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Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
61–70 of 163 posts
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#62This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…
What's interesting about Hussman these days is that he always claims that he started using a revised method for market timing since 2014. (Yes it somehow took him ~5 or 6 years to "revise his method", all the while his customers were paying. Must have been some spectacular calculations...)
Now we're 3 years into the new period, and he's still loosing money hand over fist. Not even breakeven due to being early and putting on costly hedges. But really loosing money.
I know how hard timing is. And I agree that we're in uncharted waters wrt to central banks buying bonds and the ridiculous complexity of modern finance.
But it's hard to imagine exactly who his customers are. Just staying in cash would have performed much better than going with Hussman.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#63Understanding Bitcoin is hard. Here is a response to some of the criticism: > Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ > The system already features a rather steep cost per transaction, and hardly any of those transactions are for the purch…
>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin whi…
Probably not what OP meant, but mining pools are a way to address that. You team up with N other miners, and if one of them finds a solution then the reward is divided among the pool based on the work that was contributed
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#64Understanding Bitcoin is hard. Here is a response to some of the criticism: > Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ > The system already features a rather steep cost per transaction, and hardly any of those transactions are for the purch…
There seems to be no timeline for LN’s release, and no sense of urgency from the devs. It feels very amateurish. There’s a good chance that by the time it comes out Bitcoin could be left in the dust by a different crypto currency.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#65Ok, so if you think the hell thing is going to hell, just go SHORT, it's one click away. How simple is that? And that's why these predictions never pan out, if it's SO EASY to make a ton of cash off a crashing market, then EVERYONE will go short, since it's so EASY to make money. And that's why markets are generally stable and it's what humans do best, we go LONG. :-)
> Ok, so if you think the hell thing is going to hell, just go SHORT, it's one click away. How simple is that?
Uh, how? Also, the hard part about making money on a short is knowing WHEN the price is going to crash. You can call an obvious speculative bubble what it is without knowing exactly when it's going to pop.
> if it's SO EASY to make a ton of cash off a crashing market, then EVERYONE will go short, since it's so EASY to make money
If the market is already crashing, why would someone sell you the stock to short sell? Don't you have to short before the price starts to drop?
> And that's why markets are generally stable and it's what humans do best, we go LONG. :-)
What?
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#66What matters more - the size of the theatre or the size of its exits?
Coinbase sent me an email saying that they cannot guarantee uptime during high volatility. The exits are locked.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#67This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…
This company has ~$750mm under management, and has several funds that manage to have both a) high expense ratios and b) horrible performance over the short and long terms. Serious question, for those who work in finance: how do companies like this stay in business? Shouldn't the transparency of their poor performance have long since driven them out of business? Semi-serious question, also for those who work in financ…
Funds like this tend to outperform in bad to normal markets and underperform in highly bullish markets as they have more discipline around valuation. Warren Buffett famously underperforms in very bullish markets as well
The pitch of funds like this is that for a few years out of 10, they'll underperform, and then massively outperform when everyone else is sucking. People invest in funds like this (note I don't know too much about his fund in particular but know many funds with similar styles) because when all the people who think they are expert investors bc they rode a bull market crash, these funds will be making lots of money
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#68Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#69Earlier quoted context omitted.
because of the comment or the article ?
The comment showing me whether this guy knows what he is talking about or not.
The comment didn't include a good metric of whether the author knows what he is talking about.
How do his funds perform in bad markets? That is an important part of diversifying a portfolio. Funds that outperform the market in good markets are likely to fall even more than the rest of the market in downturns.
It doesn't matter if you make out like a bandit during a boom if you aren't able to preserve much of that accumulated wealth.
Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin
#70There is a lot to dissect but I would focus on labor force. Our labor force used to be all human labor. Now it includes a large number of bots, both physical and software, that take care of business. The (output = labor . x) doesn't work anymore.
Great. But that begs for more questions. Money is a unit of trade between humans for getting something from the other human in exchange for your money. If an entire class of humans is no longer needed, how will they receive money to pay for what they need? How much is your legal tender worth when large swaths of the country whose denomination you claim your wealth from are no longer "part of the economy"?
Not that I have answers to these questions. But we do live in interesting times.