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How This Ends

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Re: How This Ends

#621

Post by rcpt »

PaulDavisThe1st wrote: post #487
lazide wrote: post #458

Earlier quoted context omitted.

Real estate is going to be gutted - increasing mortgage rates (already have been happening) will decimate qualified buyers. Decreasing prices will further decimate those willing to Hail Mary with cash offers hoping to get something after years of frustration.

But the effective, on-the-ground housing shortage is going to continue to keep demand for housing extremely high in almost all areas with reasonable economic options or amenity migration destinations.

That governs rent. But what we've seen with COVID is huge jumps in price to rent ratios.

Re: How This Ends

#622

Post by rcpt »

lazide wrote: post #510
PaulDavisThe1st wrote: post #487

Earlier quoted context omitted.

But the effective, on-the-ground housing shortage is going to continue to keep demand for housing extremely high in almost all areas with reasonable economic options or amenity migration destinations.

The only reason there is a housing shortage is because there is an excess of jobs and money in that place. Which is changing. Houses in sunnyvale went from 750k-1m and impossible to find one for sale to 350k (yes really!) and on the market for years around ‘08.

> an excess of jobs and money

And speculation.

Bay Area has the highest price to rent ratios in the US. Rent really hasn't changed that much since 2020 and if the betting stops it'd make sense to go back to 2020 prices (which is like a 50% "crash" in parts of the Bay)

Re: How This Ends

#623

Post by noduerme »

rcpt wrote: post #617
noduerme wrote: post #592

Earlier quoted context omitted.

I wonder to what degree generational culture plays a part. My father, for example (born pre-WWII), would never buy growth stocks. Not even when he was young. He bought only dividend yielding stocks, reinvested 100% of the dividends and never sold anything until his retirement. My generation (X) has a more balanced approach, with a mix of growth and value stocks dependent on risk tolerance, trending toward value stock…

For young people betting on the far future looks just as crazy as GME calls

Yeah, I get that. And that's natural. But if a huge population swell is accustomed to treating the market as a get-rich-quick casino, the market stops serving its purpose and I guess we're in for a really bad series of shocks.

Re: How This Ends

#624

Post by noduerme »

noduerme wrote: post #592
fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

I wonder to what degree generational culture plays a part. My father, for example (born pre-WWII), would never buy growth stocks. Not even when he was young. He bought only dividend yielding stocks, reinvested 100% of the dividends and never sold anything until his retirement. My generation (X) has a more balanced approach, with a mix of growth and value stocks dependent on risk tolerance, trending toward value stock…

>> but that's really not what investing your savings should be about.

I just had a follow-up thought to my own post (too late to edit).

Maybe part of this culture is that many of the most aggressive young growth stock investors are not investing their savings. That is, what's been inflating these bubbles is inherited wealth being directed away from responsible investments and towards speculation. Contrary to what I'm saying, I do know a few people (not just Millennials) who have blown uncomfortably large portions of their actual earned income / work savings on bad crypto investments... but I still feel like people are more careful and conservative when they're investing money they actually worked to earn.

Or they were. Maybe the whole society tips over towards hype and FOMO when it's all we see online everyday.

Re: How This Ends

#625

Post by axiosgunnar »

greedo wrote: post #546
lettergram wrote: post #484

Earlier quoted context omitted.

> do not, and anyone else not trying to be contrarian and edgy on the back's of a humanitarian catastrophe does not either. Russia's goal was a blitzkrieg surprise win, measured in hours, taking over the capital and the government, before the West could even muster up sanctions. Where does that assumption come from? No Russian source has ever said that. The only sources I’ve seen were the US propaganda arm. Putin sai…

To say your "facts" are in error is to say water is wet. Russian started the war with roughly 100 BTGs. These have roughly 1k troops when fully equipped (as you would expect before the start of hostilities). They've added another 10-15 BTGs to replace the 45 or so that have been attritted by Ukrainian forces. So no, they didn't expect to conquer Ukraine with 50K troops, but closer to twice that. RuAF also tried to de…

> Russia's military, outside of it's nukes is a Potemkin affair.

Let‘s hope that its nukes are a Potemkin affair as well.

Re: How This Ends

#626

Post by lljk_kennedy »

lettergram wrote: post #484
axiosgunnar wrote: post #471

Earlier quoted context omitted.

> I see Russia winning on all fronts tbh. I do not, and anyone else not trying to be contrarian and edgy on the back's of a humanitarian catastrophe does not either. Russia's goal was a blitzkrieg surprise win, measured in hours, taking over the capital and the government, before the West could even muster up sanctions. They have failed abysmally at that, and capturing a few towns in Eastern Ukraine (just a little bi…

> do not, and anyone else not trying to be contrarian and edgy on the back's of a humanitarian catastrophe does not either. Russia's goal was a blitzkrieg surprise win, measured in hours, taking over the capital and the government, before the West could even muster up sanctions. Where does that assumption come from? No Russian source has ever said that. The only sources I’ve seen were the US propaganda arm. Putin sai…

Here's your source on a "Russian Blitzkrieg" being the opinion of the Russian political classes, and an ex-Army Colonel trying to pour water on it - _before_ the war started.

About the author: Mikhail Mikhailovich Khodarenok - ex-head of the group of the 1st direction of the 1st directorate of the Main Operational Directorate of the General Staff of the RF Armed Forces, Colonel

https://nvo-ng-ru.translate.goog/realty/2022-02-03/3_1175_do...

Re: How This Ends

#627

Post by FearTheTrees »

baxtr wrote: post #430
vintagedave wrote: post #171

Earlier quoted context omitted.

So for non-finance-experts, what should we be doing with our money? Investing in what? Keeping in the bank? It sounds from your comment like there is _nothing_ that won't be devalued, even gold. Is real estate worthwhile? (Note: I am in the EU not US.)

I've invested through bull and bear markets in the last 15 years. I’ve always put most of my money into ETFs, mainly S&P500. It has served me well so far. Just be prepared to be down with your portfolio for some time.

Serious question: Instead of riding the ETFs down, what if I sell investments now and move to cash/gold? Cash would lose value at the rate of inflation, while ETFs can drop 30-40% more if the FED makes mistakes.

Re: How This Ends

#628

Post by jliptzin »

fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

If inflation continues hot don’t stock prices eventually have to go up though? If Apple raises the price of iPhones 50% because its input costs went up 50% and (assuming sales remain the same, I’m only talking inflation, not a depression), then they’re making $9/share instead of $6/share so unless people think Apple at a 15 PE is overvalued its share price would go up.

Re: How This Ends

#629

Post by unicornmama »

racked wrote: post #451
unicornmama wrote: post #438

Earlier quoted context omitted.

I would be very scared to hold Euros. Either CHF or USD, or a mix. It is paradoxically better to hold cash than to invest in equity, bonds or real estate.

This is interesting. Can you elaborate a bit: - What do you expect to happen with EUR? - Why do you think USD or CHF are safer to hold than say, gold?

This is a concise explanation, ignore the clickbait title. https://youtu.be/BbU7LkzV79g

Re: How This Ends

#630

Post by unicornmama »

riku_iki wrote: post #452
unicornmama wrote: post #445

Earlier quoted context omitted.

Those companies are not immune from cutting cash burn to protect their stock price.

They are all have very positive cash flow, so it is unlikely they will be cutting significant amount of fat.

They are not valued on a binary positive or negative cashfows. They are valued at NPV of future cashflows. You can justify a high burn rate with the expectation of earnings in the distant future. But as inflation/rfr goes up then then investors value money today more and more and money in the future less and less.
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