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How This Ends

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Re: How This Ends

#201

Post by soheil »

tlb wrote: post #118
soheil wrote: post #51

Earlier quoted context omitted.

By ignoring the day-trader hype? (shouldn't be that difficult to spot)

There are domains where I feel I can judge an argument solely on its content. Predicting the economy isn't one of them. While I can discard some bogus arguments, there are plenty of coherent and self-consistent arguments pointing in different directions. So I have to consider the source.

I'm still not sure why you'd weigh his opinion higher, he may be honest or have experienced more recessions than you have, but why not find an old columnist who doesn't lie? His lack of consideration for the other parts of the economy like real estate, etc. and his focus on startups to me seems like a handicap and not something that makes his economic predictions more accurate.

Re: How This Ends

#202

Post by SilasX »

hn_throwaway_99 wrote: post #95
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.

Do you really though? If you are a long term investor, just picking a couple of core asset classes and then rebalancing regularly (rebalancing is key because it is an automatic way of selling thing when prices are higher and buying when they are lower), and never paying attention to the news, it's a winning strategy.

All asset classes are down though, both low and high-risk balances are seeing about the same contraction.

Re: How This Ends

#203

Post by riku_iki »

datalopers wrote: post #197
riku_iki wrote: post #173

Earlier quoted context omitted.

You are switching topics. The point is that there will be plenty of funds inflow to support housing market.

Would you like to place a wager? I bet that the median home price in tech-centric metro areas (seattle, sf/bay, la, nyc) will decline by 10% or more in July 2023 versus July 2022.

10% is like small correction comparing to previous increase, and doesn't offset mortgage rate increase.

Re: How This Ends

#204

Post by rcpt »

riku_iki wrote: post #101
throwaway_1928 wrote: post #85

Earlier quoted context omitted.

> Bonds will be wrecked, stocks will be wrecked, cash is wrecked, even gold What will happen to the housing market?

People who bought houses will be fine, since they secured low interest loans, and will hesitate to sell because won't get good interest on next loan. This will cause low supply -> high prices -> people who didn't buy are very screwed: they will face high prices together with high interest.

Low interest rate doesn't mean low monthly payment

Re: How This Ends

#205

Post by SilasX »

throwaway_1928 wrote: post #119
shrimp_emoji wrote: post #109

Earlier quoted context omitted.

No airborne spread. Transmitted through sex. We're safe as houses. :p

In that case HNers are safe :-) But I am afraid it is is transmissible by 'respiratory droplets'. > "Monkeypox virus is transmitted from one person to another by close contact with lesions, body fluids, respiratory droplets and contaminated materials such as bedding." https://www.who.int/news-room/fact-sheets/detail/monkeypox

Old crypto joke: "Major STD outbreak; bitcoin users unaffected."

Re: How This Ends

#206

Post by [deleted] »

vintagedave wrote: post #171
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…

So for non-finance-experts, what should we be doing with our money? Investing in what? Keeping in the bank? It sounds from your comment like there is _nothing_ that won't be devalued, even gold. Is real estate worthwhile? (Note: I am in the EU not US.)

[deleted]

Re: How This Ends

#207

Post by kube-system »

TekMol wrote: post #191
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…

there is a risk free alternative to stocks How is holding a bond risk free? It is a promise to give you a certain amount of money at a certain time in the future. The value of that money depends on how scarce it is. The government constantly raises and lowers that scarcity at will. Sometimes the government decides to double the supply in just a few years: https://fred.stlouisfed.org/series/BOGMBASE So it seems highly…

“Risk” usually refers to default risk in financial terms. T-bills are generally considered to have zero default risk.

The inflation for two different assets traded in the same currency are equal, so there’s not much of a comparison to be made there.

Re: How This Ends

#208

Post by senthil_rajasek »

TekMol wrote: post #191
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…

there is a risk free alternative to stocks How is holding a bond risk free? It is a promise to give you a certain amount of money at a certain time in the future. The value of that money depends on how scarce it is. The government constantly raises and lowers that scarcity at will. Sometimes the government decides to double the supply in just a few years: https://fred.stlouisfed.org/series/BOGMBASE So it seems highly…

>How is holding a bond risk free?

No asset is risk free. Bonds are a relatively less risky asset.

>The government constantly raises and lowers that scarcity at will.

Nope. Notes, Bills, Bonds are auctioned.

Re: How This Ends

#209

Post by jbay808 »

gitfan86 wrote: post #93
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…

This sounds a bit like doom and gloom. While I don't disagree, it is important to look at AMZN after the dot com bubble burst. Traders fled, but people who believed in the company did very well.

If you bought in at the 2000 peak, it took about ten years to break even, and you'd have to have kept holding it through the 2008 crisis when you might have been losing your house.

Also, there were a lot of other companies that people believed in that didn't fare so well.

Re: How This Ends

#210

Post by ptero »

vintagedave wrote: post #171
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…

So for non-finance-experts, what should we be doing with our money? Investing in what? Keeping in the bank? It sounds from your comment like there is _nothing_ that won't be devalued, even gold. Is real estate worthwhile? (Note: I am in the EU not US.)

If you think that there is some major economic turmoil ahead with dropping asset values across the board (and I personally this is fairly likely), the general advice is to aim for a positive alpha. That is, if you are moderately well off or better, invest to "go down less than your neighbors". Assets across the board lose value, but if at the end of the fall you preserved a higher fraction of your money to invest than your neighbors and are willing to pick the best assets after the collapse you can reap huge benefits.

The counter argument to this is that the above approach absolutely requires an iron discipline. And without experience non-professionals are prone to making very costly mistakes (e.g., invest on feelings, double down inappropriately, etc.). So, a general audience advice is usually: do not invest money you need within 5-10 years and do not make rash decisions; it is better to ride this train down and then hopefully back up than jump randomly. And diversify (across countries, economies, asset classes, etc.).

Just my 2c; not an investment advice!

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