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When buying the dip doesn’t work: An analysis of the dot-com crash

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Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#261
post #258
post #253

Earlier quoted context omitted.

You think you are entitled to returns just because you took a risk ? Sorry bud, sad to break it to you but it does not work that way. That's the idea that I am criticizing. Risk might be necessary, but never sufficient. BTW I don't think, you think that way, but neither should you. Gratuitous condescension poisons the well.

I never said I "think [I am] entitled to returns just because [I] took a risk". There is no entitled , it's simply a trade-off. It's a basic precept of investing. In a very simplified way - higher returns require higher risk of invested capital - why else would you invest in something higher risk unless the return justifies it? And likewise, people will accept lower returns if they know the risk is low. Nobody is doi…

> I never said I "think [I am] entitled to returns just because

Exactly! Why did you think I said anything about not taking risks. I didn't say that either. I was misinterpreting on purpose to show yours.

> "if my goals change, I don't want to lose money"

I did not say that either. I vehemently agree with everything else that you said.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#262
post #215

Earlier quoted context omitted.

> What really changed is the Russia-Ukraine war, this goes with higher energy and higher food prices Green transformation is the real cause of high energy and food prices. EU's Fit for 55 gave Putin green light to invade Ukraine...

Lol, very much in the contrary. Had the EU invested heavily in a proper Green New Deal (in ~2010-11 for example, around the time recovery was needed, instead of implementing austerity), we would have robust economic growth instead of a decade of stagnation, and near complete independence of Russian oil and gas, so much so that we could turn the taps off on 24/Feb and suffer only mild consequences.

> Had the EU invested heavily in a proper Green New Deal (in ~2010-11 for example

Meantime in the real world in 2021 EU made strategic decisions that guaranteed high food and energy prices for next couple of years and made Putin think that he has a window of when Eu is completely at his mercy. (Putin made a mistake short term. Long term he surely forced EU's hand to go for alternative sources of energy).

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#263
post #10

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…

I hope this is true but I also feel like we no longer follow any kind of logic after 2008, we totally detached from reality.

> I hope this is true but I also feel like we no longer follow any kind of logic after 2008, we totally detached from reality.

You're not the only one, consider that the financial crisis was the per-cursur and the necessary backdrop for why Bitcoin was created; this system went from being an arcane, but seemingly reliable way to grow the economy up until 2008 when the house cards fell down and we realized most business models were all based on the 'greater fool theory.'

Monetizing everything and squeezing people for every nickle and dime for essentials became the norm: education, medicine, food, energy etc...

Honestly, this system only benefits a small fraction of the Human Population, but it ultimately relies on their continued exploitation. The great resignation has been a somewhat limited counter-banace but it's still not addressing the underlying fact that this system is so utterly broken and it cannot sustain itself without perpetual intervention from the Central Banks.

Their is nothing Capitalist about this system, it's feudalism with a very obvious plutocratic bend with it's aim to maintain itself via nepotism and corruption.

This isn't a criticism of Capitalism, though I have come to the conclusion that it is ultimately a flawed system that relies on perpetual and infinite growth models, and does an even poorer job at pricing-in externalities that have had and will continue to have even worse devastation: be it economical or environmental.

As an Anarcho-capitalist I agree it is the best of all the other worse system: I just think we have seen the limitations that even the freest markets can avail so long as the parallel system can destroy with impunity, but justify itself as the only thing that keeps the World from succumbing to utter chaos.

When in reality, we live in that chaos and have been in chaos for most of my entire existence (middle millennial) with only the thin veneer of order, what's remarkable is we haven't completely obliterated ourselves in that time--Russia is doing what most Nation-States have done since the advent of it's existance, and what the US did that made it the ire of Humanity in the last decade in the Middle East. They seek to consuldate and extract for thier own vested interests, often to the detriment of it's own populace as it really only seeks to maintain it's own order and enrich an already obscenely wealthy political class which curries favour from the business class.

Before, I used to watch Black Mirror or an Adam Curtis documentary solely for it's entertainment value, now I'm starting to see how prophetic much of what they focused on not just came into reality, but started to have more dire implications than was even portrayed.

In short, while those of us in the BTC community haven't the grounds to declare we have made a utopia by any stretch of the imagination, I'm just glad we have learned our lessons and realized the inevitable demise of the financial system is starting to become clearer to more and more.

Where this leads can be a horrible path, and we have had glimpses of it: the Russian invasion of Ukraine is over hubris and distorted views of the Soviet Union.

Just imagine what it will look like if we are fighting over water or food as we have for most of our Specie's existence?

People here benefited, or stand to benefit the most from this corrupt system: vesting is the only real way to make any real gains as it provides the bulk of most TC. Their inflated salaries at FAANG mean less when they hear the typical story about stocks getting IPO'd and even their first janitor team can afford to live in a mansion in Palo Alto and send his kids to Stanford.

But the truth is this model is utterly broken, just look at the environment and woke culture that the valley has become: homelessness, social inequality and worsening substance and mental health issues etc...

You'll just never get the HN crowds to go along with it because most are still just trying to 'get theirs' or have already 'gotten theirs' and are now too comfortable but keep telling themselves that rent-seeing is ok so long as it's them and they regard themselves as a 'disruptor.'

It's pathetic and a shame to see, to be honest. To see so many talented people waste their collective skills at a time when climate change, and shortages of everything are starting to be the norm: you'd think if they had any capacity to act in anything but their own self-interest and had a modicom of self-perseverance they'd try to sepnd at least some time trying to address these problems.

What good is money if this is this the World we live has always been my core moral compass that doesn't seem to be shared or well received when I work in tech. There is just a lots of lip-service but almost no deeds to back this up, it's a really just a bad platitude. One of many, unfortunately.

As a person studying AI and ML: you'd think that for a class of people who go on about 'meritocracy' being the end-all to explain why they are exceptional and are where they are and where most are they it's just hiding behind the limited window they have where the tech oligarchs allow them to be well compensated: but be under no illusion, they will quickly dispel with them when it's AI solution is as palatable is it can be, even if it means delivering a more mediocre solution and experience.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#264
post #217

Earlier quoted context omitted.

Past performance is not a predictor of future results. If we continue to grow GDP (~energy consumption) at about 1%/y, we’ll boil oceans in 400 years. That’s what exponential growth means.

Most of that GDP growth will not be on Earth in 400 years.

Hand-wavy predictions like this scare me - it suggests people don't understand space travel or the distances involved at all.

Sure, if you think of the Earth as a game of SimCity plus Kerbal Space Program, these discussions about exponential growth are interesting. However, they miss the part where the intervening 30-100 years become literal hell on Earth while space travel ramps up.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#265
post #260
post #248

Earlier quoted context omitted.

We are far from the limits of thermodynamics. You'd have to wait till nearer to the heat death of the universe for that to have an effect on the economy.

Define far. Gasoline engines eg are within 2x of Carnot limit. Not much room for improvement.

> Not much room for improvement.

Only for gasoline engines. And the efficiency limit isn't the limit of possible sources of energy for work. Future engines could be electric, and the power source could be fusion.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#266
post #16

Earlier quoted context omitted.

> The COVID fiscal canon blew growth and inflation skyward. This is not true and has wrongly given credit to people who have said, since 2020, that COVID relief would cause inflation. Our current inflation is driven by supply chain issues (unrelated to COVID relief) and rising oil (unrelated to COVID relief.)

From what I've read, our current inflation is due to combo of inflated asset prices causing mortgages and rents to skyrocket along with corporate greed raising prices "because of inflation".

You should probably widen the pool of what you read. You're not wrong (well, corporate greed tends to be a bit of a bogeyman), but it's certainly reductive.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#267
post #83

Earlier quoted context omitted.

Past performance is not indicative of future results. Japan stock market JP225 didn't recover yet from 1990 crash.

Yea so buy land if you’re so paranoid about becoming Japan. It’s an island nation with a very unique history. Not a great counterpoint to current US and global economics.

Buying land in Japan isn't a great idea (except to live on it). You have to pay a hefty annual tax on it. Land even with property on it is so often abandoned they have a word for it and many marketplaces where you can buy abandoned land from the tax office.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#268
post #261
post #258

Earlier quoted context omitted.

I never said I "think [I am] entitled to returns just because [I] took a risk". There is no entitled , it's simply a trade-off. It's a basic precept of investing. In a very simplified way - higher returns require higher risk of invested capital - why else would you invest in something higher risk unless the return justifies it? And likewise, people will accept lower returns if they know the risk is low. Nobody is doi…

> I never said I "think [I am] entitled to returns just because Exactly! Why did you think I said anything about not taking risks. I didn't say that either. I was misinterpreting on purpose to show yours. > "if my goals change, I don't want to lose money" I did not say that either. I vehemently agree with everything else that you said.

Ok, then I misunderstood and am very confused.

You said "This a very popular idea but I don't fully accept it. Goals and desires are not static. They are path dependent and adaptive. I want a funding scheme that's able to fund that."

Which I interpret as "I reject the idea of setting some financial goal decades into the future. I want a scheme that is flexible and can accommodate changes to how I want to use my money."

How is that different than "If my goals change, I don't want to lose money."?

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#269
post #29
post #10

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…

> dissuaded capital from financing the real economy and instead encouraged herding and levering up in the financial economy for returns. i don't really agree with this - the money used to purchase financial products don't disappear, because for every product bought, there was a seller. This seller now has cash, which would be invested elsewhere. The only concern is low interest rates, which makes the hurdle for any i…

> i don't really agree with this - the money used to purchase financial products don't disappear, because for every product bought, there was a seller. This seller now has cash, which would be invested elsewhere.

And buying stocks is financing real projects, and you only get those returns if they manage to do something actually useful, this is helping to finance and promote economic activity, how is that taking money away from the "real" economy?

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#270
post #221

Earlier quoted context omitted.

There is an saying: The stock market is not the economy. The US economy is still growing faster enough for corporations to fight off the effects of inflation. (People / workers are a different social and economic issue.) The Fed will continue to raise rates and wind down its balance sheet in an orderly manner. Eventually, after enough rate rises, inflation will slow, and the economy will reach a new equilibrium betwe…

Inflation will already slow (oil stopped going up), GDP prints are coming in negative, rates are only now accelerating while economy is slowing down. How this doesn’t end in a recession is beyond me. Mortgage workers have been laid off already due to that. Real economy is next on a lag due to demand destruction.

Recession needs just two quarters of negative gdp. Q1 had negative growth. So will q2. We are already in a recession
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