Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

What should you do with stock options during a recession?

every.to

Post reply on HN
Print view View original

41–50 of 243 posts

Re: What should you do with stock options during a recession?

#41

Post by notch656a »

atombender wrote: post #34
FinanceAnon wrote: post #22

Earlier quoted context omitted.

I would just hold it - I have sold most of my index fund holdings in the past 6-9 months and been just holding cash. I don't think stocks have reached the bottom yet, so holding cash at 0% return is still better than negative returns from stocks. Right now, it's about not taking losses. I also don't see the market and economy rebounding quickly after reaching bottom - they will stay flat for a while IMHO

As a counterpoint, I would quote the great John C Bogle: "Never, never get out of the market." [1] Knowing when the market has reached the bottom is not really possible. During the dot com crash in 2000-2001, investors sold all the way down to the bottom (and lots of them sold at the very bottom), and then they eventually sold all the way up to the peak, when instead they could have just held onto their shares. Rebal…

>"Never, never get out of the market."

Cash is a market though, just a different market. If you hold cash you're in a particular market, one that has earned significant returns measured against equities this year. (of course, depending on timespan you may want to pick _which_ market you think best)

It's been strange indeed. My highest yielding investment the past couple years was buying a new vehicle. Conventional wisdom says new vehicles are horrible investment, but in this market it's exceeded yields of every single asset in my pretty diverse basket.

Re: What should you do with stock options during a recession?

#42

Post by throwaway9980 »

anon291 wrote: post #23

I'm planning on exercising some of mine (in the post-resignation 90 day period) via EquityBee. I don't want to lower my own cash reserves now due to a looming recession, but do believe the company has upside. EquityBee (and a few other companies, like vested, all of whom I think are legitimate) gives me money to exercise the options in exchange for ~30% of the shares should the company go public, plus repayment of th…

EquityBee looks really interesting, but your startup has to have raised over $50M to participate. Does anyone recommend any alternatives for companies in the range of $25M-$50M raised and ~$200M valuation?

Re: What should you do with stock options during a recession?

#44

Post by pishpash »

neilfrndes wrote: post #10
johnchristopher wrote: post #2

I'd like to know what to do with ~10 000 euros, right now. Where should I put it so it doesn't lose its value and keep a bit with inflation ? edit for a bit of context: Western Europe, renting, unlikely to be able to buy/invest into a house/flat, looking at gold ingots, not the nerve for crypto.

I recommend reading 'The Intelligent Investor'. The book describes strategies that help you navigate all kinds of markets. https://en.m.wikipedia.org/wiki/The_Intelligent_Investor . As counterintuitive as it seems, the book actually recommends buying stocks in a bear market since they are priced reasonably. Warren Buffet's famous quote comes to mind: “Be fearful when others are greedy, and greedy when others are fear…

I don't know, people seem pretty greedy still. VIX barely at 30, PE10 near pre-pandemic highs, real yields negative out to 3-4 years, and markets are orderly. If you get weeks and weeks of 4% daily drops, real yields at 5%, and hedge funds being force liquidated like 2008, then you know real fear.

Look at how far behind the Fed has gotten: https://www.longtermtrends.net/real-interest-rate/

Re: What should you do with stock options during a recession?

#45

Post by User23 »

johnchristopher wrote: post #2

I'd like to know what to do with ~10 000 euros, right now. Where should I put it so it doesn't lose its value and keep a bit with inflation ? edit for a bit of context: Western Europe, renting, unlikely to be able to buy/invest into a house/flat, looking at gold ingots, not the nerve for crypto.

Is there some kind of inflation protected EUR denominated bond or note you can buy? If the maturity date is reasonable that might not be a bad place to park excess cash.

Re: What should you do with stock options during a recession?

#46

Post by s1artibartfast »

edgefield wrote: post #40
subsubzero wrote: post #36

I gave my Wife money to exercise her ISO's(startup before IPO) for her first 1.75 years of shares when the company valuation hadn't changed. Her company went public and the stock jumped and then crashed, I think the current price per share is lower than her exercise price so she is underwater and the money I gave her is worth less as shares vs. cash I originally gave her. Really a huge bummer as this job up-ended our…

This is the sunk cost fallacy. The best option might be to leave and find something else.

They are talking about the shares, which are already fully owned and liquid.

The question is to sell them and invest the cash somewhere better(??) or HODL.

Re: What should you do with stock options during a recession?

#47

Post by motohagiography »

johnchristopher wrote: post #2

I'd like to know what to do with ~10 000 euros, right now. Where should I put it so it doesn't lose its value and keep a bit with inflation ? edit for a bit of context: Western Europe, renting, unlikely to be able to buy/invest into a house/flat, looking at gold ingots, not the nerve for crypto.

It's a question of what you think is going to happen. Personally, I think there are a lot of other people who are looking for ways to get out of cash and into something that is portable and loses value at a slower rate than inflation as well.

It implies increasing demand for alternative assets like art and collectables, and maybe small land purchases. If there's something you know about or enjoy, it may be worth just getting into buying something, like antique motorcycles, painting and sculpture, photography, classical instruments of the non-piano variety, fancy watches, wine auctions, and other niche high end collectables. Even the top level hi-fi systems from niche makers (McIntosh, Luxman, Audio Research) with limited supply look like they could still be in demand in a decade, just like a good 1970s amp or speakers still costs more than an iPod.

If these sound extravagent, the alternative at that level of investment is to buy a small crypto mining rig. Personally I would rather just take the hi-fi system or the instruments. :)

Re: What should you do with stock options during a recession?

#48

Post by ericmay »

pishpash wrote: post #44
neilfrndes wrote: post #10

Earlier quoted context omitted.

I recommend reading 'The Intelligent Investor'. The book describes strategies that help you navigate all kinds of markets. https://en.m.wikipedia.org/wiki/The_Intelligent_Investor . As counterintuitive as it seems, the book actually recommends buying stocks in a bear market since they are priced reasonably. Warren Buffet's famous quote comes to mind: “Be fearful when others are greedy, and greedy when others are fear…

I don't know, people seem pretty greedy still. VIX barely at 30, PE10 near pre-pandemic highs, real yields negative out to 3-4 years, and markets are orderly. If you get weeks and weeks of 4% daily drops, real yields at 5%, and hedge funds being force liquidated like 2008, then you know real fear. Look at how far behind the Fed has gotten: https://www.longtermtrends.net/real-interest-rate/

(This is not financial advice)

Ignore the "be greedy"* part of the person you are replying to (although your hesitation is kind of proving their point a bit) but follow the advice of the Intelligent Investor.

When markets go up, everyone is happy to continue to invest. When they go down? People stop investing. That's precisely what you shouldn't be doing. Staying the course and continuing to invest regularly is key. When markets are sour that's when people get nervous and alter their behavior.

* Want to be greedy? Start buying Coinbase stock and Bitcoin. Notice how everyone is scared right now?

Re: What should you do with stock options during a recession?

#49

Post by throwaway12245 »

adamsmith143 wrote: post #21
JonChesterfield wrote: post #8

Earlier quoted context omitted.

Buy something you want for 20000 and watch the debt inflate away?

This always seems silly to me. You are making an assumption that your Income will inflate by the same amount. But I don't know anyone getting 8% raises each year in any industry.

https://tradingeconomics.com/united-states/wage-growth Wages in the United States increased 11.67 percent in April of 2022 over the same month in the previous year. source: U.S. Bureau of Economic Analysis

Re: What should you do with stock options during a recession?

#50

Post by sumedh »

notch656a wrote: post #41
atombender wrote: post #34

Earlier quoted context omitted.

As a counterpoint, I would quote the great John C Bogle: "Never, never get out of the market." [1] Knowing when the market has reached the bottom is not really possible. During the dot com crash in 2000-2001, investors sold all the way down to the bottom (and lots of them sold at the very bottom), and then they eventually sold all the way up to the peak, when instead they could have just held onto their shares. Rebal…

>"Never, never get out of the market." Cash is a market though, just a different market. If you hold cash you're in a particular market, one that has earned significant returns measured against equities this year. (of course, depending on timespan you may want to pick _which_ market you think best) It's been strange indeed. My highest yielding investment the past couple years was buying a new vehicle. Conventional wi…

> If you hold cash you're in a particular market, one that has earned significant returns measured against equities this year.

What about the last 100 years?

Post reply on HN