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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

#351

Post by baq »

geeB wrote: post #275
adastra22 wrote: post #229

Earlier quoted context omitted.

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

With a long enough time horizon, the GP consideration ("If we continue to grow GDP (~energy consumption) at about 1%/y, we’ll boil oceans in 400 years.") will still come true even if expanding in space. A sphere expanding around earth at the speed of light grows quadratically in the outer boundary and cubically in volume, and will be overcome eventually by any exponent > 1. I'm pretty convinced that increasing human…

the dataset is interesting, thanks for linking to it. the relationship is for now linear, which I believe doesn't invalidate the point that you and I both make that exponential is not sustainable. the GDP-energy consumption decoupling must also become exponential, which I lack vision for how to achieve.

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

#352

Post by layer8 »

doopy1 wrote: post #332
layer8 wrote: post #306

Earlier quoted context omitted.

Investing in the stock market has the general assumption that, a priori, stocks are more likely to rise than to fall at any given point in time. Under that assumption, the all-at-once strategy has the better expected outcome. Of course, you can be unlucky and end up buying the all-time-high just before a crash. You can avoid that risk by splitting up the investment, at the cost of lowering the overall expected value.…

Peter Lynch had a pretty interesting talk where he said that on average the stock market has a sizable dip every few 2-3 years, meaning it's lower at the end of that year than it was at the beginning. Generally though, it goes up over time.

Right, up to now the maximum interval where the market didn’t go up to a new all-time-high is about 15 years, but so far it always ended up reaching a new all-time-high in the end.

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

#353

Post by weberer »

scrivna wrote: post #120
rubidium wrote: post #100

Earlier quoted context omitted.

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.

The UK is at more or less the same price as it was in 2000. France same as 2008. Meanwhile SPY is up 2.75x in that period. The US seems to be the anomaly. Value doesn’t always go higher. Maybe the USA is special, maybe not.

I'd wager most of that difference is due to the USA's tech industry growth.

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

#354

Post by adastra22 »

StireFarter wrote: post #264
adastra22 wrote: post #229

Earlier quoted context omitted.

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.

I started my career at NASA. I'm working on an asteroid mining startup. I'm well aware of the vastness of space :)

The GP said 400 years. That's the time since the age of exploration until now. That's a vast era of time, and exponential technology development goes both ways.

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

#355

Post by tsimionescu »

chii wrote: post #66
tsimionescu wrote: post #58

Earlier quoted context omitted.

Given that global warming will cause the global economy to contract one way or another within the next 100 years (either we willingly contract to soften the blow, or keep going and producing more greenhouse gases until a massive crash), I really don't think this is the right time to think in these terms.

Why can't technological advancement stave off climate change damage? Why cant renewables replace fossil fuels, and continue human expansion? Why can't space exploration and settlement be where the future growth occurs?

> Why can't technological advancement stave off climate change damage?

What technology in particular could stop the oceans from rising and swallowing much of today's southern coastlines, and what technology in particular could reduce wet-bulb temperatures across most of the world's south below 50C, the point where healthy adult humans with access to infinite water will die of heat stroke?

> Why cant renewables replace fossil fuels, and continue human expansion?

Because renewables are not reliable, rely on rare metals, and can't replace the huge amount of energy produced by oil. Someone was making a calculation the other day that replacing the entire fleet of vehicles in the USA with electrical cars would require doubling the electricity production of the states. Do you really think that's possible in 50 years, while also replacing all gas and coal plants with renewables?

Also, there are huge areas of industry that use oil or natural gas for many reasons other than energy - plastics, synthesizing NH3 for fertilizer and other uses.

> Why can't space exploration and settlement be where the future growth occurs?

Because we are nowhere near having the technological advancement needed for space settlement that would do anything other than cost resources. Perhaps there is some small chance of having a research base on Mars or the Moon within the next 50 years, akin to the ISS, but ideas of "colonizing Mars" are beyond sci-fi at this point. We couldn't even colonize Antarctica with current technology.

Besides, there's nothing on Mars that we don't have much more easily accessible on Earth - no rare metals, no crop fields, no spices, no native workers we could import as slaves, no cotton or anything that could even conceivably resemble the existing reasons for colonization. And lest you think anything else, there is nothing we can conceivably do to the Earth that would make it anywhere near as inhospitable as Mars. Even the worse possible consequences of a Nuclear War would not leave Earth as radioactive, poisonous, cold, or otherwise inhospitable as Mars is today.

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

#356

Post by tsimionescu »

PeterisP wrote: post #123
tsimionescu wrote: post #58

Earlier quoted context omitted.

Given that global warming will cause the global economy to contract one way or another within the next 100 years (either we willingly contract to soften the blow, or keep going and producing more greenhouse gases until a massive crash), I really don't think this is the right time to think in these terms.

I believe the latest IPCC report on climate change expected outcome even for the worst scenario had a noticeable decrease in the rate of growth of the global economy - not a contraction, just slower growth. We do not seem to be on track for a global contraction of economy, not even in the face of climate change. And economic growth is already (though not that recently) somewhat decoupled from growth in greenhouse gas…

> I believe the latest IPCC report on climate change expected outcome even for the worst scenario had a noticeable decrease in the rate of growth of the global economy - not a contraction, just slower growth. We do not seem to be on track for a global contraction of economy, not even in the face of climate change.

The reports do talk about economic contraction after the year 2050 if we don't reach the 2 C temperature goals. They also don't model the likely resource wars that will happen if large parts of Bangladesh, India, Pakistan, Mexico etc will become uninhabitable by the end of the century, due to rising temperatures and water levels.

> And economic growth is already (though not that recently) somewhat decoupled from growth in greenhouse gas emission, so any actions taken to reduce climate consequences do not have to be at the cost of stopping global growth, much less intentionally contracting global economy

The IPCC reports says that GHG emissions increase is mostly proportional to GDP increase throughout all regions, with a significant, though smaller, contribution from population increase. It's also notable that GHG emissions continue to increase - we are not anywhere near a plan for net 0, and nothing suggests so far that we are even likely to start reducing GHG emissions, globally or even in any particular region.

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

#357

Post by gabereiser »

zmgsabst wrote: post #310
gabereiser wrote: post #126

Earlier quoted context omitted.

You just described a hobbyist. Institutions don’t sit on cash for that long, nor do they buy S&P in any significance. [0] Berkshire Hathaway - https://www.dataroma.com/m/holdings.php?m=BRK

Yes — I called it ironic because a hobbyist sitting on cash out performed the market over the past six months. Institutions “making moves” aren’t magic — and often fail to beat indexes, which in turn failed to beat cash over the past six months. Sometimes the hobbyist mindset wins.

>sometimes the hobbyist mindset wins.

In this case, you’re absolutely right. Had they just sat on it they wouldn’t have the losses they do today, furthering the panic selling.

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

#358

Post by cudgy »

landemva wrote: post #96
refurb wrote: post #33

Earlier quoted context omitted.

Your strategy sounds like "pick winning stocks"? A strategy which has been show to produce (on average) worse returns than index investing. Index investing has produced a ~200% return in the past 15 years (from 2007 peak to now). Not sure what you mean by "a chance of seeing a profit in your lifetime".

200% in 15 years didn't keep pace with my house assessment from county tax lady. And I got to use my house!

Kind of the opposite of diversification though. Houses burn down and neighborhoods change, sometimes for the worse. I knew someone that bought a house in 1972 for $70,000 and sold it in 2015 for about $70,000. Real estate is not all roses and candy.

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

#359

Post by cudgy »

alar44 wrote: post #47
refurb wrote: post #33

Earlier quoted context omitted.

Your strategy sounds like "pick winning stocks"? A strategy which has been show to produce (on average) worse returns than index investing. Index investing has produced a ~200% return in the past 15 years (from 2007 peak to now). Not sure what you mean by "a chance of seeing a profit in your lifetime".

Parent has literally no idea what he's talking about. Investing in indexes has always worked. Always. Over all time periods. Since they existed.

All 20-30 years? Believe it or not, the history of investment spans more than the last 25 years. Also, there are some questions regarding the liquidity of ETFs during a major crash/selling session. It’s possible there could be a feedback loop of selling to deal with cashing out that results in price of the ETF going below net asset value.

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

#360

Post by farmerstan »

jallen_dot_dev wrote: post #344
farmerstan wrote: post #301

Earlier quoted context omitted.

You, and everyone that responded to you, have no idea what Juicero was. It wasn’t orange juice at all, or any type of fruit juice. It was green juice. The founder made millions selling his chain of green juice stores on the east coast so he short had a history of success. I have a friend that worked there so I even tried the product. I thought the idea was vastly overpriced, but it definitely had the chance of workin…

> It wasn’t orange juice at all, or any type of fruit juice. It was green juice. This is a distinction without a difference. It doesn't matter what the juice is called. It doesn't change the fact that it's idiotic to pay hundreds of dollars for a machine that just squeezes bags of fruits and vegetables, and needs an Internet connection to ensure you're locked in to only squeezing the company's pricy bags.

What it shows is people who criticize the company don’t actually know anything about it. If you’re going to criticize actually take the time to understand instead of throwing rocks thinking you’re so smart because you read a headline.
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