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U.S. stock valuations haven’t been this extreme since 1929 and 2000

marketwatch.com

11–20 of 83 posts

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#11
If you're working a job that isn't directly related to the stock market, and are not about to retire, then you really shouldn't care if the stock market is about to crash or not.

Set up automatic investments into a Vanguard Target Retirement fund (or whatever), and know that whenever the next crash does come, you'll get an exceptionally good deal that month.

Here's some good advice on the subject: http://www.mrmoneymustache.com/2017/06/20/next-recession/

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#14

The miscalculation that I believe economists are making is the massive shift in leverage between the laborers and the owners. Historically, the two were balanced to the point that creating greater economic growth would tip the scales in the laborers' favor, thus increasing wages and inflation. What's happening now is that, due to many factors including outsourcing, illegal immigration, lobbying(bribery), capital conc…

That sounds like a suggestion that something very bad has to happen.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#15

If you're working a job that isn't directly related to the stock market, and are not about to retire, then you really shouldn't care if the stock market is about to crash or not. Set up automatic investments into a Vanguard Target Retirement fund (or whatever), and know that whenever the next crash does come, you'll get an exceptionally good deal that month. Here's some good advice on the subject: http://www.mrmoneym…

>a job that isn't related to the stock market

No such thing, except for maybe the government. If your business isn't sensitive to its stock price, its customers/suppliers/financiers are. Or their customers/suppliers/financiers are. Everything is connected, if you exist in the modern economy, you don't exist in a vacuum.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#16
post #5

Even if there is a global downturn, the US economy will remain strong. Where else is capital going to go? If developing economies go bust, developed nations like the US will buy up their assets in a fire-sale.

China just opened up outside investment this week. Chinese capital already owns way more of America through various investment vehicles than we are willing to admit.

We abdicated our global leadership to China the day Trump was elected. Our economic leadership will likely follow in the next decade.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#18
This article felt more like an ad for active money management (and ignoring index funds) than anything else.

Which makes sense. It's driving active managers nuts the techtonic shift to passive investing.

This was a good podcast on active vs passive investing: http://freakonomics.com/podcast/stupidest-money/

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#19

The miscalculation that I believe economists are making is the massive shift in leverage between the laborers and the owners. Historically, the two were balanced to the point that creating greater economic growth would tip the scales in the laborers' favor, thus increasing wages and inflation. What's happening now is that, due to many factors including outsourcing, illegal immigration, lobbying(bribery), capital conc…

That sounds like a suggestion that something very bad has to happen.

Nothing _has_ to happen. Mass media makes propaganda much easier to spread, and I consider it very likely that nothing will happen and inequality will strengthen for a long time. My point is that the system seems to be stuck in a positive feedback loop where greater capital concentration strengthens the system that created capital concentration in the first place. _Something_ would need to facilitate the movement out of that loop, and historically events required to lower inequality(world war, civil war, lower-class uprisings) haven't been pleasant.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#20
post #7

We are long overdue for a correction. Put your money into bonds and buy into the fire sales in inevitable upcoming crash.

This is the wrong thing to do. Don't try to time the market. Here's some reading for anyone that wants to understand the basics and learn how to avoid investing emotionally:

https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_...

Pay close attention to the "Diversify", and "Never try to time the market" sections.

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