Stock market charts you never saw (2021) • Hacker News Board

Re: Stock market charts you never saw (2021)

#231

Post by astrange » Fri, Jan 20, 2023, 7:59 AM UTC

eatsyourtacos wrote: post #52

cmrdporcupine wrote: post #37

Earlier quoted context omitted.

Sure, but it begs the question what happens when fossil fuel exploitation inevitably is curtailed drastically; either early by necessity because of reasonable legislation, or a bit later because of a stronger ecological collapse or depletion. Solar, wind, or whatever Future Tech is unlikely to have the same direct mine->refine->commodity->sell->use cycle on which a lot of this edifice is built. This could be quite re…

>Wait until people's 401Ks start to explode Maybe we shouldn't have moved to such a completely moronic system them which shifts all the risk to the individual and just "hope" they magically make money on something they have no control over. It all works until it doesn't.

We didn't, we have Social Security. You don't have to contribute to a 401k. And you can keep it all in a money market fund if you want; it'll still be tax advantaged.

Re: Stock market charts you never saw (2021)

#232

Post by astrange » Fri, Jan 20, 2023, 8:02 AM UTC

ilikehurdles wrote: post #20

recuter wrote: post #10

If I was alive in 1923 and stashed away $8 million in ̶c̶a̶s̶h̶ (Edit: 100y bonds) would only be worth about $140 million today. Had I put it into some fancy ETF (Recall Vanguard dates back only to 1975, but whatever) I'd be a billionaire. That's it, that is the entire difference of less than an order of magnitude. Don't reckon the nickels and the dimes matter much to centenarians. Most people don't even have $8000 t…

If you had $8million in 1923 cash stashed away, you’d have $8million in 2023 cash today. Ie you’d have lost about 94% of your buying power.

1923 dollars are worth more than face value to collectors, but that's marginal value so you'd have to sell them pretty slowly.

Anyway, that's what you get for not contributing to money velocity. It's not designed as a savings product, so don't save with it.

Re: Stock market charts you never saw (2021)

#233

Post by astrange » Fri, Jan 20, 2023, 8:05 AM UTC

Invictus0 wrote: post #144

zitterbewegung wrote: post #129

Earlier quoted context omitted.

What is your suggestion to do instead? Owning a non index fund will have a fee of at least 1% Putting it under your mattress makes you lose from inflation. I'm not sure doing 60 / 40 stocks and bonds could be another solution.

Think about your investments intelligently instead of looking for a guaranteed sinecure.

Do not do that. Thinking about investments violates like four of the rules.

https://www.bogleheads.org/wiki/Bogleheads®_investment_philo...

The purpose of financial advisors is to stop people from thinking; if you just stop thinking on your own you'll never need one.

Re: Stock market charts you never saw (2021)

#234

Post by bionsystem » Fri, Jan 20, 2023, 8:21 AM UTC

I read a few books on early 20th century finance and trading last years, some stories are quite fascinating to say the least. I really like this period of time, everything both in the economy and finance / stocks was quite reckless, it still is today of course but it was on a whole other level with bucket shops, insider trading, fake tips, etc.

This work is interesting because few people were really doing charts at the time. Prices were recorded as quotes (price+volume) on a "tape" and most people would just read numbers. "Indices" would barely exist and people would construct their own with a poor understanding of how to weight companies in an average (most averages were weighted by stock prices, instead of market capitalisation). And people would talk in $ moves a lot instead of %, meaning that for a lot of people gaining $1 on a $30 stock would be the same as gaining $1 on a $100 stock.

Re: Stock market charts you never saw (2021)

#235

Post by bionsystem » Fri, Jan 20, 2023, 8:28 AM UTC

trompetenaccoun wrote: post #230

bagacrap wrote: post #193

Earlier quoted context omitted.

Is there a strategy that reliably beats buy and hold? Obviously not or everyone would do it. And no investment professional worth their salt would advise to buy individual companies to hold for the long term (almost all will go out of business or underperform eventually) so I'm not sure what purpose the survivorship bias comment serves.

Everyone doesn't know how to successfully invest or there wouldn't be so many middle class and poor people. Buying and holding (a broad index tracker) seems like the best strategy for someone who doesn't know about the businesses or can't be bothered to follow the market. It's the most passive strategy. Imo the mistake most make is they mentally compare it to themselves reading a bit online and then picking stocks ba…

There are hedge funds beating markets over and over, some have been macro driven, some are equity driven, some are quant driven... Now of course it's a pareto law, only a handful out of 100 will get all the excess return and the others will stagnate or underperform indices (or even fail completely). But the same goes for building any company, most of them fail and we watch winners in awe.

Re: Stock market charts you never saw (2021)

#236

Post by pjc50 » Fri, Jan 20, 2023, 8:29 AM UTC

autokad wrote: post #137

pjc50 wrote: post #115

Earlier quoted context omitted.

> since 1928 dividends plus inflation accounted for 99.7% of the nominal wealth produced, as of 2008, by investing in stocks. OK, so strip out inflation to get real rather than nominal returns, and it becomes "stock investment produces almost all its returns in dividends over a long period". Which is .. not that surprising? Because dividends are ultimately why people buy stocks in the first place? The present value o…

> Because dividends are ultimately why people buy stocks in the first place? I would disagree, I feel like the mojority of stonk owners think dividends are passe companies, and a real company would reinvest its earnings or buy back stock. I disagree with these people. I think a company that has no intention of paying a dividend is merely an over produced digital collectible.

I count stock buybacks as "dividends relabelled for tax purposes".

Re: Stock market charts you never saw (2021)

#237

Post by devops000 » Fri, Jan 20, 2023, 9:09 AM UTC

snow_mac wrote: post #126

devops000 wrote: post #124

It’s very common nowadays to see people suggest investing into S&P500 ETFs and keep them forever. More then 20% of US population owns stocks. I think we are near a change into this paradigm.

What alternative would you suggest?

Picking stocks only if they are likely to perform better in the future instead of only because they belong to US market. Aka value investing.

Or alternatively, have a basic macroeconomic understanding knowing when enter/exit the market. This might not let you pick up the top/bottom but at least is more intelligent than "staying in the market because it was always trending up".

Re: Stock market charts you never saw (2021)

#238

Post by dmurray » Fri, Jan 20, 2023, 9:38 AM UTC

Galanwe wrote: post #225

compumike wrote: post #210

Earlier quoted context omitted.

That’s correct: their charts are split-adjusted but that’s all.

Dividend adjustment wouldn't really matter in this study. The price discount at dividend ex date should match the price increase post earnings announcements, so it's netted and disappears once you compute >=quarterly returns.

This is not correct.

The price increase at earnings announcements is (to a first order approximation) indicative of the extent to which the company's earnings exceeded the market's expectations. It's as likely to be positive as negative. Otherwise you could buy the company's stock the day before the earnings announcement and get yourself some free money.

Re: Stock market charts you never saw (2021)

#239

Post by saberience » Fri, Jan 20, 2023, 9:38 AM UTC

bionsystem wrote: post #235

trompetenaccoun wrote: post #230

Earlier quoted context omitted.

Everyone doesn't know how to successfully invest or there wouldn't be so many middle class and poor people. Buying and holding (a broad index tracker) seems like the best strategy for someone who doesn't know about the businesses or can't be bothered to follow the market. It's the most passive strategy. Imo the mistake most make is they mentally compare it to themselves reading a bit online and then picking stocks ba…

There are hedge funds beating markets over and over, some have been macro driven, some are equity driven, some are quant driven... Now of course it's a pareto law, only a handful out of 100 will get all the excess return and the others will stagnate or underperform indices (or even fail completely). But the same goes for building any company, most of them fail and we watch winners in awe.

Most hedge funds in fact DON'T beat the market though. In almost every case you would have been better to buy index funds and hold versus put your money in a hedge fund.

Re: Stock market charts you never saw (2021)

#240

Post by metaphor » Fri, Jan 20, 2023, 10:23 AM UTC

sleton38234234 wrote: post #160

zie wrote: post #100

Earlier quoted context omitted.

The other option is they raise taxes, cut spending and they actually pay those debts off. All debt comes due eventually, you can choose to go bankrupt or you can choose to pay it. But if neither option happens in your lifetime, you don't need to care, if you are just trying to optimize for yourself.

>> you can choose to go bankrupt or you can choose to pay it. There's another option. One that's far more politically favorable: You simply take out more and more debt, until finally the whole world sells US treasuries. at that point the fed prints unlimited amount of money to buy up all that debt. And when the US pays interest on that debt, it just pays it to the federal reserve which then sends it back to the US. T…

> And when the US pays interest on that debt, it just pays it to the federal reserve which then sends it back to the US.

Uhh yeah, about those remittances[1]...

https://fred.stlouisfed.org/series/RESPPLLOPNWW