The main question - when, if ever, will we return to a near zero interest world.
Are tech stocks now good value?
31–40 of 90 posts
Re: Are tech stocks now good value?
#32They have a term for this kind of article on Wall Street: Trying to catch a falling knife " stocks have been beaten up. It's time to buy now!" Like clockwork, you can count on those stories appearing after a crash.
It is true that market timing is always dubious. But that also means that there's never a wrong time to invest in the market as a whole. Individual stocks when crashing are dangerous if you can't outsmart the reason they are crashing, but in aggregate stocks will go up by a modest amount on decade long scales.
I felt weird about that advice a few months ago, when the market seemed genuinely overpriced as a whole and due for a correction. But a decade from now the difference between investing six months ago, now, or six months from now will be just part of the noise. The right time is visible in retrospect, but since you can't do that you can at least pat yourself on the back for getting a better deal today than you would have gotten a few months ago.
Re: Are tech stocks now good value?
#33Earlier quoted context omitted.
They have a much better term that really captures this stuff it is, "a martingale." Edit: Just to clarify, a martingale is a bet that's equally likely to go either way and has zero expected value.
If stock prices were martingales, you would not be able to predict whether they will continue to drop or rebound after a crash.
Is it not the case?
Re: Are tech stocks now good value?
#34They have a term for this kind of article on Wall Street: Trying to catch a falling knife " stocks have been beaten up. It's time to buy now!" Like clockwork, you can count on those stories appearing after a crash.
They have a much better term that really captures this stuff it is, "a martingale." Edit: Just to clarify, a martingale is a bet that's equally likely to go either way and has zero expected value.
The origins of the word martingale and why it is used to refer to various betting strategies is interesting and obscure: https://ergodicity.net/2012/04/11/the-history-of-the-marting....
Probably the etymology that makes most sense is that it refers to people from Martigues who were considered to be naive. So people knew that the simple strategy of “betting all that was lost” was horrible even in Middle Ages.
Re: Are tech stocks now good value?
#35They have a term for this kind of article on Wall Street: Trying to catch a falling knife " stocks have been beaten up. It's time to buy now!" Like clockwork, you can count on those stories appearing after a crash.
And it's sort of self-fulfilling, right? If these stories have a big enough impact, a lot of people will buy the stocks and they will actually stop falling.
The majority of money is in passively managed index funds. individual investors don’t move the market for the most part outside of the meme stock craze.
Re: Are tech stocks now good value?
#36I think so. I've started buying shares every month in Cloudflare and Shopify - use their products and think they have fantastic momentum and great teams working on industry-defining tech. Disclaimer - I don't work/have never worked at either
This is the way to do it, IMO. - Do a proper valuation of the company - If the price is right, start Dollar Cost Averaging into a position during a downturn No one can perfectly time the market. However, we certainly can approximate the proper value of solid companies, and we generally can tell when sentiments and market conditions are biasing low. (Disclaimer: I am not a financial advisor. Do your own research, etc.…
> If the price is right
That is doing a lot of the work. In particular, you need to be able to predict what interest rates will be doing in the future.
Re: Are tech stocks now good value?
#37"Are tech stocks now good value?"
Most probably aren't.
Re: Are tech stocks now good value?
#38They have a term for this kind of article on Wall Street: Trying to catch a falling knife " stocks have been beaten up. It's time to buy now!" Like clockwork, you can count on those stories appearing after a crash.
It is true that market timing is always dubious. But that also means that there's never a wrong time to invest in the market as a whole. Individual stocks when crashing are dangerous if you can't outsmart the reason they are crashing, but in aggregate stocks will go up by a modest amount on decade long scales. I felt weird about that advice a few months ago, when the market seemed genuinely overpriced as a whole and…
> but in aggregate stocks will go up by a modest amount on decade long scales
They have in the past. There is no guarantee that they will continue to, although I do personally suspect they will.
Re: Are tech stocks now good value?
#39Earlier quoted context omitted.
If stock prices were martingales, you would not be able to predict whether they will continue to drop or rebound after a crash.
Is it not the case?
Yes, I probably botched the grammar.
But parent was implying that a martingale means that after a crash, stock prices rebound.
Re: Are tech stocks now good value?
#40They have a term for this kind of article on Wall Street: Trying to catch a falling knife " stocks have been beaten up. It's time to buy now!" Like clockwork, you can count on those stories appearing after a crash.
And it's sort of self-fulfilling, right? If these stories have a big enough impact, a lot of people will buy the stocks and they will actually stop falling.
IMO - Retail buys based off of articles in the Economist and stuff Cramer says. Institutional money will have different criteria for what constitutes "value" and where medium-long term speculation might be warranted. Based on the above the detrimental effects of a falling knife are clearly going to affect one group vs the other.