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Berkshire's $397B Bet Against an Overheated Market

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Re: Berkshire's $397B Bet Against an Overheated Market

#91

Post by mschuster91 »

hylaride wrote: post #68
iso1631 wrote: post #49

Earlier quoted context omitted.

Which will trigger even more wealth transfer to the top .1%, which the 99% will blame on the administration, and put the corrupt lot back in a few years later Eventually though the world moves on and China takes over

China's got its own set of economic problems that they're masking. Their domestic economy is stagnant and they're trying to keep factories pumping out stuff. Since their domestic economy isn't biting, they're flooding the world with exports. This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starti…

> This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starting to see that).

Well... China's foreign currency reserves are practically infinite and the rest of the world knows they can't push back on China too hard or lose a lot of important imports. For Europe for example, India and China together make 80% of the foundational ingredients for medicine [1]. Our supply chains are gone, even if we wanted to, it would take years to have fabs ready that could produce the domestic demand for stuff as simple but vital such as painkillers and antibiotics.

[1] https://www.diepresse.com/17552998/80-prozent-der-wirkstoffe...

Re: Berkshire's $397B Bet Against an Overheated Market

#92

Post by [deleted] »

mschuster91 wrote: post #91
hylaride wrote: post #68

Earlier quoted context omitted.

China's got its own set of economic problems that they're masking. Their domestic economy is stagnant and they're trying to keep factories pumping out stuff. Since their domestic economy isn't biting, they're flooding the world with exports. This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starti…

> This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starting to see that). Well... China's foreign currency reserves are practically infinite and the rest of the world knows they can't push back on China too hard or lose a lot of important imports. For Europe for example, India and China together…

[deleted]

Re: Berkshire's $397B Bet Against an Overheated Market

#93

Post by surgical_fire »

wongarsu wrote: post #46
bonesss wrote: post #7

It’s such an odd time investment wise… We have a blooming oil war that could take chunks of the global economy with it, booming and teetering credit levels threatening collapse, the “AI” companies have a lot of tinkerbell magic and impossible returns needed to justify their stocks, major cash rich tech giants are suddenly hands-out pockets-out for big money, and … well: Elon is the worlds richest man/CEO who also sha…

In a world where Tesla has stayed at "severely overvalued" stock prices for about a decade, with occasional crashes to just "overvalued", I'm not so sure the big AI companies really need returns that justify their stocks. Sam Altman and Dario Amodei are both in their own ways trying to capture that same lighting in a bottle where the company is evaluated solely on the CEO's vision

For how long can the gamble be detached from real life?

It's an honest question. In the real world, resources and people are finite. Things have to make sense, the bills have to be paid.

In the stock market however, a company can be completely worthless in the real life, but if the money blobs all agree to pumo money into it the stock price goes up anyway.

Re: Berkshire's $397B Bet Against an Overheated Market

#94

Post by jingpostmedia »

mschuster91 wrote: post #91
hylaride wrote: post #68

Earlier quoted context omitted.

China's got its own set of economic problems that they're masking. Their domestic economy is stagnant and they're trying to keep factories pumping out stuff. Since their domestic economy isn't biting, they're flooding the world with exports. This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starti…

> This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starting to see that). Well... China's foreign currency reserves are practically infinite and the rest of the world knows they can't push back on China too hard or lose a lot of important imports. For Europe for example, India and China together…

[flagged]

Re: Berkshire's $397B Bet Against an Overheated Market

#95

Post by stasomatic »

yetihehe wrote: post #57
inigyou wrote: post #41

Earlier quoted context omitted.

Yeah, I used to feel life was rich too, and then I very suddenly became aware that it was finite and anything I could possibly do is just leading towards the same fixed point ending. I think mentally healthy humans have ways to avoid thinking about this.

Find purpose which aligns with "progress or wellbeing of our species". Making kids is one, making inventions is another, helping poor or sweeping roads fits too. If you see that your "way of living" will affect people positively, typically you will have a "good life purpose". What happens when you have kids? You leave something that will last after your death. Then you make sure that they are properly raised and have…

I understand this is childish, but nobody asked me if I wanted to be on this rock hurling through space at 230K/s. Thanks, parents :)

Re: Berkshire's $397B Bet Against an Overheated Market

#96

Post by vintermann »

BLKNSLVR wrote: post #34
bonesss wrote: post #7

It’s such an odd time investment wise… We have a blooming oil war that could take chunks of the global economy with it, booming and teetering credit levels threatening collapse, the “AI” companies have a lot of tinkerbell magic and impossible returns needed to justify their stocks, major cash rich tech giants are suddenly hands-out pockets-out for big money, and … well: Elon is the worlds richest man/CEO who also sha…

The thing I worry about is: what happens when an actual set of adults get back into the White House? That could well be the trigger for the crash of all crashes because they might actually bring some reality pins with them, which are the antithesis of the growing, in size and number, fantasy balloons of hot-air the current cough leadership cough is facilitating.

The opposition in the US doesn't believe in anything except "stability". That means they'll probably keep most actual Trump administration policies. Probably even the war on Iran, though they might stop pretending to call it off every weekend.

Re: Berkshire's $397B Bet Against an Overheated Market

#97

Post by plomme »

cmiles8 wrote: post #17
sph wrote: post #8

Earlier quoted context omitted.

How I view the market: Short term: high volatility and uncertainty, feels more like gambling at a casino Medium term: the world is too unstable, best to hold cash Long term: dollar cost averaging and time in the market always win so depending how long your horizon is, it’s a good time as any to invest Longer term: we all die

Good advice. Ironically most long term folks that just buy low cost index funds and take a nap outperform most of the market stressing out daily on their next move. That’s the cruel reality of investing. When you factor in the opportunity cost of all that stress and managing an active portfolio the percentage of successful active portfolio managers likely falls down to single digits. Invest early, invest consistently…

This has been my investment philosophy as well, but I'm starting to realize that this is forgetting that "past performance does not guarantee future results". It only works when the index goes up, and I don't see any fundamental reason that should be true on the long term. I don't know of a better alternative though.

Re: Berkshire's $397B Bet Against an Overheated Market

#98

Post by bryanlarsen »

sph wrote: post #8
bonesss wrote: post #7

It’s such an odd time investment wise… We have a blooming oil war that could take chunks of the global economy with it, booming and teetering credit levels threatening collapse, the “AI” companies have a lot of tinkerbell magic and impossible returns needed to justify their stocks, major cash rich tech giants are suddenly hands-out pockets-out for big money, and … well: Elon is the worlds richest man/CEO who also sha…

How I view the market: Short term: high volatility and uncertainty, feels more like gambling at a casino Medium term: the world is too unstable, best to hold cash Long term: dollar cost averaging and time in the market always win so depending how long your horizon is, it’s a good time as any to invest Longer term: we all die

> always win

That's not true. It's only been true on American stock markets, and we only have ~100 years of data.

Many other major stock markets in the world have had ~20 year periods where you would have been better off with your money in bonds than in stocks.

I think the average world stock market is a much better predictor of American stock markets over the next 100 years than past performance of American stock markets. The last 100 years have been exceptional for America vs the world -- it seems very likely that the next 100 years won't be.

The most extreme example is Germany 1914. If you would have invested in the German stock market in 1914 it would have taken you 100 years to break even. I'm not saying that American stock markets will be that bad, but it's an example that disproves the thesis that long term stock markets always win.

Re: Berkshire's $397B Bet Against an Overheated Market

#99

Post by hylaride »

mschuster91 wrote: post #91
hylaride wrote: post #68

Earlier quoted context omitted.

China's got its own set of economic problems that they're masking. Their domestic economy is stagnant and they're trying to keep factories pumping out stuff. Since their domestic economy isn't biting, they're flooding the world with exports. This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starti…

> This isn't sustainable, especially if and probably when the rest of the world decides that they're done with government backed Chinese companies killing theirs (and you're starting to see that). Well... China's foreign currency reserves are practically infinite and the rest of the world knows they can't push back on China too hard or lose a lot of important imports. For Europe for example, India and China together…

I don't subscribe to the "China is just to big and important to fight" arguments. Countries that peg their currencies distort markets, mask problems, and eventually that comes crashing down (see also Asian financial crisis, the Bank of England pegging in the early 1990s, etc).

Re: Berkshire's $397B Bet Against an Overheated Market

#100

Post by bryanlarsen »

ghtbircshotbe wrote: post #85
bonesss wrote: post #7

It’s such an odd time investment wise… We have a blooming oil war that could take chunks of the global economy with it, booming and teetering credit levels threatening collapse, the “AI” companies have a lot of tinkerbell magic and impossible returns needed to justify their stocks, major cash rich tech giants are suddenly hands-out pockets-out for big money, and … well: Elon is the worlds richest man/CEO who also sha…

I'll believe Musk is a trillionaire when the free float of spcx is 95%, not 5%

He's not even a trillionaire with a free float of 5%. Now that SPCX has almost returned to IPO prices, Elon is "only" worth $0.9T.
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