351–360 of 532 posts
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Cash is making money if your alternative is a negative yielding asset.
Yes, but the comment you’re replying to points to the fact that your yield on cash can also be negative due to (for example) having to pay to store the cold hard cash somewhere safe.
We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…
> We seem to have an entire generation of people who think "stonks can only go up" I'm not denying the existence of bubbles, busts, and crashes, but historically and on average, the stock market does only go up. This market is overvalued and will likely correct, but that doesn't mean it won't continue to rise on the aggregate.
Buying S&P, or the Apple, Amazon and Tesla ones is another story. Looking at the average can be misleading.
For me this type of analysis is always suspicious because it doesn't consider timing. How do I know that when I buy stocks I'm not buying at a peak, or when I need to sell them I'm not going to sell at the bottom. So I ran an analysis [1] where I just used random timing and checked what distribution would be. Turns out if you are long term investor (> 10 years holding period) it is more beneficial to hold stocks than…
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I don’t know a whole lot about professional investing, but if watching The Big Short has taught me anything it’s that the pros will say one thing publicly but do the opposite in private until it’s to their advantage to do a 180 and make their private stance actually public. Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. The following exchange fr…
It's great that you recognize professional investing isn't something you know a lot about. It's a bit concerning that people believe a hollywood movie has taught them how the industry works. Keep in mind how hollywood portrays "hackers" or "scientists" or "Russians" or whatever group is an outsider or opposition to the protagonist and realize they're doing the same to finance.
We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…
> Similar views were expressed about houses/real estate in 2007. Don't they always go up on average though? Even the much hyped 'housing crash' of 2008 only last for all of 3 yrs till 2011 after which they went zooming past the previous highs.
Maybe you think they should keep going up, for whatever reason, and you might be right. But that's different than the fact that they increased on average in the past.
We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…
Quite possibly you’re being too pessimistic.
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> Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. JPM Chase has 250K employees. Do you think Jamie was made aware every time the markets division took a hard look at crypto?
Considering he said in 2017 [0] that he would fire anyone trading Bitcoin for being "stupid", yes, the GP's astonishment about Jamie Dimon is well placed. [0] - https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-...
There are all sorts of arbitrage and correlation trades to be made in bonds, stocks and similar securities (mortgages) because they all have intrinsic values or maturity dates, etc. To protect the banks capital it’s important to restrict the types of trades allowed, and to disallow pure speculation.
Jamie in that article describes cryptocurrencies as pure speculation because they have no intrinsic value, which is why he said he’d never allow employees to trade them.
But one thing I believe about Jamie Dimon is that he has a sharp and flexible mind. If the newer innovations in the DeFi markets around crypto convince him he’s wrong about cryptocurrencies, he will turn on a dime. While still putting in adequate safeguards for his banks capital.
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The 401k concept has created a demand/supply imbalance and will continue to do so until as many people start cashing out as putting in. Massive government spending and, low interest rates, and other incentives have also dumped a lot of money in the market. Once these demand-increasing trends end, it will be all over. I'm amazed at how long the fiction has been sustained.
You are saying the market will go south when 401Ks as a trend stop?
The first condition creates a natural headwind to increase stock values. The current condition will reverse that.
We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…
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Markets do seem to only go up, but the stocks on the market today are very different from 10, 20, 30+ years ago. I know that poorly performing stocks are eventually removed from indices and exchanges and they are replaced with new ones. Is it the case the market always going up in the long run is actually due to survivorship bias?
Probably has more to do with the fact that society on the whole tends to build more than it destroys. More value is created over time than lost.
When does this become unsustainable?