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Stocks trampled as Nikkei crashes 13%

reuters.com

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Re: Stocks trampled as Nikkei crashes 13%

#61

Post by sergiotapia »

drsim wrote: post #6

It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…

If everybody invests in these funds, then the thing is artificial yes? Are there enough people betting against it to keep the thing going up and to the right? What happens if everybody invests in The Fund?

Re: Stocks trampled as Nikkei crashes 13%

#62

Post by Dalewyn »

drsim wrote: post #6

It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…

>It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon.

I think sentiments like yours are just as bad as the sentiments you find aggravating.

Yes, investments can produce bigger returns than simple savings, but the keyword is there is no guarantee. Unlike savings which are guaranteed by the bank and the government and will grow at a known rate, investments are not.

Investments are thus akin to gambling. Whatever money you put in to investing should be money you are willing to never see again, no matter how low the chances of such a thing happening.

Most people are not willing to effectively or theoretically throw their money away, rightfully or otherwise, and thus find saving more appealing than investing. There is nothing wrong with choosing to save instead of invest if that's what lets you sleep well at night.

Re: Stocks trampled as Nikkei crashes 13%

#63

Post by somenameforme »

drsim wrote: post #6

It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…

Japan is notable because they're one of the clearest indicators that 'stocks always go up' is simply not true. This [1] is the Japanese stock market (Nikkei225) inflation adjusted. It reached its highest point in December 1989. It's unfortunate that that table ends in 2013 because obviously a huge amount has changed since then, but even in unadjusted currency [2], its current price is lower than in 1989.

For those who might not know in 1989 many were expecting Japan to imminently become the largest economy in the world, overcoming even the US. Then stagflation hit for reasons that are still not completely clear.

[1] - https://fred.stlouisfed.org/graph/?g=li7

[2] - https://www.cnbc.com/quotes/.N225

Re: Stocks trampled as Nikkei crashes 13%

#64

Post by ZaoLahma »

drsim wrote: post #6

It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…

It's scary headlines like this that make me push more of my money into index funds (can't be bothered to deal in stocks with the increased effort required).

But... the problem with being on lower incomes / net worth is that there is a highly increased risk that you're forced to pull money out of stocks / funds when they are low because you have little or nothing else to take from to cover unexpected expenses (and you will have a lot more of those when you can't afford to act and instead always react). So if you're living anywhere close to the limit of your income, you really are better off with a savings account.

Re: Stocks trampled as Nikkei crashes 13%

#65

Post by teractiveodular »

listenallyall wrote: post #60
quink wrote: post #47

Earlier quoted context omitted.

That’s why you DCA and diversify… and don’t forget to account for distributions.

DCA would just be throwing good money after bad. The Nikkei didn't crash hard then quickly start rising, it continued to lose value for 20 years.

All things considered, time in market beats timing the market. The speculative bubble in Japan was of historic proportions and so is the stagnation that followed.

Good thing there's no speculative bubbles at all in the world today (/me casts nervous glance at housing prices and AI)

Re: Stocks trampled as Nikkei crashes 13%

#66

Post by michaelt »

bowsamic wrote: post #15
birracerveza wrote: post #11

Earlier quoted context omitted.

>I’m still up 6% YTD and 13% in the last 12 months. For now. It can still go lower.

The only way it could not be is if this is "the end"

A country's financial markets can be moribund over the long term, without any sort of apocalypse.

You could buy into the Nikkei at JP¥30,000 in 1988 and sell today for JP¥30,000

Invest in the FTSE 100 from 1984 until 2000, you saw 500% growth - a 10.5% annual return. Invest from 2000 until today and you saw 20% growth, a 0.7% annual return.

The precise causes are debatable - but it's completely possible for a rich, western-style economy, with no great wars or huge natural disasters, to just sort of stop growing.

Re: Stocks trampled as Nikkei crashes 13%

#68

Post by nabla9 »

baq wrote: post #57
alecco wrote: post #33

• NVIDIA $NVDA: -11% • Google $GOOGL: -11% • Apple $AAPL: -10% • Amazon $AMZN: -10% • Meta $META: -10% • Tesla $TSLA: -10% • Microsoft $MSFT: -9% https://x.com/WatcherGuru/status/1820355633008296324#m

At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on yo…

Nvidia price is 33 times revenue. ;)

Re: Stocks trampled as Nikkei crashes 13%

#70

Post by baq »

nabla9 wrote: post #68
baq wrote: post #57

Earlier quoted context omitted.

At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on yo…

Nvidia price is 33 times revenue. ;)

Yes, if this really unwinds, there’ll be a lot of surprised people.

Not my base case, though. Reflexivity would be really bad for the economy. Regulators won’t allow it.

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