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What to Worry About in This Surreal Bull Market

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Re: What to Worry About in This Surreal Bull Market

#31

Post by TheAdamAndChe »

snappyTertle wrote: post #6
AndrewDucker wrote: post #2

I'd love to know how far away from the next crash people think we are. And where they think is a safe place to put money when that happens.

I think the bubble is the US dollar. Currently our debts are being serviced by issuing more debt! Safe places IMO are deflationary assets (gold, and to a much more risky extent, bitcoin...I know this will start a flame war lol). Another option is foreign assets in countries that are not holding onto a lot of US debt. I'm not an oracle, so I can't predict timing, although I do think it will happen relatively soon in t…

I've always liked Warren Buffett's explanation on why investing in gold is pretty silly[1]. Basically, owning gold as an investment is purely speculation, because earning a return requires greater demand in the future. It doesn't have the potential to provide dividends or grow exponentially like ownership in a business does. Gold earns nothing for you over time.

Instead of investing in gold, why not invest in a foreign market that's at least partially insulated from the US?

[1] http://www.minyanville.com/trading-and-investing/commodities...

Re: What to Worry About in This Surreal Bull Market

#32

Post by ronnypostsstuff »

What is the best thing to do with my savings? I am thinking about investing, and read up on it. One thing I don't understand is where to put money to minimize the impact of a recession. Government bonds? But then Graham says, I think, bonds prices also rise in a bull market, and fall afterwards.

Re: What to Worry About in This Surreal Bull Market

#34

Post by brndnmtthws »

artur_makly wrote: post #29

Would BTC prices rise or fall after this hypothetical crash?

Nobody knows, but if I were to guess I think they'd rise. If you're someone who loves Bitcoin (and it would make sense to think the people buying Bitcoin love it), then it's likely you think of it as a safe haven.

I see Bitcoin (and ETH, and others to a lesser degree) as a safe haven. I personally have been selling off stock and moving into BTC, ETH, and others because I think the traditional stock and bond market is grossly overvalued and lacks the utility, censorship resistance, and security of Bitcoin. Nearly 10 years of the Federal Reserve buying up whatever crap people are selling, and building a $4 trillion balance sheet, means the current market prices don't reflect what the market can support.

Re: What to Worry About in This Surreal Bull Market

#35

Post by TheAdamAndChe »

truffle_pig wrote: post #22

Shameless plug (but related): https://isthestockmarketgoingtocrash.com/ Posted this here a while ago and people seemed to like it.

I wonder what makes them think the stock market is overvalued. Increasing inequality combined with market saturation and the current difficulty to start a competitive business means it makes perfect sense that stock prices are historically high. Combine with the fact that passive index investing has become the norm, and it seems like it will be a new normal.

Re: What to Worry About in This Surreal Bull Market

#36

Post by cm2187 »

One more on the list: the end of quantitative easing. I think QE has largely pushed the markets up since 2009, and the withdrawal of liquidity from the system (if it ever happens, but normally should start this year) combined with increasing rates should at the very least create market volatility, if not apply a downward pressure.

Re: What to Worry About in This Surreal Bull Market

#37

Post by sutterbomb »

anon1253 wrote: post #27
KozmoNau7 wrote: post #19

Earlier quoted context omitted.

I'll admit it's my personal estimate, looking at last decade's constant up-up-up of US stocks, especially the tech sector, and (as mentioned in the article) the widening gap between the value of U.S. household assets and GDP growth­. It's unsustainable growth, and I'm afraid the crash is going to happen sooner rather than later. Will it be as bad as in 2008? I don't know. But it's going to hurt (except if you're weal…

I'm not an economist. But here is my arm-chair philosophizing about what is happening. To combat the economic crisis we started printing a lot of money. This had two effects: the interest on savings went way down, and the loans became very cheap. Having money = bad, having debts = good, at least for those who can carry the burden. This was done in order to incentivize investing, thus growing the economy. Obviously, t…

What rate do you consider hyperinflation? Are we in it now? What measure are you using? Afaik we’ve been running under 2% inflation for quite some time.

Re: What to Worry About in This Surreal Bull Market

#39

Post by anon1253 »

sutterbomb wrote: post #37
anon1253 wrote: post #27

Earlier quoted context omitted.

I'm not an economist. But here is my arm-chair philosophizing about what is happening. To combat the economic crisis we started printing a lot of money. This had two effects: the interest on savings went way down, and the loans became very cheap. Having money = bad, having debts = good, at least for those who can carry the burden. This was done in order to incentivize investing, thus growing the economy. Obviously, t…

What rate do you consider hyperinflation? Are we in it now? What measure are you using? Afaik we’ve been running under 2% inflation for quite some time.

I think we're hiding the rate of inflation in overvaluation of property and stocks, because money is cheap.

Re: What to Worry About in This Surreal Bull Market

#40

Post by sillysaurus3 »

anon1253 wrote: post #27
KozmoNau7 wrote: post #19

Earlier quoted context omitted.

I'll admit it's my personal estimate, looking at last decade's constant up-up-up of US stocks, especially the tech sector, and (as mentioned in the article) the widening gap between the value of U.S. household assets and GDP growth­. It's unsustainable growth, and I'm afraid the crash is going to happen sooner rather than later. Will it be as bad as in 2008? I don't know. But it's going to hurt (except if you're weal…

I'm not an economist. But here is my arm-chair philosophizing about what is happening. To combat the economic crisis we started printing a lot of money. This had two effects: the interest on savings went way down, and the loans became very cheap. Having money = bad, having debts = good, at least for those who can carry the burden. This was done in order to incentivize investing, thus growing the economy. Obviously, t…

Relevant: https://www.youtube.com/watch?v=PTUY16CkS-k
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