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Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

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Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#161

Earlier quoted context omitted.

The top 40% are unbelievably flush with cash and the job market is strong as ever (bloated tech companies don't count, their value was solely promises anyway). The fed is fighting to undo the QE it over did during the pandemic

I think it's unwinding the QE it did since 2008.

They are nowhere near unwinding the QE since either the pandemic or 2008:

https://fred.stlouisfed.org/series/WSHOSHO

Why would they even try to undo 14 years of asset purchases? Their goal is only to reduce the growth in nominal spending in the economy so that it grows at around 4% annually (yielding an inflation rate of 2%). The goal is not to return nominal spending back to where it was in 2008, which would involve nearly a 50% cut from current levels.

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#162

Personally, I wish it was as rewarding building or creating something as it is to invest in the stock market over the past decade. If you have capital it makes more sense to put it into stocks than opening a coffee shop or computer repair shop, etc. If the stock market stops paying out maybe we'll go back to trying to create value instead of profiting from value created by others.

If you built or created something that other people like (i.e. will pay for), you could probably get a way better 10 year ROI than you would in the market.

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#164

Earlier quoted context omitted.

For example, say you left a company and transferred a 401k balance into Vanguard and put it into VTSAX (total stock market ETF) with no ongoing deposits. Lets say you thought the market was going to go down and on Jan 3rd 2022 you yoinked out your entire balance which for the sake of easy math was exactly $100k (not take a withdrawal, just pull it from the ETF). Today you would still have $100k sitting there in a pla…

I've always interpreted Buffet's advice as aimed at time periods way longer than one year.

Not like he has a fucking Bloomberg terminal with no latency or anything. Like he can't spell out FPGA's but he delegates. Not half as senile as he makes himself look, not a shit mathematician at all, not a folklore-driven dude that anybody can imitate (counterfactual, that's part of the business), publishes information on his colon biopsies for a reason, he is rich because he wants to be rich, he likes money. Plus he's the designated "Richest Man in the World" trading off with Bill Gates like they're a wrestling team. Makes no fucking sense, wealth has been aggregating incredibly for thirty years, rich getting richer, more stratified, more clustered, according to literally everyone even USG census, everyone. But the richest man in the world has had 60 billion dollars on the nose since 2000? What the fuck? Apparently now it's a little higher, Jeff Bezos and Elon Musk, at like $160 or some billion...like no it's not. Diminished variance stedda amplified variance. Silva Paradox, http://fgemm.com. An actual valuation of their wealth would significantly diminish it, and inform others of it, they don't know really. Only a hobo can look in his pocket and say "I have 550 pesos" a rich man it's like either his company has a fluctuating market cap or he needs armies of accountants and lawyers and like occasionally vudu priests literally "Vudunomics" like they believe in magic. Why not? There can be a physics explanation behind it that will not be understood for hundreds of years, if it works hell. Yeah. If it works Hell.

White magic or black magic? Well preferably white but when told that requires giving all wealth away to the poor as the first step, they like say...uh...what's the other one? Be richer and richer, always, black magic. OK that works better. And the richest men wrestling team agreed to give half their wealth away, which is OK that's cool in principle, I don't have a read on that. What I can say is white magic simply is hard, you can't successfully give away all your money, you end up with more even more money, and then you give that away and you get it all back, give all all of it away get down to a penny. Apologize to a beggar when you give it to him (it's considered insulting) dude riches leak into your ascetic life, from every nook and cranny, out of nowhere like not quite to the point of finding cash on the sidewalk (who knows, any day now, it's becoming a sick game). Spesh when you have faith, a mustard seed, thing is a mustard seed is a huge amount of neurons, that's a subsection of your brain that needs to germinate from somewhere, very tricky very tricky, and it doesn't work at all half-way. It's all or nothing. Saying more would make it impossible for you to develop it. Matthew 17:20, that's all I got, that's all you need.

Whereas if Warren Buffett asks me, I'd say "you're rich." Simple as that, and that's the actual question, it's in practice binary, does he have to worry about money or not? No because he's rich.

No, Buffett has no bloomberg terminals, no technology he does understand (he gets for instance stock tickers, gets a ton of things, plays dumb, and some stuff he does in fact not get and is truthful about it, like investing in Apple, he doesn't get that). Yeah bajillion dollars and gets his information for free on yahoo finance like you or me.

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#165

Earlier quoted context omitted.

Your comment makes me realize that in the medium term, after most of the unlucky predictors drop off, you are statistically likely to be left with a few really lucky ones (i.e. if a thousand people are tossing coins, you're likely to get one guy with a streak of 10 heads), and these individuals are perfect to put on pedestals as rare and brilliant talents.

Your comment reminds me of Buffet’s 1984 article titled “The super investors of Graham and Doddville”. Here’s the relevant excerpt > Before we begin this examination, I would like you to imagine a national coin-flipping contest. Let’s assume we get 225 million Americans up tomorrow morning and we ask them all to wager a dollar. They go out in the morning at sunrise, and they all call the flip of a coin. If they call…

The funny thing about these people is that they did really well for a few decades. And then it dried up. Computers, the internet, software - it changed the world so much in the last 20 years that many things which looked like "deep value" just went belly up.

Eddie Lampert is a great example of a (brilliant) graham and doddsville guy who basically got squashed by not understanding the world had changed.

Over the past 20 years the tech "intellectual village" has been the smart money. They'll probably be for another 20 years. And then someone will point to it with a similar explanation that Buffett had. And then they'll get crushed by whatever multi-decade driving force comes next.

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#166

I have a very different position on this. I think we will see the most growth we’ve ever seen in the next decade and it will be powered by AI. I think most of these investors don’t really understand how close we are to have very useful AI and what it’s impact will be. We are roughly on the verge of another industrial revolution

AI will only be a positive revolution if it's not putting a large number of people out of jobs, but merely increasing their productivity.

Or, if it DOES put a lot of people out of jobs, it would be good for them to have some ownership over the AI, so that it's the labor force who reaps the benefits, not just the corporations. The bad scenario is mega-corps replace lots of humans with a fleet of machines owned by the mega-corp. The better scenario is we see widespread ownership of AI-powered productive property (that is, distributism), such that mega-corps contract out jobs to humans who own that property, and the property allows those humans to provide better service than before.

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#167
post #128

Earlier quoted context omitted.

Yeah some clowns named Ray and Warren also keeps crying wolf about how the economy has issues too. These guys have no idea what they are talking about! I don't think they even trade.

Buffett has also been predicting the mother of all crashes since 2016. Lesson: never listen to experts unless you discover one with a time machine. Like they say, more wealth has been lost trying to time the market than in crashes.

The market can stay irrational longer than you can stay solvent.

We’re in a massive bubble but only a fool would try to predict exactly when it will pop.

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#168
post #160

People say this like it's a bad thing. Look, at a fundamental level, the stock market is a tool for letting people put money into risky ventures without them actually experiencing consequences for that risk. Given the extent to which the nature of information has changed, I'm comfortable no longer letting this be a driver of economic growth. You want to put money in a thing in the hopes of getting more money, fine. B…

OTOH probably gonna be harder for startups and VCs to "pull one over" public investors and dumb management teams.

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#169
post #151
post #15

> “There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” he said in an interview with Alex Karp, CEO of software and A.I. firm Palantir. Adjusting for inflation, the stock market was not "flat" during this period [0]. The DJIA, for example, closed at an effective price of 9,160.41 in January 1966 and closed at an effective…

A lot of the adjectives that traders use are different from how casuals would interpret things. They are looking for massive profit opportunities and declare hell on earth when they aren't there because it is for them. People who are just putting 401K money into index funds just need their money to slightly outpace inflation which it will almost always do in a long enough time horizon. We saw an outsize bull market a…

"Nearly guaranteed" may be a stretch. There are decades in US history where you wouldn't really come out ahead (although I'm not sure any alternatives to stock would have done better) but internationally, there are many clear examples where the stock market hasn't been a good investment on a generational basis, like Japan now. The question is how much do you believe in American exceptionalism, are US markets really immune to this kind of failure forever, or have they just been on a really good run?

Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade

#170

And Michael Burry has been predicting crashes every few years since the 2008 one. And Bill Ackman predicted 'hell is coming' at the onset of the pandemic and made $2B [0]. And there were US Senators that also did possibly illegal things to pull money out of the market before the public knew about the pandemic. Outside of disclosures filed with the SEC, stock trading is anonymous yet they will have all sorts of headli…

Ackman said hell was coming, was appropriately hedged using instruments which would appreciate when hell did indeed come, and made $2bn on his hedge which offset the losses in his equity positions. He didn't net profit $2bn.

He appeared on TV crying while his firm was unrolling their hedges and buying stock for the rebound. Never trust media.
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