471–480 of 532 posts
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Basically what Taleb describes as Skin in the Game: >"Don’t Tell Me What You Think, Tell Me What You Have In Your Portfolio"
Then again, Taleb has little to no respect for most professional investors.
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So, I actually have an MS in Quant Finance despite having worked in tech my whole career. There's an old saying, "during a time of crisis all correlations go to 1". People found this out the hard way in 2008. There are all sorts of risks that you can't hedge for or that negate hedges you have in place for other risks, counterparty risk being one of the better known ones.
This hit home for me during the mini-crash a year ago. I was convinced assets like bitcoin or gold or bonds would hold value when the stock market tanked but instead saw everything fall at the same time. I understand the concept of undiversifiable risk, but seeing it play out in practice was eye opening.
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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From what I can tell, currently WSB is riding the bubble. Or rather their thesis is that a short squeeze will happen. In some conversations they try to justify that the company will actually turn itself around using the capital raised from selling the new generation of consoles, but quickly the conversation turns to the prospect of the squeeze. In other words, most people who are buying GME from WSB advice aren't the…
> but it seems like a hedge fund can just buy the shares from the people they borrowed from That's not how it works. A short position is basically the contract to deliver a stock regardless of its price at that point, so neither the short holder nor the party that gave them the stock in the first place actually hold that stock anymore. Now I don't know this exactly and I am not an expert, but I wouldn't be surprised…
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From what I can tell, currently WSB is riding the bubble. Or rather their thesis is that a short squeeze will happen. In some conversations they try to justify that the company will actually turn itself around using the capital raised from selling the new generation of consoles, but quickly the conversation turns to the prospect of the squeeze. In other words, most people who are buying GME from WSB advice aren't the…
When you know CompanyA fires a bunch of people, the price goes up because of the perception that the company will have more capital to leverage. Knowing that an event has happened or expect the consequence of an event (CompanyA gets sued for patent violation) to have an effect on the company, changes the stock price through participation. GME is an interesting case where the event is perceived to be a complex situati…
In other words, when the guy that started it all (Roaring Kitty/DFV) testified before congress that the only reason he was buying GME was because he fundamentally thought they were going to be a profitable corporation, that was bullshit. He talks a whole lot about short squeezing the stock elsewhere, so his denial that that's why he did it seems to me to be a lie. On a personal level, he seems shady as hell and the whole thing seems like a setup for others to be left holding the bag.
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> There's the climate crisis, which is the root cause of the migration crisis. The driver of that is more like unfree markets which always result in mass poverty and misery.
You might want to define unfree markets because American lives with regards to some key metrics seemed to improve more notably when it's markets were comparatively less free in the post ww2 era and china is also doing quite well and manage to get trough the 2008 financial crisis unscathed with it's application of Keynesian economics compared to US/EU.
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It's hard to tell if this post was satire or something the author genuinely believes.
I was trying to figure this out myself. I don't think you need to stockpile 10 years worth of firewood because firewood may be too expensive in 9 years. I think this is insane on a few levels, but to each their own.
Buying stuff you're going to need later is the opposite of speculation, not zero sum because it puts people to work to create something tangible and right now you get a better return than a lot of safe assets like bonds.
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This hit home for me during the mini-crash a year ago. I was convinced assets like bitcoin or gold or bonds would hold value when the stock market tanked but instead saw everything fall at the same time. I understand the concept of undiversifiable risk, but seeing it play out in practice was eye opening.
Long term US Govt. Bonds like VGLT did very well, increasing in value, in both 08 and Mar '20 covid crash.
I wonder what TIPS did during the same timeframe actually.
EDIT: I looked at VGLT and the mean annual return is extremely low, roughly 0.75%. I like the seemingly negative correlation with equities but I'll need to do some modelling to see if it's worth the massive hit in average expected return.
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Forcing a fiscal crisis is a great way of accomplishing some political goals so I wouldn't be complacent about this risk.
Fair enough — I’d wager large city bankruptcies remain quite possible under the next GOP Administration. The most liberal Republican POTUS of my own lifetime said “No” to NYC: https://www.nydailynews.com/new-york/president-ford-announce...
https://www.mcconnell.senate.gov/public/index.cfm/pressrelea...
> “I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated. You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”
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I'm not pointing to his commentary on Bitcoin or whatever. I was just stating a fact, that Dimon isn't considered brilliant by any Mark by industry insiders in finance, just lucky during 08. He has been wrong on a lot of things, even though I actually agree with his crypto thesis.
I’m not sure what you mean, his bank was the strongest and most highly capitalized during 2008. He famously had to be brow beaten into accepting federal bailout money. And brilliant doesn’t mean perfect. he’s had his share of mistakes, but his business record is one of the best.
2.) Where do you get this info that he was "brow-beaten" into accepting Fed money? Many of the banks, including others such as Wells Fargo and Boa didn't need the money either. That was just Hank Paulson's way of compensating them for the really expensive acquisitions, which none of the banks wanted to do really (JPM got Chase, Wells Fargo got Wachovia, BoA got Merrill Lynch, Buffett got Goldman Sachs and Lehman was left to die).
3.) There are way more brilliant bankers and financiers than Dimon in the financial industry. Steven Schwarzman and Peter Peterson built a behemoth investment firm from the ground up. Sergio Ermotti just engineered one of the best turnarounds for a big bank at UBS. Blankfein and now Solomon effectively shifted GS from their S&T desks to give more power to the Strats Tech teams, effectively changing the culture at GS, a sector where JPM is effectively lagging in spite of being the largest bank with the biggest resources. And this is not even taking into account some of the more brilliant bankers abroad.
Compared to nitwists like Thain or Corbat or whoever, sure Jamie Dimon beats them. But there are way more brilliant bankers who actually built something. Jamie is the classic example of happened to be at the right place at the right time.
I honestly don't know how this hero-worship of Dimon came to be - maybe it's those memes they have running around.