"In the early 80s" Ronald Reagan was elected President of the United States of America, Iran immediately gave up the hostages they'd been holding for over a year under Carter, and overall the world and the US rejoiced that a real leader was finally in charge of the US. That is what happened.
How This Ends
581–590 of 698 posts
Re: How This Ends
#582Earlier quoted context omitted.
> Traders fled, but people who believed in the company did very well. Yep, I did well, and I loved to show people AMZN stock price graph, like “can you identify the dot-com crash here?”. But I believed in the company then . Big question is: should I believe in the AMZN now ? Personally, I’ve stopped using Amazon when they started to support censorship - I’ve grown up in a totalitarian country and things likes censors…
Good questions. Can they maintain the high performance culture without large stock compensation? The best option I see following a similar path is TSLA. They currently have 2% of us auto sales. The energy business is tiny, AI/FSD is controversial, but if it works it will be worth a lot.
My question for TSLA bulls is how much of that future is already priced in? I have a hard time believing that it will 10x again.
Re: How This Ends
#583Re: How This Ends
#584Earlier quoted context omitted.
Have useful, rare skills. Preferably in a more tangible field (doctors will get through this better than VR graphics programmers).
I am bullish for software developers. Since 2001 I have not been fired or laid off. I have been able to get a job within 4 weeks the whole time. (Probably 1 week if not fussy and just need money). Software is still eating the world, it just might have a bit of constipation during this period. Developers can save companies money - handy in a recession. Developers can sell their skills globally (that has negatives too…
I sure hope so because I'm out here reading Stroustrup and CLRS to start a career at 30. But it really seems like there's a glut of tech companies with investment capital paying people 300k to make apps for stuff that's trivial. Juicero tier stuff, all over the place. I worry it will collapse and SWE is gonna be your run of the mill 45k job from then on.
Re: How This Ends
#585Getting 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.
How in particular are you affected? You should be able to ignore this if you live within your means and invest passively with a long-term horizon.
It depends, an individual may be affected financially or emotionally.
I used to say what you just said, and then somebody replied to me that there is value in our time and life too, and sure they could be financially fine in 5-10-15 years but what if they had other plans in the short term? Now those life plans are disrupted. Eventually, will they be fine financially? Probably. Have they lost the one shot they had in their life to do something they really wanted? Without a doubt.
Re: How This Ends
#586Re: How This Ends
#587I'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…
If they hike the rates too much then debt servicing would be costly. This is different from 1980, because back then US gov debt was about 30% of GDP and now it is 120% of GDP ( https://fred.stlouisfed.org/series/GFDEGDQ188S#0 ) What are the realistic values here? I have no clue, but a good analysis should cover this.
The Fed doesnt set the interest rate of US treasury debt, its set by auction.
Granted, the rates the fed sets (and expectations of future rates) are strongly correlated to treasury debt rates, but they aren't directly linked.
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#588Earlier quoted context omitted.
Luckily, this is completely tradable, so if you believe that inflation is going to average 3% over the next 10 years you can buy all those treasuries and I can short all those treasuries and one of us will be rich and the other broke. Events will tell who is who.
Nobody buys treasuries to get rich.
If you bought some at >10% in the 80’s you did!
Re: How This Ends
#589Sometimes it's terrifying to think that nobody knows what will happen next, other times it's comforting. After reading this, I am comforted. Anyone predicting any particular outcome is not someone worth listening to.
I agree, which basically sums up this entire thread and all others like it over the past couple weeks.
Air-chair economists pontificating on what will happen to our economy over the next 12-24 months like they know with certainty what they’re talking about.
I thought this article was arguably the most rational outlook I’ve seen. It’s insane to me that a small fraction of companies have had a couple routine layoffs, the market slightly dips as it always does cyclically, and people are already running around saying the sky is falling.
Re: How This Ends
#590Earlier quoted context omitted.
New buying gets hit hard. In the US, fixed rate 30 year mortgages mean that a lot of existing owners are isolated from rates (albeit not from market price devaluations).
It's outside the US too, but holy moly is it dirt cheap in the US, averages not even 4% [1]. When I looked last year RBC showed like 8% (now 9.75%[2]) for 25 years fixed in Canada; tougher choice against 5 year terms than down South. 1: https://policyadvice.net/insurance/insights/mortgage-statist... 2: https://www.ratehub.ca/best-mortgage-rates/25-year/fixed
> holy moly is it dirt cheap in the US, averages not even 4%
That's out of date, its above 5% now: https://fred.stlouisfed.org/series/MORTGAGE30US/