How Covid brought the future back

Post by rsynnott » Sat, Feb 13, 2021, 4:59 PM UTC

anonisko wrote: post #5

Animats wrote: post #4

In fact, some economists continued to argue after 2000 that “bubble” is a meaningless category. Uh oh. "Stocks have reached a permanently high plateau" - Irving Fisher, economist, early October 1929.

There is something different this time. People en masse have started using the S&P 500 and other index funds as a long term store of value. Large amounts of money buy these stocks every pay period with zero regard to performance or current market conditions. As far as I'm aware, this has never happened before. We don't know how this experiment will change the market long term or whether it will eventually collapse.

Post by jfengel » Sat, Feb 13, 2021, 5:17 PM UTC

CuriouslyC wrote: post #35

baxtr wrote: post #30

Earlier quoted context omitted.

It’s different every time, isn’t it? World War II was different, the oil crisis in the 70s was different, debt in the 80s, doctom bubble in the 90s, the financial crisis was really different, and now this pandemic and the sheer volumes of money. It’s different every time, but economic growth has been a constant and tied to this are ultimately the prices of securities. That’s not gonna be different. So it’s a very san…

Index funds are a good, safe set and forget option. In boring times, the performance is not much worse and even sometimes better. In times of upheaval though, the high volatility makes active trading MUCH more profitable.

Post by [deleted] » Sat, Feb 13, 2021, 5:23 PM UTC

alisonkisk wrote: post #41

cblconfederate wrote: post #25

Earlier quoted context omitted.

Saving the world economy from a pandemic and creating the equivalent of a vaccine printer = 2x their stock price. If anything i d say investors are being pessimistic

Or they realize that the vaccine is temporary and vaccine companies aren't able to extract rent from saving the economy, due to either competition or government/social pressure.

Post by Animats » Sat, Feb 13, 2021, 6:18 PM UTC

pm90 wrote: post #11

anonisko wrote: post #5

Earlier quoted context omitted.

There is something different this time. People en masse have started using the S&P 500 and other index funds as a long term store of value. Large amounts of money buy these stocks every pay period with zero regard to performance or current market conditions. As far as I'm aware, this has never happened before. We don't know how this experiment will change the market long term or whether it will eventually collapse.

You're absolutely right, its not the same and it will likely fail in ways we can't predict just yet. The 2008 crisis taught the US Federal Reserve how to respond to an economic crisis effectively, and they've been pretty successful at managing the current one. Note that Fed's main concerns are macroeconomic, so their assistance necessarily goes mostly to larger corporations and financial institutions, which seem to b…

Post by jfk13 » Sat, Feb 13, 2021, 6:30 PM UTC

CuriouslyC wrote: post #35

baxtr wrote: post #30

Earlier quoted context omitted.

It’s different every time, isn’t it? World War II was different, the oil crisis in the 70s was different, debt in the 80s, doctom bubble in the 90s, the financial crisis was really different, and now this pandemic and the sheer volumes of money. It’s different every time, but economic growth has been a constant and tied to this are ultimately the prices of securities. That’s not gonna be different. So it’s a very san…

Index funds are a good, safe set and forget option. In boring times, the performance is not much worse and even sometimes better. In times of upheaval though, the high volatility makes active trading MUCH more profitable.