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Show HN: Inflation-adjusted stock charts – Total Real Returns

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Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#201

Post by mensetmanusman »

imtringued wrote: post #199

This is offtopic but I am tired of pretentious people. The money supply must grow exponentially because liquidity premiums aka interest payments. You can now either choose to eliminate liquidity premiums and hence abolish inflation and exponential growth in the money supply or you can choose to have inflation and an exponentially growing money supply with endless increases in public debt. The fact that if the money s…

The money supply must grow because of population increase. Population was almost exponential growth in the last century, but now it has essentially stopped so we are entering a new paradigm.

The stock market under a declining population will be fascinating to watch.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#202

Post by sizzle »

loxias wrote: post #132
Teknoman117 wrote: post #85

Earlier quoted context omitted.

So, what does a young person do these days? First few years out of college were just "max out 401k contributions into some target fund" + build emergency fund, but now that I've amassed more cash than what an emergency fund requires, what does one do? Originally, my plan was to use it for a house down-payment, but with the mortgage rates having nearly doubled in the last 6 months, that's kind of out of the question a…

> now that I've amassed more cash than what an emergency fund requires, what does one do? Pick a few things you can put your money into, which you have confidence won't lose value given a long enough time horizon. For me, this is SPY (highest alpha but needs 10 years to recover). The traditional 60/40 SPY/TLT mix is great. Currency funds also good. VTI & chill is good. Right now the Euro has Dollar parity (ECB isn't…

This sounds like hard fought knowledge, where can I start to build a good foundation for understanding the financial terminology you posted? Thanks for sharing.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#203

Post by sizzle »

anon291 wrote: post #165
Carp wrote: post #128

Earlier quoted context omitted.

That's what my plan is. Just waiting/hoping housing prices drop within the next year or two. Been waiting a while now though so who knows if they'll actually come down

Home prices are coming down in my area of Portland, OR, which was already an overpriced market. Homes have been on the market much longer, and several homes have had price reductions in my neighborhood. Ultimately though, I wouldn't try timing the market, if you can afford the down payment, and the monthly, and like the house, I'd go for it. Always time to refinance later.

Aren’t they building multi-tenant buildings like crazy that are sitting vacant cause of the huge rent prices?

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#204

Post by imtringued »

peterisza wrote: post #28
whatshisface wrote: post #5

How can everything go down at once, doesn't the money have to go somewhere? Best hypotheses so far along with how to test them: 1. Perhaps the parts of the CPI that companies in the stock market can produce are being outpaced by the components that are not produced, like real estate, and so can't contribute to an increase in share prices. (How to check: Look up changes in the CPI components, which are detailed in the…

Money doesn't go into the stock market. If you buy a stock from me today, I can use the exact same money to buy bread tomorrow. That money keeps circulating in the economy, it doesn't go into or out of the stock market.

It circulates in theory. In practice people keep saving ever greater amounts of money.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#205

Post by sizzle »

smallerfish wrote: post #102
Teknoman117 wrote: post #85

Earlier quoted context omitted.

So, what does a young person do these days? First few years out of college were just "max out 401k contributions into some target fund" + build emergency fund, but now that I've amassed more cash than what an emergency fund requires, what does one do? Originally, my plan was to use it for a house down-payment, but with the mortgage rates having nearly doubled in the last 6 months, that's kind of out of the question a…

Don't buy a house until the real estate market crashes. Then buy. I bought a fixer-upper in 2008 for 200k; sold it for 425k 5 years later. Recently it sold for 650k (we still get redfin notifications.) In the meantime I bought a house for 625k (nice house with some rough edges) and sold it 18 months ago in covid real estate madness for 950k. We certainly put money into both houses over time, but we'd never have been…

Wow congrats on pulling this off, I wish I can do this too but the homes are still $8-900k like your example and it just makes no sense to buy unless it cools down to 600’s, which seems like it may never happen. I sure as hell am not paying 900-1 mill for these homes that need a ton of work and are 50+ years old sigh

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#206

Post by aaron_m04 »

x3sphere wrote: post #179
mywittyname wrote: post #166

Earlier quoted context omitted.

> Wait a year or two. The Great Financial Crisis will be the only event of this nature in our lifetimes. The country would need to overbuild like crazy to cause housing to crash like that again. Everyone is expecting housing prices to fall in "a year or two." I've been hearing this for two years now. The market has a habit of doing the opposite of what people expect it to.

Housing prices are correcting now, at least in some areas. It's definitely happening in AZ. I've seen drops of almost 15%. OpenDoor has been taking a loss on a lot of properties it bought over the past few months too. Considering inventory is up over 2X YOY as well, I expect prices to fall even further here. I'm not sure if it'll get as bad as 08 though, but a 30-40% drop isn't out of the question the way things are…

> OpenDoor has been taking a loss on a lot of properties it bought over the past few months too.

I don't understand how they are able to stay solvent. It's gotta be VC money keeping them alive, right?

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#207

Post by sizzle »

MaxHoppersGhost wrote: post #172
dvt wrote: post #149

Earlier quoted context omitted.

> Wait a year or two. The real estate market won't crash, and it especially won't crash in high-demand areas (Southern California, the Bay Area, Atlanta, SoFlo, Colorado, etc.). We'll likely see a steep-ish correction in "second-tier" markets, like the ones in Texas, Tennessee, and the Rust Belt (Pittsburgh comes to mind).

If history repeats itself you are dead wrong. During 2008 the Texas market barely flinched while California and Florida was tanking. I think Texas won’t budge much again considering the consistent flow of people and jobs to Texas in pretty much every major city.

I hope so, it makes no sense how much houses appreciated in 1 year during COVID without lifting a finger to improve the property.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#208

Post by mpalczewski »

tootie wrote: post #146
aluminaient wrote: post #106

Earlier quoted context omitted.

The only time stocks have been this expensive was just before the great depression and just before 2008. They are practically the most overvalued they've ever been, ignoring the last year or two of QE, which were intuitively overpriced. Thinking they are cheap now is how you get burned.

By what metric? The P/E ration for the S&P 500 is not historically very high right now.

By just about every metric. Only bested by 2000 and 1929 for some metrics.

https://www.advisorperspectives.com/dshort/updates/2022/07/0...

https://www.advisorperspectives.com/dshort/updates/2022/07/0...

https://www.advisorperspectives.com/dshort/updates/2022/07/0...

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#209

Post by sicp-enjoyer »

FooBarWidget wrote: post #160
stavros wrote: post #154

Earlier quoted context omitted.

Are "buy" and "live in a car" the only two options?

You can rent, but that's money wasted. The longer you rent, the longer you didn't invest. Also rents are higher than mortgage payments, making it worse.

> that's money wasted

Just wait until you see how much is wasted in a 30 year loan. These decisions often comes down to life style.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#210

Post by sicp-enjoyer »

nemo44x wrote: post #124

As of today, you need about 12% returns to break even after inflation and the IRS eat your return. Anything less than that and you are effectively losing. Especially annoying that capital gains taxes will be paid on any profits, even those less than inflation. Time for a new rule.

Most individuals have the majority of their stocks in tax advantaged accounts.
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