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

Stock markets are booming but the good times are unlikely to last

economist.com

Post reply on HN
Print view View original

51–60 of 71 posts

Re: Stock markets are booming but the good times are unlikely to last

#51

Post by skybrian »

andy_ppp wrote: post #12
djur wrote: post #8

Earlier quoted context omitted.

Which money printing are you referring to?

I think the US printed a couple of TRILLION dollars during COVID. The money hasn’t gone anywhere so if you’re American and don’t have the $80000 per person someone else has your cash. Edit: not sure why you’re downvoting! It was actually $3.3tn in 2020 alone which is wild.

> someone else has your cash

It was never yours. The Fed doesn't give money away, it buys financial assets. What did you sell them?

Also, the Fed has been selling assets lately, which does remove some money from the system.

Re: Stock markets are booming but the good times are unlikely to last

#52

Post by jacobsimon »

highwayman47 wrote: post #4

The performance of the stock market is more related to the money printing by the federal reserve than anything else. Modern economics seems to deny this, and thus will make articles like this.

This is exactly what the article is saying - low interest rates set by the fed and corporate tax rates in the last decade led to higher corporate profits, and higher multiples, which was also probably fueled by investors with more cash and corporate buybacks.

Re: Stock markets are booming but the good times are unlikely to last

#53

Post by senectus1 »

kobalsky wrote: post #38
ramesh31 wrote: post #15

Earlier quoted context omitted.

>Experts predict 'good times will not last', and yet with a few exceptions like 2008 or 2022, prices tend to go up anyway. There is little evidence to suggest market timing works. It took a long time for me to accept this. Go back and look at the S&P historically for any date you'd like, and it always looks like we're teetering on the edge of an abyss. That's just the nature of economic growth.

society is a never ending ponzi, as long as people keep having kids.

yeah... about that... https://www.macrotrends.net/countries/WLD/world/birth-rate#:....

Re: Stock markets are booming but the good times are unlikely to last

#54

Post by skybrian »

Barrin92 wrote: post #13

The stock market in America just seems to have the same function as the property market in China, it's the primary thing everyone dumps their wealth in. If one looks at stock market capitalization versus real economic output the ratio keeps creeping up. So either there's some miracle returns in the future or it's just more and more divorced from the fundamentals.

Based on a quick Google search, looks like US stock market cap is about $50 trillion [1] and real estate is $120 trillion. [2]

(There's going to be overlap since businesses own real estate.)

[1] https://siblisresearch.com/data/us-stock-market-value/ [2] https://www.statista.com/outlook/fmo/real-estate/united-stat...

Re: Stock markets are booming but the good times are unlikely to last

#55

Post by NhanH »

polishdude20 wrote: post #20
kelnos wrote: post #11

Earlier quoted context omitted.

"Investing", assuming you are regularly employed, shouldn't be a thing you only do at certain rare times. You should put a part of every paycheck into whatever investments match with your risk tolerance. They way you eliminate the risk that you put a big lump sum into the market right before a crash.

I haven't been regularly investing for a few years as I've been saving up for a downpayment. Is that a sound plan?

You should be investing in a low risk, high-liquidity market (treasury, money market) when saving up.

But anyway it is a reasonably sound plan for what you are doing.

Re: Stock markets are booming but the good times are unlikely to last

#56

Post by jes5199 »

I think the warnings in this article are reasonable if you don’t think there’s transformative tech around the corner that is going to lead to huge societal changes. And even if there is a big productivity boost from AI or anything else, the winners and losers will be scattered around in an unpredictable way, you could still lose a fortune on the index funds

Re: Stock markets are booming but the good times are unlikely to last

#57

Post by datavirtue »

kelnos wrote: post #11
wucaworld wrote: post #7

Earlier quoted context omitted.

Hey! Those were the last two times I invested in the market, saw my investment diminish and stopped paying attention. For what it's worth, I am putting money in again, so let's see.. lol. Edit. Oh .. I also invested just before the dot com crash. I looked at the historical charts and can't believe my timing.

"Investing", assuming you are regularly employed, shouldn't be a thing you only do at certain rare times. You should put a part of every paycheck into whatever investments match with your risk tolerance. They way you eliminate the risk that you put a big lump sum into the market right before a crash.

Very few people have the luxury/privilege of investing at their risk tolerance.

Re: Stock markets are booming but the good times are unlikely to last

#58

Post by nine_k »

kbos87 wrote: post #36

I'm heartened to see the comments here because they seem to support what I've slowly been realizing, which is that nobody knows what will happen next. There will always be a steady stream of people telling you both that the sky is falling and that we're on the upswing. As far as we can detect there's a near equal probability of either being true. Writers have their own biases and economic homeostasis is dependent on…

Since the situation cannot be described by a scalar, "the sky is falling" and "we're on the upswing" can be correct at the same time, just about different parts of the market.

Re: Stock markets are booming but the good times are unlikely to last

#59

Post by nine_k »

VirusNewbie wrote: post #31
skybrian wrote: post #10

Earlier quoted context omitted.

M1 and the Fed's balance sheet are down since 2022, though. What "money printing" do you mean?

that's an interesting time frame. It's still up quite a lot.

Say, 2022 is when the Russo-Ukrainian war began, with quite significant consequences for the EU and US economies at the very least.

Re: Stock markets are booming but the good times are unlikely to last

#60

Post by Barrin92 »

skybrian wrote: post #54
Barrin92 wrote: post #13

The stock market in America just seems to have the same function as the property market in China, it's the primary thing everyone dumps their wealth in. If one looks at stock market capitalization versus real economic output the ratio keeps creeping up. So either there's some miracle returns in the future or it's just more and more divorced from the fundamentals.

Based on a quick Google search, looks like US stock market cap is about $50 trillion [1] and real estate is $120 trillion. [2] (There's going to be overlap since businesses own real estate.) [1] https://siblisresearch.com/data/us-stock-market-value/ [2] https://www.statista.com/outlook/fmo/real-estate/united-stat...

Okay but what's the argument in relationship to my post? As the article notes China's property market is larger despite a stock market cap of 10tn, similar in Japan real estate value is about 5x larger than Japan's stock market cap.

That was the point, in the US stock market capitalization is unusually high compared both to other sectors and the economy at large.

Post reply on HN