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Ask HN: How to best take advantage of the coming recession?

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Re: Ask HN: How to best take advantage of the coming recession?

#51

Post by poordadrichson »

traceroute66 wrote: post #42

> have a decent amount of savings in cash How much is a "decent amount" ? If its not equivalent to 6–12 months salary, then its not enough. Yes, the foolhardy will try to tell you that 6–12 months cash in the bank is deadwood. But they are wrong. What happens if you lost your job tomorrow ? You're unlikely to walk straight into another job are you! What happens if some other $expensive_shit hits the fan ? Trust me, y…

My savings / monthly living cost gives me a good 5-6 years of comfortable living

Re: Ask HN: How to best take advantage of the coming recession?

#52

Post by huhtenberg »

satvikpendem wrote: post #48
huhtenberg wrote: post #47

Earlier quoted context omitted.

Oh, sweet summer child. Give this a skim - https://www.oaktreecapital.com/insights/memo/sea-change

You know what they say, economists have predicted nine out of the last five recessions. This has the same energy.

[flagged]

Re: Ask HN: How to best take advantage of the coming recession?

#53

Post by poordadrichson »

OP here: Thanks for the comments so far. Please, let's not sidetrack on whether there will indeed be a recession, it's a self-fulfilled prophecy etc. My point is what to do when it happens 6,12,18 months from now and/or if this happens 3 years from now. I think this should be obvious.

Re: Ask HN: How to best take advantage of the coming recession?

#54

Post by starwind »

satvikpendem wrote: post #17

I will post again my answer to what someone else asked similarly the other day [0]: One thing we must make clear is, is there actually a recession? Many companies are firing, but they've fired much fewer than they've hired in the past few years. Many companies are still hiring now. I don't think there is a recession, much as people might be scared that there is. [0] https://news.ycombinator.com/item?id=34296393

People have been calling for a recession since June and you can see the signs everywhere except where it really matters to people: the labor market

Slow down? Sure. Recession? Eh.

Re: Ask HN: How to best take advantage of the coming recession?

#55

Post by poordadrichson »

st4lz wrote: post #24

Plan all big improvements to your house, when the construction sector would have a hard time finding a job. Any expensive improvement like roof, road, fence should be much cheaper. I consider the Eastern Europe having unique opportunity these days, as the Ukrainian market has extremely good potential to grow in many areas. If it goes EU+NATO direction after the war, it may boost the whole region and follow the direct…

> We may exchange some contact and share some more info if you are interested.

Sure, email me at poordadrichsonhn / gmail

Re: Ask HN: How to best take advantage of the coming recession?

#56

Post by zeusk »

adam_arthur wrote: post #36
zeusk wrote: post #7

Earlier quoted context omitted.

I'm sorry but can you list a single stock with 15% dividend with track record for paying that out consistently? 15%+ growth (considering they pay taxes and have expenses other than dividend) consistently will reach astronomical numbers pretty quick.

There are plenty of high yield investments that pay 10%+ right now. PDO paid out ~20% last year, including special dividends. And likely will perform similarly this year, though somewhat lower due to cost of leverage increasing. AFCG has senior, real estate secured loans and pays 14.5% with no debt (though recently opened a line of credit). Even in event of default, they get to assume ownership of valuable properties…

I'm sorry, none of them have a track record of paying 15%+ yield. The yield looks high right now because they're in distress and the asset prices have gone down, with earnings heading lower and higher borrow cost I doubt those yields will even make a dent to capital losses in owning those assets.

PDO and AFCG were not even listed 5 years ago. PBR is very much a distressed asset in a state pursuing nationalization of oil profits.

Re: Ask HN: How to best take advantage of the coming recession?

#57

Post by st4lz »

0xmarcin wrote: post #37
st4lz wrote: post #24

Plan all big improvements to your house, when the construction sector would have a hard time finding a job. Any expensive improvement like roof, road, fence should be much cheaper. I consider the Eastern Europe having unique opportunity these days, as the Ukrainian market has extremely good potential to grow in many areas. If it goes EU+NATO direction after the war, it may boost the whole region and follow the direct…

Potential is great, but so is the risk. For example consider this: apartments in Kiev are now priced at about 50% of their usual price, you may buy one. Now hypothetical scenario: in the Spring there is an Russian offensive on Kiev and your investment is destroyed, you have $0 in that case. I think investing and war are very very bad companions. If you want to _invest_ your cash you should avoid too risky moves. On t…

I don't say you have to rush and buy anything now. After the uncertain long-term peace, there would be many issues to rebuild the country for years.

That is why I don't see many people living in the West would consider it safe enough anytime soon. If the correct legislation and public funds would build up over the years, with the natural resources, land fertility and industrious population it may grow even faster than post soviet block in the 90s.

I don't say it's certain, I just consider it possible.

Re: Ask HN: How to best take advantage of the coming recession?

#58

Post by opportune »

readthenotes1 wrote: post #35
satvikpendem wrote: post #17

I will post again my answer to what someone else asked similarly the other day [0]: One thing we must make clear is, is there actually a recession? Many companies are firing, but they've fired much fewer than they've hired in the past few years. Many companies are still hiring now. I don't think there is a recession, much as people might be scared that there is. [0] https://news.ycombinator.com/item?id=34296393

Last time I was on the interstate, there were a god awful number of trucks moving junk. Restaurants nearby are busy. Unemployment is pretty low (U-6). We may have receded from the helicopter-money fueled mania of last year, but there doesn't appear to be widespread pain one usually associates with "recession"...

There is a saying that generals always fight the last war.

With all the talks about recession, IMO people are not appreciating that not all recessions are like the GFC we just went through. Yes, some recessions are really bad. But historically there have been milder recessions which were not as catastrophic.

What made the last recession so bad was due to a problem (lax loan standards causing the housing market to become overpriced, very fragile to macro conditions, and creating riskier-than-expected financial derivatives) that is since addressed. The days of NINJA loans are over, and the financial markets are of course going to be cautious in assessing the risk of financial instruments based on mortgages going forward.

We are in an entirely different situation now where supply/demand and global trade keep getting messed with due to COVID and geopolitics, and where central banks across the world are having to deal with the effects of over-stimulating the economy. This is us finally leaving the status quo of low rates and low inflation (in most developed economies) after over a decade. So yes that will disrupt things, but it doesn’t mean it will be anything like last time.

People also don’t appreciate that a stock market/asset price correction is not the same as a recession. The two often co-occur for obvious reasons, but each can happen independently of the other.

Re: Ask HN: How to best take advantage of the coming recession?

#59

Post by opportune »

poulsbohemian wrote: post #49

Having lived through like 5+ of these downturns now, here's what I tell my kids: -- These cycles are part of the sickness of our system. Prepare for it. -- When times are good, hoard money. IE: save it, don't spend it. Put it in the market, in assets, in something for when you need it. -- Always have a side hustle. It doesn't have to be much, but some little side thing where you are making a little money can make a d…

Regarding living below your means. For a lot of people their default mode if they don’t stop themselves is to spend almost as quickly as the money comes in. For people raised in a culture (be it family or larger) of saving and living below your means, who then get good jobs, I think the problem can easily become reversed where you are so attuned to the time-value of money and frugality that you become a bit miserly.

I was spending about 10-15% of my gross income for a few years until I realized I was denying myself a lot by not spending closer to like 20%. Yes I am happy that it allowed me to grow my investments quickly. but after a certain point it feels like you are just optimizing for a high score in your 60s. If you are financially driven you may always be thinking that $1 now could become $10 (in real terms) in a few decades. But I imagine when I’m 60 I’d gladly trade 20% of my worth to be able to experience things as a young adult.

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