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When buying the dip doesn’t work: An analysis of the dot-com crash

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Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#41

Post by rfreiberger »

mwattsun wrote: post #25

I lived through the dot-com crash and got out safely after hearing something so ludicrous that I had to ask myself "How insane does this industry have to be for someone to think they can build a high growth internet company out of home cement delivery?" My memory may be playing tricks, but it was something like that. After 2008 I became interested with crashes throughout history. There are so many fascinating little…

One of the big wake up calls I had during that time was a friend telling me about Webvan. At the time I was younger and not investing so the conservation was mostly around how great the food was, cheaper than up scale stores and they delivered. The echo that reflected much of the dot com era was as he mentioned "how do they make money doing this". The wild part is the wages they paid was higher than other delivery drivers, I worked in a warehouse at the time and frequently heard of seasoned UPS and FedEx drivers leaving to drive for the company.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#43

Post by 01100011 »

SNL skit from the dot-com era: https://twitter.com/WallStreetSilv/status/152279877872567500...

Does anyone have a solid understanding of how QE affects the economy? From what I've read, QE basically stays locked in the financial system as interbank cash. I think this can affect short term interest rates, and therefore affect lending(and money creation by the big banks), but otherwise that money doesn't really drive inflation, at least not directly.

Based on that assumption, the real driver of inflation is the $5.4T in stimulus combined with supply-side shortages.

It's looking to me like inflation is here to stay. On-shoring, demographics(aging boomers), the end of cheap energy and many materials, and other factors seem to be putting the US on a different course than we've been on for ~100 years.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#44

Post by danielmarkbruce »

refurb wrote: post #36
nathanvanfleet wrote: post #18

Sad to think that investing in the stock market, which I have only been able to financially over the last 5 years might have been much riskier than I might have previously thought. What I previously thought as "okay I just leave it in the stock market for a bit of time to recoup" is something I am now realizing would likely have to be 10+ years. It's kind of funny because I was getting shaky about having money in the…

My grandfather had $3M invested in the market in 2007. Lost $1M at the bottom in 2008, but didn't do anything other than rebalance. Now worth $8M. Either you fret over every price move and likely buy/sell at the worst times, or you invest with a long-term vision and stop tracking the price moves everyday.

Unfortunately for every one of these folks, there are a handful of folks who panic sold and still haven't made it back...

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#45

Post by throwaway_1928 »

sharkweek wrote: post #37
mwattsun wrote: post #25

I lived through the dot-com crash and got out safely after hearing something so ludicrous that I had to ask myself "How insane does this industry have to be for someone to think they can build a high growth internet company out of home cement delivery?" My memory may be playing tricks, but it was something like that. After 2008 I became interested with crashes throughout history. There are so many fascinating little…

Have you seen the movie Margin Call? There’s a great scene where the CEO of a Goldman-style bank is recapping the last 100+ years of global financial collapses and he mentions, “we just can’t help ourselves.” https://youtu.be/LtFyP0qy9XU One of the best banking movies I’ve ever seen. Jeremy Irons absolutely nails his role.

Will Emerson: Jesus, Seth. Listen, if you really wanna do this with your life you have to believe you're necessary and you are. People wanna live like this in their cars and big f-in' houses they can't even pay for, then you're necessary. The only reason that they all get to continue living like kings is cause we got our fingers on the scales in their favor. I take my hand off and then the whole world gets really f-in' fair really f-in' quickly and nobody actually wants that. They say they do but they don't. They want what we have to give them but they also wanna, you know, play innocent and pretend they have no idea where it came from. Well, thats more hypocrisy than I'm willing to swallow, so f em. F normal people. You know, the funny thing is, tomorrow if all of this goes t-s up they're gonna crucify us for being too reckless but if we're wrong, and everything gets back on track? Well then, the same people are gonna laugh till they p-ss their pants cause we're gonna all look like the biggest p-ssies God ever let through the door.

Seth Bregman: Do you think we're gonna be wrong?

Will Emerson: [long pause] No, they're all f-d.

(edited for language)

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#46

Post by anonporridge »

nathanvanfleet wrote: post #18

Sad to think that investing in the stock market, which I have only been able to financially over the last 5 years might have been much riskier than I might have previously thought. What I previously thought as "okay I just leave it in the stock market for a bit of time to recoup" is something I am now realizing would likely have to be 10+ years. It's kind of funny because I was getting shaky about having money in the…

Are you ignoring dividend reinvestment creating compounding growth?

Even god couldn't beat dollar cost averaging, https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#47

Post by alar44 »

refurb wrote: post #33
pdevr wrote: post #28

Index investing will work, if you live for a long time. The problems are, we do not live infinitely, and the average person does not have the stomach to see their investment going down for years, unless that investment is small enough to tolerate (in which case it is not enough to make a big difference, for most people). What I think will work - not claiming that it will actually work - based on history: Invest in co…

Your strategy sounds like "pick winning stocks"? A strategy which has been show to produce (on average) worse returns than index investing. Index investing has produced a ~200% return in the past 15 years (from 2007 peak to now). Not sure what you mean by "a chance of seeing a profit in your lifetime".

Parent has literally no idea what he's talking about. Investing in indexes has always worked. Always. Over all time periods. Since they existed.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#48

Post by alar44 »

pdevr wrote: post #28

Index investing will work, if you live for a long time. The problems are, we do not live infinitely, and the average person does not have the stomach to see their investment going down for years, unless that investment is small enough to tolerate (in which case it is not enough to make a big difference, for most people). What I think will work - not claiming that it will actually work - based on history: Invest in co…

I'm sorry, when did investing in indexes not work? No idea what you're talking about.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#49

Post by anonporridge »

alar44 wrote: post #48
pdevr wrote: post #28

Index investing will work, if you live for a long time. The problems are, we do not live infinitely, and the average person does not have the stomach to see their investment going down for years, unless that investment is small enough to tolerate (in which case it is not enough to make a big difference, for most people). What I think will work - not claiming that it will actually work - based on history: Invest in co…

I'm sorry, when did investing in indexes not work? No idea what you're talking about.

Index investing has really only existed in common practice since the 1970s. You can simulate back further and do imaginary index investing, but we really only have 50 years of actual history with it. It's a very young experiment.

One thing that a lot of people are worried about is if the surge of people and money getting blindly pumped into broad basket index funds as if it was a savings account (because those have negative real yield) will itself distort the market in weird and unpredictable ways. It's entirely possible that it breaks the entire system and creates the mother of all crashes.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#50

Post by anonporridge »

vitus wrote: post #2

> Buying the dip isn’t some secret strategy. Time is the secret strategy. Ah yes, the good ol' "time in market beats timing the market". Of course, that assumes that markets trend upwards in the (very) long term. Which... if past performance is any indicator of future performance [0], the past 100 years provide a fairly compelling narrative. [0] Another mantra: it's not.

If the measuring stick you use is getting shorter every year by design (monetary expansion/inflation) then you can be quite certain that the market will trend upwards for as long as you use that unit of measure.
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