How This Ends
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How This Ends
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Re: How This Ends
#2I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?
Re: How This Ends
#3I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?
Be wary of anyone making firm statements about the future of anything. This article doesn’t do that.
This article is merely drawing similarities with past events and concludes:
> First, we need to see the economy slow down and inflation slow down. We need to see stocks bottom out and hang out there for a while. And we need to be patient. None of this is going to happen fast.
This seems reasonable. Wait and see based on variables that were important in the only comparable period in recent times.
Re: How This Ends
#4I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?
Take every major future scenario and make sure you have some idea of how your strategy and portfolio survives it. There is no difference between a useful and useless economic prediction in a highly uncertain environment — they’re all roughly plausible.
Re: How This Ends
#5I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?
You need to understand more about macroeconomics, monetary policy, ad government, along with studying past how past markets behaved under similar conditions.
History doesn't repeat but it rhymes becomes the mantra.
Re: How This Ends
#6I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?
You can't.
The best you can do is to build a market thesis that represents your views, try to find reasons that you are wrong to help harden / shape your views, and only then try to find others that believe the same way your thesis does to try to see how they predict.
Everyone has their own crystal ball, and everyone believes theirs is the right one. If you look at fintwit, you will see "the world is ending", "the worlds ended, we going up", and "lets wait and see". At least a few of them will get it right, to some extent or another. I dont think you can figure out at this time which is the right one.
So, best you can do is form your own thesis I think. I've formed mine. It helps me not panic when things are temporarily against me.
Re: How This Ends
#7I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?
This isn't much of a prediction. It's saying this correction is going to look like all the others. We had an overheated market in an inflationary feedback loop with pandemic relief, and that stopped, and now prices have corrected and we wait for growth to start again. That's... like predicting autumn will come some time after the end of summer.
The takeaway here is that there are no unique circumstances at play. This is a market cycle just like any other.
Re: How This Ends
#8I wonder how much irreparable damage the lockdowns did to the economy as we knew it before the pandemic.
The more subjective aspects of the economy are hard to map - are people motivated enough to work? Do they feel invested enough in the future to work? Have they been burnt out by the yoyo cycle of work/lockdowns? Was their industry severely damaged and they pivoted to other careers?
Like there’s a massive pilot shortage. I have friends who are pilots. They were already planning on retiring by 40 (pilots get paid very handsomely here) and starting a business. They just shifted their plans forward by 5 years instead of sitting at home and doing nothing. That’s two skilled captains the airlines will have to find replacements for.
I really don’t think anyone really sat down and thought through these issues when the lockdowns were announced. You can’t expect people to go from 100 to 0 and back to 100 over two years. People are not resources that can be put to use or discarded whenever you want.
Re: How This Ends
#9history doesn't repeat but it often rhymes is a useful base construct, how much do the macro differences between the 80s example cited in the post and today change the model?
we know the world is now much more interdependent, interconnected and moves at a faster pace, and that this can result in massive growth, but that we are also much more fragile to shocks.
does it also mean that post-shock 'new normals' or 'next normals' may be fundamentally different than the previous state - punctuated equilibrium type models?
Re: How This Ends
#10When governments rise the interest rate, is that the interest rate the government pays when you lend money to the government?