121–130 of 408 posts
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I've had this same thought, but everyone seems to be sitting in cash? No one wants to invest unless everyone else invests. Seems the emperor is suddenly naked.
> everyone seems to be sitting in cash? What is this based on? Every indicator suggests we’re still in a risk-on mode as an economy. It’s why we have inflation.
If interest rates continue to increase, the market is in for a very rough time. COST is about 40 PE right now which implies 2.5% trailing yield. You can get 3.1% on a 10y treasury risk free right now. Of course equities have growth potential, but also risk, typically the spread between risk free rate and equity yields is much higher. Plenty of 30-40 PE companies at index level with close to 0 growth. Companies like N…
This is the scariest thing to me that very few are discussing. Corporate debt is either toxic or nearing it based on the implications of your statement (which I believe to be accurate).
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> [0] Another mantra: it's not. it's the best indicator so far.
Given that global warming will cause the global economy to contract one way or another within the next 100 years (either we willingly contract to soften the blow, or keep going and producing more greenhouse gases until a massive crash), I really don't think this is the right time to think in these terms.
And economic growth is already (though not that recently) somewhat decoupled from growth in greenhouse gas emission, so any actions taken to reduce climate consequences do not have to be at the cost of stopping global growth, much less intentionally contracting global economy; and in fact the only actions likely to be taken in practice are those which don't stop economic growth - the general population, especially those in poorer countries (even those directly harmed by climate change) will not accept that cost.
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you have to take risk to earn returns. Sometimes that risk actually eventuates, and you have to either keep going, or take the loss. That's why you must know the time horizon for your investments - if you know you need the money "soon", you cannot actually invest in the stock market.
You have to take calculated risks to earn returns. FOMO at your own risk. If you are 30 and don’t need the money you put in SPY until 70, don’t sweat it. You’ll be fine. But let’s not pretend blindly taking risk is OK because some return is expected. Time horizon and some relative valuation context is important. Buying into the stock or housing market at extreme historic levels of valuations like those in late 2021 a…
Look at a chart of the S&P 500 from 1920 to 2008 and you'll notice something rather curious: the stock market has gone parabolic ever since the financial crisis. What made this period so unique? Tremendously low interest rates coupled with quantitative easing dissuaded capital from financing the real economy and instead encouraged herding and levering up in the financial economy for returns. At ever dip, it was an op…
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You should see the volume of the last 24 hours. No one is sitting on cash unless they are hobbyists.
That’s ironic. If you’d sold your S&P500 on Monday and bought back on Friday, you’d have gained 2.7 shares per 100 sold. If you’d sold your S&P500 a month prior and bought back on Friday, you’d have gained a 8 shares per 100 sold. If you’d sold your S&P500 six months prior and bought back on Friday, you’d have gained 14 shares per 100 sold.
[0] Berkshire Hathaway - https://www.dataroma.com/m/holdings.php?m=BRK
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I think their analogy is that your investment in the Prussian/Holy Roman Empire/Carthage stock market can still end up ruined regardless of time.
And yes, that's true. Geographic concentration is a real risk. if you purchased a world wide index, you will not suffer from such risk.
> Buying the dip isn’t some secret strategy. Time is the secret strategy. Ah yes, the good ol' "time in market beats timing the market". Of course, that assumes that markets trend upwards in the (very) long term. Which... if past performance is any indicator of future performance [0], the past 100 years provide a fairly compelling narrative. [0] Another mantra: it's not.
> the past 100 years provide a fairly compelling narrative. In the US. The Nikkei is down over 25% from its peak 32 years ago .
Sounds a lot like people examining only post-WW2 markets in the United States during a period of historic national expansion and growth and thinking they'll continue on average.
The next few decades have very different social and economic considerations of the past few decades, so...