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How This Ends

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Re: How This Ends

#151

Post by largbae »

omginternets wrote: post #2

I 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?

Buy an index fund and when the market is down try and buy more.

If you do wish to do something to actively manage things, try giving Nassim Taleb books a read, or just read about his or Mark Spitznagel's investment strategy. They also keep 97% of their money in an index fund, but the other 3% are slowly wasted away buying far out-of-the-money PUT options on boring stocks that are very cheap to buy because they'll "never happen". And most of the time, they lose that money. But when COVID hits, or airplanes crash into famous buildings, or , those little never-gonna-happen options pay for all the damage to the 97%.

Their core theory is that humanity systematically underestimates the probability of very rare events. So it's not about timing the market, it's about using this exploit in human psychology to reduce or eliminate your "risk of ruin" from very rare events.

Re: How This Ends

#152

Post by 55555 »

EGreg wrote: post #130
fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

Why would bonds and cash be wrecked? You even say that bonds would be a good deal

Cash would be wrecked due to inflation. However it should be less wrecked than other asset classes in the short term. I know nothing about bonds so I also hope they reply.

Re: How This Ends

#153

Post by RockyMcNuts »

natly wrote: post #71

Getting really annoying to have to keep track of macro events affecting my life year after year instead of just being able to live a normal peaceful life.

imagine being like 85 and having lived in China through WW2, revolution, famine, cultural revolution, and then the last 30 years of growth and prosperity. a lot of places have to worry about global macro and history, anyone who doesn't is living a charmed life and maybe a fool's paradise.

Re: How This Ends

#154

Post by lettergram »

I kind of disagree with the analysis, largely because there’s now a large block of the world separated from western commerce.

Russia isn’t purchasing goods, yet the west is giving them wealth for oil, natural gas, wheat, etc.

That’s effectively wealth leaving the system and entering there’s.

More over, the west is increasingly looking at China as a threat AND China has locked down a large amount of economic output.

This is just starting imo and it’s not likely to improve for the time being.

In the 70s and 80s the US had a large manufacturing base and purchasers around the globe.

Today the largest exporter is China and most nations have china as their largest import. China is supporting Russia and looks like their looking to leave the western financial system. This is on a downward spiral far different than the 70s and 80s and I don’t see it reversing until the market bottoms out at its new size (much smaller than previously).

Re: How This Ends

#155

Post by lukeramsden »

jeffbee wrote: post #136
ChrisMarshallNY wrote: post #83

> I would be planning to ride this thing out for at least eighteen months or more. I'm betting more like three to five years. I was talking to a friend (another old guy, like me, but really rich, unlike me). We've both been through at least two recessions (big, nasty ones, with teeth and claws). We realized that there's an entire generation of folks; many running companies, that have never seen a real bear market. It…

How could there be a whole generation of CEOs who never saw a recession? Are there 13-year-old CEOs?

I would imagine ChrisMarshallNY means they weren't running companies when the last recession hit, not that they literally weren't alive....

Re: How This Ends

#156

Post by ModernMech »

cryptica wrote: post #33

Global economic problems were not caused by COVID19; it was just a convenient opportunity deflect blame away from more fundamental issues. One of the main real problems is that a decade of near 0% interest rates had led to money printing on such a scale that certain activities which would otherwise not have been profitable were able to be profitable (in nominal fiat terms)... But while these activities were reaping h…

> For 10+ years, we trained ourselves to function in a totally dysfunctional environment and learned all kinds of lessons which only make sense in the context of that dysfunction.

For me, cryptocurrencies and Web 3.0 are the culmination and perfect distillation of this whole era. Interested to see how they weather this storm. I heard a commercial the other day which stated along the lines "have you ever wished you could invest your retirement account in crypto? Well now you can!" That's when I knew the shark has officially been jumped.

Re: How This Ends

#157

Post by ryanSrich »

fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

How does inflation slow if rates aren’t hiked? Isn’t the only means of combating inflation raising rates?

Re: How This Ends

#158

Post by bittercynic »

jeffbee wrote: post #136
ChrisMarshallNY wrote: post #83

> I would be planning to ride this thing out for at least eighteen months or more. I'm betting more like three to five years. I was talking to a friend (another old guy, like me, but really rich, unlike me). We've both been through at least two recessions (big, nasty ones, with teeth and claws). We realized that there's an entire generation of folks; many running companies, that have never seen a real bear market. It…

How could there be a whole generation of CEOs who never saw a recession? Are there 13-year-old CEOs?

Recessions don't always hit you so hard if you're not an adult with a career and bills.

Re: How This Ends

#159

Post by nemo44x »

tempsy wrote: post #78
fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

Target shocked investors because not only did they suffer from rising costs due to inflation that they are currently subsidizing by not meaningfully raising prices but because they reported rising inventory in discretionary spending categories as consumers pull back likely due to higher prices they are facing nearly everywhere. This has more to due to impact of inflation and less so just a function of a dividend and…

Credit card debt is extremely high right now and subprime loan defaults are rising fast. In essence, a lot of people are tapped out.

Re: How This Ends

#160

Post by WalterBright »

lukeramsden wrote: post #146
WalterBright wrote: post #114

Earlier quoted context omitted.

The current government spending sprees are not your parents' and grandparents' fault.

Depends how old you are. Even the youngest member of the UK cabinet is old enough to be my father, but the real decision makers are old enough to be my grandfather. I don't keep close track of US politicians but as far as I can tell, its even worse there.

Think about who the current generation voted for. When politicians are voted in because of their fiscally irresponsible proposals, who is really to blame?

People are voting themselves money out of the treasury. This is the result.

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