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The stock market and economy have parted ways

washingtonpost.com

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Re: The stock market and economy have parted ways

#81

Post by marcrosoft »

ed25519FUUU wrote: post #50
secondcoming wrote: post #25

Earlier quoted context omitted.

I'm no gold bug, but turn some of your cash into gold.

I go back and forth on gold a lot. I keep a very small amount of my money in gold, but I’m literally thinking “if things really get down to it, I can trade this for food” But that type of mental exercise does not work well for many people. Especially imagining a system where our fiat currency is effectively useless.

You don’t need a complete meltdown to profit off of gold. You just need a little pandemic and some inflation to see a spike. The trick with gold is to rebalance it when it spikes. It’s not a very good “buy and hold forever” asset class.

Re: The stock market and economy have parted ways

#82

Post by ed25519FUUU »

whatshisface wrote: post #63
ed25519FUUU wrote: post #50

Earlier quoted context omitted.

I go back and forth on gold a lot. I keep a very small amount of my money in gold, but I’m literally thinking “if things really get down to it, I can trade this for food” But that type of mental exercise does not work well for many people. Especially imagining a system where our fiat currency is effectively useless.

Expecting that you'll be able to trade gold for food is assuming that the state after the collapse will fall into a very narrow band of "collapsed enough that the financial system is gone" and "not so collapsed that the food supply is gone." You might even call it... the Goldilocks zone. ;)

I guess total collapse is something I don’t particularly worry about, since I won’t be here to worry.

I think partial collapse is more likely scenario (of the two).

Re: The stock market and economy have parted ways

#84

Post by api »

erentz wrote: post #65
danhak wrote: post #38

Earlier quoted context omitted.

This trope gets repeated over and over but it just makes no sense. Volatility is risk. What rational investor says "interest rates are too low, I MUST deploy my capital into a market that is seeing wild 30% gyrations from month to month instead of parking it safely while this global crisis plays out."

A very large percentage of the market is required to achieve a certain return. Think insurance companies. Giant pension plans. Etc. They have all been forced further and further out the risk curve over the past decade due to low interest rates.

Everything is being forced further out on the risk curve. Everything.

This also explains wacky basketcase unicorns like WeWork, perpetually unprofitable companies raising round after round, the continued existence of the cryptocurrency world in spite of it being like 90%+ scams, real estate going up in cities where >25% of people are behind on their mortgages, etc. There's no "alpha" anywhere. Money is chasing its tail.

All this QE is just going to give us is more asset bubbles. The financial economy is completely detaching from the real economy and becoming a pure fantasy LARP for the rich and of course governments.

Re: The stock market and economy have parted ways

#85

Post by ryandvm »

ed25519FUUU wrote: post #50
secondcoming wrote: post #25

Earlier quoted context omitted.

I'm no gold bug, but turn some of your cash into gold.

I go back and forth on gold a lot. I keep a very small amount of my money in gold, but I’m literally thinking “if things really get down to it, I can trade this for food” But that type of mental exercise does not work well for many people. Especially imagining a system where our fiat currency is effectively useless.

If things have gone to shit so badly that people are trading food for gold, I hope you bought guns too because very unfair people are going to be coming for your gold.

Re: The stock market and economy have parted ways

#86

Post by umvi »

quickthrowman wrote: post #62

For the last week or so I’ve been buying ATM QQQ call spreads and rolling them up and out as they become ITM. I’m up 100% in one week, this is silly.

Mind expanding the acronyms and explaining what exactly you've done? I'm still an investing novice.

Re: The stock market and economy have parted ways

#88

Post by toomuchtodo »

danhak wrote: post #77
javert wrote: post #68

Earlier quoted context omitted.

> instead of parking it safely while this global crisis plays out Because interest rates will never go back up, or if they do, they will be counterbalanced by inflation. This is the view of Ray Dalio at Bridgewater and (presumably) many other very smart people. I'm not that smart, but I agree. Thus, cash and cash obligations are no longer stores of wealth. Equities are, unfortunately. High volatility is just the pric…

Forgive me if I say this sounds awfully like the "new paradigm" / "this time it's different!" phase of a bubble.

But it is different this time. Productivity growth is slowing [1], people are aging rapidly (in the US, baby boomers are retiring at a pace of 10,000 people per day, 5,000 of them die per day) [2], and secular stagnation is taking hold in most first world countries [3]. Sort of strange to expect today or the next 50 years to look like the last 50 years.

[1] https://scholar.princeton.edu/sites/default/files/ernestliu/...

[2] https://research.stlouisfed.org/publications/economic-synops...

[3] https://web.archive.org/web/20200629061702/https://larrysumm...

Re: The stock market and economy have parted ways

#89

Post by hellisothers »

ed25519FUUU wrote: post #50
secondcoming wrote: post #25

Earlier quoted context omitted.

I'm no gold bug, but turn some of your cash into gold.

I go back and forth on gold a lot. I keep a very small amount of my money in gold, but I’m literally thinking “if things really get down to it, I can trade this for food” But that type of mental exercise does not work well for many people. Especially imagining a system where our fiat currency is effectively useless.

I mean, in world where you’re trying to trade gold for food gold is a “fiat” currency as well. It has no intrinsic value and if we’re struggling to get food and water I’m not going to want to accept anything for my food except strict bartering.

If you’re buying gold for the end of the world you’d be better off buying cigarettes and tiny bottles of booze.

Re: The stock market and economy have parted ways

#90

Post by currymj »

gas9S9zw3P9c wrote: post #67
currymj wrote: post #18

concretely, how much does the sentiment of retail investors actually matter to prices -- in general for the whole market, and for specific stocks that dumb retail investors get excited about (Tesla, Hertz, or whatever)? I have no idea what the answer to this question is or even how to formulate it in a clear, answerable way. But it seems very important! It seems that stock prices move, newspapers publish a narrative…

You're asking a great question. I used to work as a professional trader and the answer is that probably nobody really knows. Like you said, any explanation you hear about prices moving is just a narrative fallacy. People love hearing simple explanations to complex questions like "why did X price move" when in reality there is no such thing. The stock market is an incredibly complex interconnected system, with so many…

in some limited cases it seems like maybe we can be pretty confident that retail investors "caused" a price move. even if professionals magnify it, the core thing would not happen without retail investors. Like the Hertz thing, or "Long Blockchain Corp", or when people get confused over ticker symbols.

but I agree it does seem sort of unanswerable in general. very odd, then, to see people making these public assertions with total confidence.

I am curious: based on your experience, do you think that, in principle, an omniscient observer of all transactions on stock exchanges and who made them could answer questions like this in many cases? If so, what concrete things would they hypothetically want to look at to figure it out?

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