever else services the traditional nuclear family.

Damn millenials killing everything indiscriminately.

Our economy is built off of the boomer generation and their behaviors. They enjoyed stable, living-wage jobs, affordable housing, dirt cheap education, etc.

Now we have an emerging gig economy, ridiculous tuition costs (and the expectation of a degree to do more or less anything), cheap credit to prop up the housing market (did we learn nothing in 2008?).

IMHO, it hasn't hurt housing enough, and politically, that's going to stay as long as possible. A lot of boomers also have a large portion of their net worth tied up in their home, and letting that bubble burst will just swap economically disadvantaged millenials for economically disadvantaged boomers. Even setting aside the fact baby boomers also run our political institutions, for a variety of reasons, it's still better to have young people who can't buy anything because they still at least can work, versus a bunch of displaced retirees who also can't work any more. It's a really shitty situation. I try not to blame an entire generation too much because it's more complex than that, but I'm in my mid-30s and feel like I got really lucky. The generation right behind me really had the ladder pulled up before they could get to it.

Re: Show HN: Is the stock market going to crash?

#253

Post by JKCalhoun »

deafcalculus wrote: post #187
Animats wrote: post #125

Earlier quoted context omitted.

No, the 2008 crash wasn't a black swan. It just came from the debt side, rather than the equity side. It was clear this was coming. In 2004, I wrote this, on my "downside.com": [1] The next crash looks to be housing-related. Fannie Mae is in trouble. But not because of their accounting irregularities. The problem is more fundamental. They borrow short, lend long, and paper over the resulting interest rate risk with d…

Do you think there's another housing bubble now?

I don't see it.

Re: Show HN: Is the stock market going to crash?

#254

Post by JKCalhoun »

mendeza wrote: post #6

What about student loan debt, how does that factor into the economy or the stock market being affected? Right now student loan debt is at 1.4 trillion source: https://www.debt.org/students/

No one is "flipping" student loans though. I don't see student loan debt being a trigger of anything market-disrupting.

Re: Show HN: Is the stock market going to crash?

#255

Post by StanislavPetrov »

wyager wrote: post #170
PDoyle wrote: post #119

Earlier quoted context omitted.

Wow, really interesting read. Thanks for the link. Only trouble is that once people find patterns like this, they have a habit of disappearing. Hopefully this one is based on solid enough fundamental market forces that it persists after its publication. It was published in 2013 so we won't know for sure until after 2023.

> Hopefully this one is based on solid enough fundamental market forces that it persists after its publication. If you can find any way to predict the future price of things, you can make money by performing arbitrage across time (instead of space, which is how people usually think of arbitrage). This (nominally) describes all types of model-informed time-based investment. The thing with arbitrage is that there's a f…

This is true in a theoretical free market where there is price discovery. In the "markets" that actually exist, though, we don't have true price discovery. We have a market with centrally controlled interest rates, central bank purchasing (in a variety of ways) and other institution-based interference that create inefficiencies that are not organic, and are therefore not self-correcting.

Re: Show HN: Is the stock market going to crash?

#256

Post by SmellTheGlove »

empath75 wrote: post #126
SmellTheGlove wrote: post #15

Earlier quoted context omitted.

I wouldn't worry about student loan debt being a problem. It's very likely that they're going to get a bailout before a bubble bursts. Where on earth did I come up with this, you ask? Easy - I just paid my student loans off last week. It's only natural that everyone else will now get bailed out! Seriously, though, this is a real problem and we need to do something. Even if it doesn't have a direct effect any time soo…

I think that there has to be some responsibility pushed back onto the universities and banks that are selling these loans for defaults. I think it's obscene that colleges are selling near-useless degrees to 18 year olds for $50k+. There has to be some incentive for either colleges to charge less for certain degrees or push people into degrees that will lead to higher paying jobs, or simply get pickier about who they…

But there isn't any risk to the school or the lender. Anyone can get student loans up to the federal cap, and they're practically not dischargeable, either.

The incentive has to come from somewhere else, but most solutions involve making it a lot harder for poor people to go to college. It's a tough problem.

Re: Show HN: Is the stock market going to crash?

#257

Post by JimboOmega »

stvswn wrote: post #248
JimboOmega wrote: post #213

Earlier quoted context omitted.

So I've had a fundamental complaint about Market Cap to GDP at least since 2005, which I've never gotten a good answer to: There's this expectation that the market returns 7-10%... a number much in excess of the actual rate of GDP growth (over any significantly long period, anyway) That can't continue forever. Especially in aggregate across the world. At some point the public market has captured substantially all the…

I'll probably get some of this wrong, but I read up on these arguments back when Piketty was in the news w/ his book: Yes, it can go on forever -- the rates of retun in the stock market are based, theoretically, on the changing expectations about the future and not based on current income. Thought experment: 100 of us live in small society producing widgets, we each make a widget a day at the factory. GDP is 36500 wi…

Your example anticipates a huge growth in productivity, which is a factor in GDP; in that case, the stock market is a forward indicator of anticipated GDP.

Which, if so, still doesn't allow it to grow infinitely out of proportion to GDP, unless the time horizon keeps changing or the anticipation of the future gets steadily farther away from reality.

So you mention in the eras it that it outpaces GDP... I've consistently had the message drilled into me that in the long term (20+ year horizon), stocks will return something like 7-10%, while of course, nobody would expect GDP growth anything like that (outside of a rapidly industrializing environment where productivity is rocketing upward, like China).

An era is not forever, so...

Re: Show HN: Is the stock market going to crash?

#258

Post by [deleted] »

empath75 wrote: post #117
leongrado wrote: post #112

Earlier quoted context omitted.

Completely agree. Yeah luckydude I can say with 100% certainty that if you took all of your money out right at this moment, you won't lose any money in the next crash. Give me the nobel prize in economics guys.

unless the 'next crash' is runaway hyper inflation.

[deleted]

Re: Show HN: Is the stock market going to crash?

#259

Post by cloudkj »

babaganoosh89 wrote: post #232
PDoyle wrote: post #119

Earlier quoted context omitted.

Wow, really interesting read. Thanks for the link. Only trouble is that once people find patterns like this, they have a habit of disappearing. Hopefully this one is based on solid enough fundamental market forces that it persists after its publication. It was published in 2013 so we won't know for sure until after 2023.

I actually made an automatically updating chart for this using FRED data: http://financial-charts.effingapp.com TLDR: The correlation did go down a bit since publishing but still seems alright.

Thanks for this. Can you also add a way to change the window for S&P returns from 10 years to other time windows? It'd be interesting to see how the plot changes with adjustments to the window.

Re: Show HN: Is the stock market going to crash?

#260

Post by jliptzin »

module0000 wrote: post #242
rocho wrote: post #239

Earlier quoted context omitted.

Could you suggest books that go deeper in the second type of technical analysis? Most of what I find online fits well in the first type you described.

The best resource I know is John Grady's "No BS Day Trading" book. It's part of his basic course at http://www.nobsdaytrading.com/courses/basic-course/ Reading that and applying it was a huge turning point for me in my trading.

Couldn't this strategy be easily automated, and therefore, probably has been competed away by now?
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