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Stocks Off Sharply as Market Upheaval Grows

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341–350 of 433 posts

Re: Stocks Off Sharply as Market Upheaval Grows

#341

Earlier quoted context omitted.

The problem is that many people are continously predicting a crash. If you grant that they're right now, you also have to grant that they've been wrong for years . Even a broken clock is right twice a day.

Not fair. A well-regulated system would NEVER crash. That this one does, and folks predicted it, has nothing to do with timing, and everything to do with cogent analysis of a flawed system.

Predicting market crashes is like predicting the end of the world.

When it actually happens (in both cases), there will be some subset of people whose published prediction is close to or even exactly matches the date when it finally did happen, and those people will gloat about it.

But for every one of those people there are thousands, possibly millions or more others whose prediction dates came and went with no catastrophe occurring. Given the huge number of people who publish their predictions, then, we have to ask which of these is more likely:

1. The people who got the date right -- either exact, or within a certain small window of the actual date -- had some genuinely deep insight missed by others, which allowed them and only them to make a correct prediction, or

2. Given a large enough segment of people making predictions, some subset of them will have their predicted date match the actual date purely by chance. For example, predicting market trends five years out only gives five years in which something can happen, or twenty quarters, or sixty months, or 260 weeks, or 1,826 days to peg your predictions onto. If the number of people making predictions is large enough, all dates are likely be covered by at least one prediction.

Re: Stocks Off Sharply as Market Upheaval Grows

#342

Earlier quoted context omitted.

The FTSE is where it was 17 years ago. Since this time everything has gotten way more expensive. Anyone in the UK following this advice from age 20 to 35 is staring down the barrel of working forever. The problem is they have a share in growth in the UK over the past 15 years and that growth is next to nothing. IMHO the old advice needs to be taken with caution. This is not your dad's market.

1) If you put all of your money in exactly 17 years ago, then, yes. You would be at the same place. 2) It still would've been paying you dividends that entire time 3) If you, rather than investing an imaginary lump sum at the top of the market 17 years ago, invested slowly as your savings accumulated over time, you would be ahead. The FTSE hasn't exactly been sitting still all those 17 years.

I'm not sure point 3 is correct. Buying regularly would have seen you buy below today's price and above it.

Re: Stocks Off Sharply as Market Upheaval Grows

#343

Earlier quoted context omitted.

The FTSE is where it was 17 years ago. Since this time everything has gotten way more expensive. Anyone in the UK following this advice from age 20 to 35 is staring down the barrel of working forever. The problem is they have a share in growth in the UK over the past 15 years and that growth is next to nothing. IMHO the old advice needs to be taken with caution. This is not your dad's market.

The FTSE 100 total return index is at 5,898.87 i.e. the levels of November 2012: https://www.google.com/finance?cid=15424700

google finance for that goes back to 2012 and no further!

Re: Stocks Off Sharply as Market Upheaval Grows

#344

Earlier quoted context omitted.

> 0% interest rate for several years is not healthy That's not healthy or unhealthy. It's just a thing. > QE is not healthy Ask Europe that didn't do quantitative easing (or did too little too late) which economy they'd rather have right now. And it's no longer a thing - because it ran its course and largely worked. >Inflating assets is not healthy Some classes of assets are inflating. Some are deflating. Again it's…

>> 0% interest rate for several years is not healthy > That's not healthy or unhealthy. It's just a thing. I agree with you generally, but this response is a little silly. What does "it's just a thing" even mean? Given that there's no ironclad economic consensus on this question yet, it's more comfortable to not spend too much time sitting on the ZLB. Now that doesn't suggest anything specific about what costs should…

[deleted]

Re: Stocks Off Sharply as Market Upheaval Grows

#345

People's investment philosophy will vary and tolerance for risk will play a major role in it all. My own view is this, and it is based on a lifetime of having made all the typical mistakes. Steady is the best way to go for your investable funds. That means, go with stocks for a decent segment of your investments but temper this with investments that will help preserve capital when things get rocky. Keep a ratio betwe…

The FTSE is where it was 17 years ago. Since this time everything has gotten way more expensive. Anyone in the UK following this advice from age 20 to 35 is staring down the barrel of working forever. The problem is they have a share in growth in the UK over the past 15 years and that growth is next to nothing. IMHO the old advice needs to be taken with caution. This is not your dad's market.

You have to adjust for dividends.

Re: Stocks Off Sharply as Market Upheaval Grows

#346

Earlier quoted context omitted.

1) If you put all of your money in exactly 17 years ago, then, yes. You would be at the same place. 2) It still would've been paying you dividends that entire time 3) If you, rather than investing an imaginary lump sum at the top of the market 17 years ago, invested slowly as your savings accumulated over time, you would be ahead. The FTSE hasn't exactly been sitting still all those 17 years.

I'm not sure point 3 is correct. Buying regularly would have seen you buy below today's price and above it.

Dollar cost averaging lowers risk and increases returns. If you can afford it, you may also want to have a look at value averaging.

Re: Stocks Off Sharply as Market Upheaval Grows

#347

Earlier quoted context omitted.

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

A vanishing middle-class is not healthy. Everyone's been picking at all your claims except this one, so let me jump in on this part. You've been drinking too much of the kool-aid. It's certainly fashionable for talking heads to spout platitudes about the middle class, but it doesn't match the real world. The picture that's being painted is that the vast majority of us will be living lives as serfs, while a group of o…

>>In fact, the VAST majority of Americans are better off than they ever have been. Check out this [1], for example, based on US census data. Yes, the middle class has been disappearing, but they haven’t fallen into the lower class, they’ve risen into the upper class http://www.aei.org/publication/yes-the-middle-class-has-been... --

You need to pick your sources a little more carefully. The organization whose article you cited is an ExxonMobil-funded conservative thinktank that was involved in some notable controversies, such as trying to bribe scientists with $10,000 to critique the International Panel on Climate Change.

http://www.theguardian.com/environment/2007/feb/02/frontpage...

I'll be more specific with my criticism: the alleged increase in upper-middle class membership tracks extremely closely to women entering the workforce. Note that the data they use is family income, although the author has conveniently omitted that keyword from the graph title.

Re: Stocks Off Sharply as Market Upheaval Grows

#348

Earlier quoted context omitted.

> QE is not healthy QE is over (though, I wouldn't be shocked to see more). > 0% interest rate for several years is not healthy. Why not? > 100+ % debt:GDP ration is not healthy. Why not? I mean, I wouldn't call the US economy "flourishing" or anything. But it's not sick, and relative to the rest of the world it's looking pretty good (as the strong dollar and low rates imply).

QE is 'over'(for now), but it has shaped today's economy. There may have QE4. Artificially low interest rates is the main cause of most malinvestment and inflating assets. Usually ends with a pretty rough recession. For debt, I could just say 'Greece/Argentina/Brazil/Japan/...', but(yes) these aren't the world's reserve currency. U.S could just pay its debt to China by 'printing money' Still, it also severely hurt Am…

> these aren't the world's reserve currency. U.S could just pay its debt to China by 'printing money'

China isn't the entity which holds the US debt, the US citizens do. Besides, printing money doesn't make you able to pay debt, it just devaluates the money you already have. The early 20th century has shown us all that printing money won't help you.

Re: Stocks Off Sharply as Market Upheaval Grows

#349

I'm just injecting some alternative thought here but I think one major question that needs to be asked about the health of the economy is: "How much of the weighted average person's day is that person spending on survival". I don't see how slow shift to a 60-hour instead of a 40-hour work week is indicative of a healthy economy but I could be wrong. To me it seems that survival is taking more and more time when it sh…

Weighted by what?

I was thinking of clustering. If you have a large group of people in a general income sub-group then it would weigh more than fewer people in another income subgroup. The point of weighing is that margin-based models depend heavily upon a large consumer base and only certain consumer bases are of any significant size.

Re: Stocks Off Sharply as Market Upheaval Grows

#350
post #98

Earlier quoted context omitted.

> What are you going on about? If capitalism is a race to the bottom, we would have reached it a long time ago. Only for a long time it had internal pressure (workers demands) and external pressure (the Cold war etc). Else we'd be still with child labor, 14 hours work day and such...

Workers and their demands are part of capitalism, as one of the sides of the labor market.

Things like Taft-Hartley outlaw secondary strikes.
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