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Ask HN: How to deal with markets down turn? Feeling down

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Re: Ask HN: How to deal with markets down turn? Feeling down

#81

Post by jeremyt »

thehappypm wrote: post #37
jeremyt wrote: post #23

Sorry that this happened. You're not alone feeling this way. I have lost about 95% of my liquid net worth this year, due to hubris, basically. The first half of 2022 for me was waking up every morning and feeling like puking a little as I get more under water, closer to that margin call, plunging through my stops. After almost a year of this, I have found a perspective that is helpful for me and may be helpful for yo…

What was your motivation to invest in such a way that 95% loss was even possible?

To make money, why else? Look folks, this wasn't my retirement money, it was money I didn't particularly need and had no idea what to do with.

It always worked for me before. My investing history is a long string of huge successes beginning in 2014.

I've always invested in companies I believed in and that had solid fundamentals.

It appears the market doesn't give a shit about company fundamentals right now. Most small growth companies are down ~80%. The two companies I lost everything in are currently priced below liquidation value.

Yeah, I bought on margin, so that gave me 2x leverage, so if it goes down 50% you get margin called.

Like I said. I have learned lots.

Re: Ask HN: How to deal with markets down turn? Feeling down

#82

Post by mellosouls »

Markets go down and up. Your money isn't real till you cash it out, and it's unhealthy to let short term changes in headline numbers control your emotional reaction - positive or negative.

Your focus on the short term is causing the issue here, so try to move on from that.

Re: Ask HN: How to deal with markets down turn? Feeling down

#83

Post by xivzgrev »

Make sure you are personally prepared if you get laid off. Have enough cash on hand to cover 6 months of expenses.

Accept downturns are a part of life and are overall a good thing. Every bull market accumulates cruft (NFTs, ahem), and a downturn helps clear that out for the next bull market.

Downturns can be a fantastic time to buy. The old adage is to buy low and sell high. S&P 500 is down 25% this year. If you believe (as I do) it will more than recover, then if you buy today, you will earn more than 25% return when it does.

Lastly if your stock options are hit more than market, assuming you believe in long term health of business, that probably means they will recover more once market recovers. Tech stocks are getting unfairly punished now because of tampered growth expectations. Don’t sell them. Let them vest and ride. In fact buy more if you can (see point above).

Re: Ask HN: How to deal with markets down turn? Feeling down

#84

Post by rvz »

StopTheWorld wrote: post #39

In January 2021 the market seemed overheated so I mostly cashed out, and sold a lot of my 401K stock, putting it into safer assets. From May to September as tech indexes got cheaper I began buying them up in my rollover IRA. Two and a half weeks ago I started loading up on tech indexes with my spare liquid assets - I am down about 2.3% on that right now. I still have some spare liquid assets, but it's easily possible…

You are right, it was indeed getting quite overhyped and extremely euphoric in both the stock market (and crypto). I quite frankly saw it coming months ago. [0]

It just had to end very quickly with a market crash after all what happened in the last two years.

[0] https://news.ycombinator.com/item?id=29508238

Re: Ask HN: How to deal with markets down turn? Feeling down

#85

Post by bryanlarsen »

_heimdall wrote: post #72
bryanlarsen wrote: post #22

Earlier quoted context omitted.

Huh? nonfarm payroll growth is up 263,000 in September. The most predictive indicator is the unemployment ratio, and it's very low right now. Perhaps inflation is a better predictive indicator, but we really don't know since we haven't had any for ~40 years. As I said, it's the uncertainty depressing markets IMO, not necessarily the outlook.

Unemployment really needs to be paired with the Labor Force Participation Rate. Unemployment is low, but LFPR is down as well. 10 years ago it hovered steadily around 63.5-64%. The pandemic crushed it, but we're still only back up to around 62.5%. That's a lot of people not working that simply aren't in the market anymore, unemployment would look a lot worse if they were included.

LFPR is above the level it was pre-pandemic. Immigration is the best way of driving up the LFPR, but that was essentially nil during the pandemic and is still way down. Combine that with the aging population, and a slight increase in LFPR over the last 3 years is much better than could be expected.

Re: Ask HN: How to deal with markets down turn? Feeling down

#86

Post by downbad_rsus »

Based on my understanding of you’ve said, you are down bad on holdings (on paper) as I’m sure most all of us are but are you in need of liquidity (cash)? If not then it really doesn’t matter. Try to focus on what you need to survive/live and let markets do what markets do.

Eventually markets will stabilize/return to previous levels at least historically speaking.

If you are in need of liquidity you could look to sell your current (even your future, yet to be vested holdings) but I’d recommend sitting on your hands unless you are an active investor or in dire need of liquidity.

- down 30%+ on paper

Re: Ask HN: How to deal with markets down turn? Feeling down

#87

Post by compumike »

The market is really not collapsing.

A longer-term perspective might help ease your short-term emotional swing… see longer-term asset class graphs at https://totalrealreturns.com (my side project)

Options are leverage. If you can’t handle the levered-up volatility, reduce your leverage.

Re: Ask HN: How to deal with markets down turn? Feeling down

#88

Post by causi »

cloudking wrote: post #63

Be aware that: 1) we're likely in a declining/sideways market for at least another year until inflation subsides, possibly longer 2) the Fed has most of the control over the inflation/deflation levers (on demand side) 3) markets will most likely recover over the long term, historically speaking The Fed is purposefully reducing their asset holdings and increasing interest rates to slow down demand, which in theory sho…

1) we're likely in a declining/sideways market for at least another year until inflation subsides

Gonna be a lot longer than that, at least as far as inflation goes. Q3 2022 is the median date for retirement of the largest generation, the Boomers. When they retire they take their capital with them. Expect the cost of capital triple for at least the next decade.

Re: Ask HN: How to deal with markets down turn? Feeling down

#89

Post by TechnicolorByte »

causi wrote: post #88
cloudking wrote: post #63

Be aware that: 1) we're likely in a declining/sideways market for at least another year until inflation subsides, possibly longer 2) the Fed has most of the control over the inflation/deflation levers (on demand side) 3) markets will most likely recover over the long term, historically speaking The Fed is purposefully reducing their asset holdings and increasing interest rates to slow down demand, which in theory sho…

1) we're likely in a declining/sideways market for at least another year until inflation subsides Gonna be a lot longer than that, at least as far as inflation goes. Q3 2022 is the median date for retirement of the largest generation, the Boomers. When they retire they take their capital with them. Expect the cost of capital triple for at least the next decade.

Can you expand on this? What do you mean when you say that the cost of capital will triple over the next decade?
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