Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Show HN: Is the stock market going to crash?

isthestockmarketgoingtocrash.com

Post reply on HN
Print view View original

151–160 of 338 posts

Re: Show HN: Is the stock market going to crash?

#151

Post by JumpCrisscross »

KasianFranks wrote: post #145
JumpCrisscross wrote: post #132

Earlier quoted context omitted.

> And Bitcoin Given Bitcoin's "capitalisation" failed to hit even $10bn until well after the crisis [1], it's safe to say that more capital moved, in almost any single U.S. state, from stocks to corporate bonds, than from anything to Bitcoin. Being optimistic about the future of a technology is fine. Being delusional about its history is not. [1] https://blockchain.info/charts/market-cap

Ignoring correlations to market downturns and ignoring the data is delusional https://www.google.com/search?site=&tbm=isch&source=hp&biw=1...

Bitcoin came into existence in 2009. Nobody was buying Bitcoin in 2008 because it did not exist in 2008. We don't have data to support the claim that people would rush Bitcoin amidst stock market crashes. We do have data supporting the claim that they rush into traditionally safe assets, i.e. insured bank deposits and Treasuries.

Regarding Cyprus, wealthy Cypriots--by and large--bought German and Greek government bonds, not Bitcoin.

Re: Show HN: Is the stock market going to crash?

#152

Post by sambe »

pdog wrote: post #69

If you're looking for The Single Greatest Predictor of Future Stock Market Returns[1], here it is: http://www.philosophicaleconomics.com/2013/12/the-single-gre... This is a long read, but it's worth it. The metric can be calculated in FRED[2], and as a predictor of future returns, it outperforms all of the most common stock market valuation metrics, including cyclically-adjusted price-earnings (CAPE) ratio[3]. (Basic…

From eye-balling the chart, it seems to consistently lag. Am I mis-reading it, or is this not actually a predictor?

Re: Show HN: Is the stock market going to crash?

#153

Post by ouid »

rtx wrote: post #135
Animats wrote: post #125

Earlier quoted context omitted.

No, the 2008 crash wasn't a black swan. It just came from the debt side, rather than the equity side. It was clear this was coming. In 2004, I wrote this, on my "downside.com": [1] The next crash looks to be housing-related. Fannie Mae is in trouble. But not because of their accounting irregularities. The problem is more fundamental. They borrow short, lend long, and paper over the resulting interest rate risk with d…

What looks risky now?

student loans.

Re: Show HN: Is the stock market going to crash?

#154

Post by velodrome »

bousaid wrote: post #137
KasianFranks wrote: post #129

Earlier quoted context omitted.

And Bitcoin Ref: http://www.wealthdaily.com/articles/eurozone-turning-to-bitc...

People are downvoting you, but you're not wrong. Bitcoin is legitimately seen as an alternative to gold. So it's not crazy to expect people to buy BTC when shit hits the fan in the fiat markets.

> Bitcoin is legitimately seen as an alternative to gold.

Bitcoin may be an alternative to gold but it is not the same.

1) Gold has intrinsic value.

2) Gold is a tangible asset.

Re: Show HN: Is the stock market going to crash?

#155

Post by arglebarnacle »

GrumpyNl wrote: post #146
rtx wrote: post #135

Earlier quoted context omitted.

What looks risky now?

Everything based on crypto currency.

It only counts if it's something that's riskier than it seems. Everyone knows cryptocurrency is extremely risky, the problem in 2008 was that these packaged mortgage products were far riskier than they appeared, far riskier than they were rated by Moody's, S&P, etc.

Maybe you only meant your comment as snark, but if not it's important to understand the difference between simple risky investments and potential structural flaws in the finance system, like the ones we saw in the financial crisis.

Re: Show HN: Is the stock market going to crash?

#156

Post by PDoyle »

sambe wrote: post #152
pdog wrote: post #69

If you're looking for The Single Greatest Predictor of Future Stock Market Returns[1], here it is: http://www.philosophicaleconomics.com/2013/12/the-single-gre... This is a long read, but it's worth it. The metric can be calculated in FRED[2], and as a predictor of future returns, it outperforms all of the most common stock market valuation metrics, including cyclically-adjusted price-earnings (CAPE) ratio[3]. (Basic…

From eye-balling the chart, it seems to consistently lag. Am I mis-reading it, or is this not actually a predictor?

You're mis-reading it. The blue line is subsequent 10-year performance, so it's already shifted back (left) several years from its natural alignment on the chart.

Re: Show HN: Is the stock market going to crash?

#157

Post by graedus »

charlesdm wrote: post #104
luckydude wrote: post #84

Earlier quoted context omitted.

"occurrences that nobody was aware of and that were only understood afterwards" Umm, I'm no genius but I was managing my mother's money at the time of the 2008 crash. It was very obvious to me that there was going to be a crash, I pulled out of the market in late 2006 and didn't lose a dime in the crash. I think the better statement is "The 2008 crash was obvious but many people were in denial". Again, I'm not a fina…

You can see the writing on the wall now, with stocks being pumped up around the world by central banks and with margin debt at an all time high. The problem is, it could be years before there is a collapse, or it could be tomorrow. That's a lot of yield you might be losing out on. A near similar argument could be made in 2014. You probably could have doubled or tripled your money in that period. And even if there is…

> The problem is, it could be years before there is a collapse, or it could be tomorrow. That's a lot of yield you might be losing out on. A near similar argument could be made in 2014. You probably could have doubled or tripled your money in that period.

All true. I think what makes sense then is not to get out of the market entirely, but depending on your risk tolerance, simply re-balance so that you own less stocks at a time like this, while holding more cash or alternative investments.

Re: Show HN: Is the stock market going to crash?

#158

Post by simonh »

Animats wrote: post #125
misja111 wrote: post #78

The metric used to calculate market overvaluation is interesting but it has little value for predicting a stock market crash. Let's take he last 3 major US crashes: 1987: this crash was caused by automated trading systems which could run wild in the absence of any prevention regulations such as circuit breakers 2000: the collapse of the dotcom bubble 2008: start of the financial crisis caused mainly by opaque credit…

No, the 2008 crash wasn't a black swan. It just came from the debt side, rather than the equity side. It was clear this was coming. In 2004, I wrote this, on my "downside.com": [1] The next crash looks to be housing-related. Fannie Mae is in trouble. But not because of their accounting irregularities. The problem is more fundamental. They borrow short, lend long, and paper over the resulting interest rate risk with d…

The Economist had strings of articles on this, about how the models used to price vast sums in derivatives were fundamentally flawed, the risks to the financial system, lack of regulatory tools to address possible issues. Warren Buffet famously called CDS/CDOs weapons of financial mass destruction. But when people are making money and everything looks sunny side up, warnings like yours are rarely heeded.

Re: Show HN: Is the stock market going to crash?

#159

Post by qubex »

krit_dms wrote: post #61
xphilter wrote: post #36

Earlier quoted context omitted.

Right, but this chart ignores that (as far as I can tell). If US listed companies are going to eat more of the global GDP, then it wouldn't be crazy that the value of the stocks will exceed GDP of the country in which it's listed (i.e., the fact that the value does exceed GDP might not be a precursor to a crash).

There's really no reason why GDP should equal market cap. Companies are largely (especially now, since interest is so low) valued on future income, rather than current income. Look at Amazon and Netflix, both tradin at 200x earnings. This is beacuse investors think they will earn a lot more in the future than they do now. Are they overvalued? who knows.

Indeed, market valuation as a multiple of GDP is hitherto unknown to me. However that's why I wrote partially: foreign assets are factored into the value investors attribute to the stock market as a whole. In retrospect I shouldn't have argued from the standpoint of percentage of GDP.

Re: Show HN: Is the stock market going to crash?

#160

Post by bkanber »

TazeTSchnitzel wrote: post #138
Nursie wrote: post #93

"NaN% more overvalued than just prior to the 2008 financial crisis," I think there might be a few coding errors still lurking in there.

I got that in Firefox, whereas it works in Chrome. Poor cross-browser testing?

Seems to be because all the market data hasn't loaded yet. If you look above it should say "Loading data" under one of the categories in the text.
Post reply on HN