"In investing, it is better to sell a year too early, than a day too late".
After you sell how do you know when to buy back in again?
people with suits looking even more depressed than usual
Asset prices are high across the board
51–60 of 81 posts
Re: Asset prices are high across the board
#52Earlier quoted context omitted.
Can you explain this a little more? I don't quite know what dollar adjusted means.
The real value is the nominal value adjusted for the rate of inflation (using an agreed definition of inflation and against some agreed monetary base - see M0, M1... and other types of monies) Inflation means the purchasing power of the unit of currency is reduced. iirc it was Keynes who noted that government financing can utilise the margin between real and nominal values, with the benefit of also maintaining animal…
I also read the Amerman article now. His analysis completely forgets one very important thing: stock dividends, which are also higher during periods of high inflation, and compound if you reinvest them. I didn't run the math, but that would for sure change the results a lot.
Re: Asset prices are high across the board
#53I think that anyone in markets such as Bitcoin or Ethereum should be getting out now. It's obvious that we're at the peak and the bubble is soon to pop.
Re: Asset prices are high across the board
#54"In investing, it is better to sell a year too early, than a day too late".
No it isn't! It's better to buy and hold and ride it out. Otherwise you tend to miss the gains on the other side. Decades of research by now has shown that buy-and-hold beats timing the market every time.
yes, yes, decades of research by nerds in their labs, who don't trade and live on public welfare has shown that conclusively. in the meantime, here is what the real world is like:
* people falsely believe that due to having learned about the myth of the buy&hold investor, they are now 100% in control of their psychology and will not succumb to 'this time is different' panic selling when things get serious. their own psychology will be the biggest surprise to young investors, who have entered the market after 2008 and haven't experienced even a single correction.
* people aren't properly accounting for being forced to sell at a loss due to unexpected expenses, which are dramatically more likely to occur during a downturn, i.e. the probability of losing their job during a recession is >> than any other time. same thing with divorces, probably. maybe even illness. distant relatives asking for money. etc etc
* people aren't entirely wrong to panic sell when mass hysteria breaks out. most of the research is based on the US stock market, which is exceptionally long-lived and uninterrupted. if you asked tsarist bureaucrats retiring in France how well their portfolios are doing, they would sing you a different song.
* [personal] if I had to put a monetary value on the psychological relief I feel since reducing my exposure to equities by half, it is very well worth whatever grandiose compounding fortune I am forgoing because of it, not to mention that should I be lucky with the timing, that may not even be the case. as a rule of thumb: when you repeatedly find yourself checking financial news, you are invested too much (and are now longer a 'passive investor')
the only good thing to be said about the 'buy & hold' meme is that it drives people away from the even worse active management industry, but that doesn't make it unconditionally good advice.
Re: Asset prices are high across the board
#55Re: Asset prices are high across the board
#56Joe Kennedy supposedly said he avoided the stock crash of 1929 by getting out of the market when his shoeshiner started giving him stock tips. Multiple times recently I’ve been at restaurants recently overhearing people talk about how much money they’re going to make in Bitcoin. It’s hard to convey here, but the make-money-who-cares-how-it’s-magic came across every time in such a wow-this-is-definitely-a-bubble way.…
If you only invest what you can lose, it doesn't matter how long the market is irrational. Bitcoin is a high risk investment/volatile in the short term, but the question is what is it long term? You put your money in btc and they may crash 30% in a day. If you panic then you lose money.
Not sure what's with the downvote, but you are in essence right about going long.
"Markets can remain irrational a lot longer than you and I can remain solvent."
As for BTC, approach with caution, short or long.
Re: Asset prices are high across the board
#57Re: Asset prices are high across the board
#58"In investing, it is better to sell a year too early, than a day too late".
No it isn't! It's better to buy and hold and ride it out. Otherwise you tend to miss the gains on the other side. Decades of research by now has shown that buy-and-hold beats timing the market every time.
That discounts the fact that companies stop existing during 'ride it out' decade.
Re: Asset prices are high across the board
#59Recommended reading. 1929 . Galbraith. http://www.worldcat.org/title/great-crash-1929/oclc/93339017...
I doubt it would help.
So far I've seen four posts that are spot on, downvoted.
The general sentiment is towards hype and bubble, and it's just another echo chamber reinforcing the spiral.
Not just here, and a lot more pronounced lately.
Re: Asset prices are high across the board
#60Joe Kennedy supposedly said he avoided the stock crash of 1929 by getting out of the market when his shoeshiner started giving him stock tips. Multiple times recently I’ve been at restaurants recently overhearing people talk about how much money they’re going to make in Bitcoin. It’s hard to convey here, but the make-money-who-cares-how-it’s-magic came across every time in such a wow-this-is-definitely-a-bubble way.…
Mid 2000s was about flipping houses. Do we have seminars at Marriott courtsides pitching bitcoin yet?
I searched for "bitcoin seminar" and was not disappointed:
https://www.eventbrite.com/e/bitcoin-investmentwhat-how-when...