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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

#91

Post by aedron »

chrisbro wrote: post #62
aedron wrote: post #12

A bubble in slow motion, someone called the present economic environment. I think it's an apt description. Extreme "quantitative easing" (I refuse to take fed speak seriously) has only taken effect very, very slowly. Why? Because all it really was was recapitalizing banks which had enormous gaping holes on their balance sheets after 2008. They have been able to fill the tanks now, getting money hot off the presses fo…

Minor correction: Sarbanes-Oxley was introduced in 2002 after the Enron/Worldcom crises, not after the 2007/2008 financial crises: https://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act

Dodd-Frank it was indeed, thanks.

Re: What to Worry About in This Surreal Bull Market

#92

Post by sdljfslkjfdsj »

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.

The best place to put your money is typically where nobody else wants to put theirs. IMO nobody wants cash today. They want anything except cash no matter how risky. Stocks at highest valuations ever, BTC (unregulated), emerging market high yield, bonds with negative yields (because they think it will price appreciate), art, cars, volatility selling (fixed gains & unlimited losses), etc.

The least desired asset class right now is cash. Compare that to 2009-2011 or so & cash was the prized asset class which underperformed going forward. Aside from the least desired, the cheapest asset class in the world today is volatility.

Re: What to Worry About in This Surreal Bull Market

#93

Post by MiguelVieira »

ronnypostsstuff wrote: post #32

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.

Increase your investment allocation of Treasury Inflation Protected Securities: https://www.investopedia.com/terms/t/tips.asp

Re: What to Worry About in This Surreal Bull Market

#94

Post by jreynojustin »

mathgeek wrote: post #14

The next market recession will happen the same as the previous ones: some lucky people will predict it, most won't, and everyone will in hindsight declare how obvious the signs were. The best strategy is still to diversify your investments, keep enough emergency assets to ride the wave, and not worry about it.

Completely agree with this mindset. All the non-cash assets and investments I hold onto I intend to keep for over 20 years. Short term corrections in the market even as bad as 2008/9 don't concern me. As long as you're not speculating debt against market performance and have emergency cash on hand you can hold and buy the assets at a lower valuation.

Re: What to Worry About in This Surreal Bull Market

#95

Post by sdljfslkjfdsj »

cm2187 wrote: post #36

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.

It's scary what QE did. Inflated the largest stock market bubble & bond market bubble at the same time. While most portfolios are split across them for diversity.

It's more likely they both get crushed unless of course bonds continue to do what they've done in the past meaning nominal yields go to -3% & real yields -5%. It's possible I guess.

Re: What to Worry About in This Surreal Bull Market

#96

Post by snappyTertle »

TheAdamAndChe wrote: post #31
snappyTertle wrote: post #6

Earlier quoted context omitted.

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 forei…

Warren Buffet is one of the world's greatest investor and what he says about gold makes sense. However, there is more than one way to invest. Buffet has made fortunes taking a fundamentalist approach and values companies. There are also other successful investors that try to predict macro trends.

I also suggested foreign assets that are not holding onto a lot of US debt.

Re: What to Worry About in This Surreal Bull Market

#97

Post by sdljfslkjfdsj »

antouank wrote: post #25
rebuilder wrote: post #23

Earlier quoted context omitted.

Without defining a timescale, yes, it's very improbable. Feedback loops tend to develop in the markets, where eventually asset prices rise because people buy the assets since they've been rising for a long time. If nothing else happens, that at least is sure to lead to a crash at some point. Now, whether there's probably going to be a crash in the next 10 years is not something I'd care to bet on, although the odds a…

I guess I meant that looking back in history, I'd say there's a good chance that we'll start a world war, or upset the climate or something, and that will "crash" economy, not economy itself.

Sanctions have always been a pretty good indicator of war when levied from one sovereign to another. That indicator has probably gone from flashing yellow to red recently.

Re: What to Worry About in This Surreal Bull Market

#98

Post by junkscience2017 »

mathgeek wrote: post #14

The next market recession will happen the same as the previous ones: some lucky people will predict it, most won't, and everyone will in hindsight declare how obvious the signs were. The best strategy is still to diversify your investments, keep enough emergency assets to ride the wave, and not worry about it.

exactly! you should really only be worried about a need to time some action if you are very close to retirement. otherwise just watch and wait, markets tend to rise and they will rise again eventually.

Re: What to Worry About in This Surreal Bull Market

#99

Post by junkscience2017 »

jreynojustin wrote: post #94
mathgeek wrote: post #14

The next market recession will happen the same as the previous ones: some lucky people will predict it, most won't, and everyone will in hindsight declare how obvious the signs were. The best strategy is still to diversify your investments, keep enough emergency assets to ride the wave, and not worry about it.

Completely agree with this mindset. All the non-cash assets and investments I hold onto I intend to keep for over 20 years. Short term corrections in the market even as bad as 2008/9 don't concern me. As long as you're not speculating debt against market performance and have emergency cash on hand you can hold and buy the assets at a lower valuation.

but frankly even trying to time a bottom as a buying opportunity can be dangerous, because it can prevent you from making common sense investments at decent prices.

Re: What to Worry About in This Surreal Bull Market

#100

Post by junkscience2017 »

ronnypostsstuff wrote: post #32

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.

you should only be trying to reduce the harm of a recession if you plan on liquidating assets in the near term. if you are under forty and saving for retirement, do nothing...the recession will be far in the rear view mirror by time you want to sell
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