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This is your brain on a crashing stock market

wsj.com

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Re: This is your brain on a crashing stock market

#11

Post by 1123581321 »

systemvoltage wrote: post #2

Take it with a grain of salt but I am hearing (through finance podcasts) that a lot of hedge fund managers and investment bankers are working alone from home and without physical proximity with their teams, the panic levels are setting in. I think it makes sense to me - when we are not physically banded together, we have a lost sense of safety and security.

What were their sources? My experience in finance is that physical groups of traders, advisors and analysts are prone to groupthink, a liability right now. A calm leader should still be able to enforce policy remotely.

Re: This is your brain on a crashing stock market

#12

Post by thephyber »

davidw wrote: post #3

I'm a lot more concerned about people's health and well-being. Once the health crisis passes, the rest will probably take care of itself.

Health includes some component of hope and perception of security. It’s not clear to me that a person living check-to-check in a rented property with no stable income can remain healthy without economic stability. For better or worse, Wall Street news pervades our perception of whether times are good or bad.

Re: This is your brain on a crashing stock market

#13

Post by Retric »

aazaa wrote: post #7

No access to article, but an entire generation of money managers have grown up with the Everything Bubble starting in 2009, fueled by Fed largesse. They've never even seen a bear market, let alone a financial panic. Most have completely ignored the alarming rise in valuations and market distortions, engaging in extremely risky behavior for years on end.

Yea, looking at P/E ratios based before COVID most companies only fell to a reasonable level. I’m looking at the market and thinking it’s still a little high.

A rising or falling stock market is not inherently good or bad thing. It’s only really relevant as a prediction of future trends.

Re: This is your brain on a crashing stock market

#14

Post by mulm »

spking wrote: post #5

Lately I've been thinking about all of the "F.I.R.E." and "Boglehead" blogs and forums that have proliferated over the past 5-10 years. What percentage of those people are panicking over their plunging index funds vs. those who are ignoring the day-to-day chaos?

This is anecdotal but the few documentaries I’ve seen on the early retirement people have mainly been about living really cheap, learning useful craftsmanship skills for fixing/improving homes and growing/making a lot of their foods from the basic ingredients.

I think those skills will actually be rather useful now. A lot of them seem to be living off the revenue that talking about and selling their books on F.I.R.E. rather than the actual investments.

Re: This is your brain on a crashing stock market

#15

Post by qntty »

vkou wrote: post #4

And yet, if every investment (including cash, because there is a near-certainty of the government turning to inflation to solve all these problems) is crashing, then isn't it the case that nothing is crashing?

My investment in 100 pallets of toilet paper isn't crashing

Re: This is your brain on a crashing stock market

#16

Post by seanmcdirmid »

cdiddy2 wrote: post #10
somebodythere wrote: post #6

Earlier quoted context omitted.

But if financial assets are crashing in cash-terms, and cash itself is crashing in purchasing-power terms, financial assets are extra crashing .

Its hard to say that the USD is crashing, it seems to actually be too strong at the moment with everyone running towards it from other currencies https://www.tradingview.com/x/seCzFWI8/

It’s strength relative to other currencies is one thing, but if everyone is QEing at the same time, the dollar could still be weakening in absolute terms.

Re: This is your brain on a crashing stock market

#17

Post by maximente »

spking wrote: post #5

Lately I've been thinking about all of the "F.I.R.E." and "Boglehead" blogs and forums that have proliferated over the past 5-10 years. What percentage of those people are panicking over their plunging index funds vs. those who are ignoring the day-to-day chaos?

my takeaway from FIRE is that it's largely about getting your spending under control (easier to reduce spending by $50K than earn $50K post-tax) and then getting enough of a cushion to do something better for you personally or the world that might not pay as much as your old job.

so some people that did nothing but sit on the beach after FIREing may be uneasy, but a lot of people transition into other fields that just aren't necessarily as lucrative.

Re: This is your brain on a crashing stock market

#18

Post by davidw »

thephyber wrote: post #12
davidw wrote: post #3

I'm a lot more concerned about people's health and well-being. Once the health crisis passes, the rest will probably take care of itself.

Health includes some component of hope and perception of security. It’s not clear to me that a person living check-to-check in a rented property with no stable income can remain healthy without economic stability. For better or worse, Wall Street news pervades our perception of whether times are good or bad.

I'd focus on the immediate needs like food and rent and let stocks take care of themselves once things are better. Food and rent are a much more real and present anxiety than stock prices, even if the latter certainly does affect the 'mood'.
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