What to Worry About in This Surreal Bull Market

Post by toyg » Tue, Nov 28, 2017, 1:36 PM UTC

chrisbro wrote: post #62

aedron wrote: post #12

A bubble in slow motion, someone called the present economic environment. I think it's an apt description. Extreme "quantitative easing" (I refuse to take fed speak seriously) has only taken effect very, very slowly. Why? Because all it really was was recapitalizing banks which had enormous gaping holes on their balance sheets after 2008. They have been able to fill the tanks now, getting money hot off the presses fo…

Minor correction: Sarbanes-Oxley was introduced in 2002 after the Enron/Worldcom crises, not after the 2007/2008 financial crises: https://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act

Post by headmelted » Tue, Nov 28, 2017, 1:39 PM UTC

dsacco wrote: post #65

headmelted wrote: post #61

Earlier quoted context omitted.

Please don't take offence, but you've misunderstood the mechanics of how wealth is accumulated. The wealthiest people in the world are wealthy by virtue of the gains made on the assets they already have. So, in a bull market, their assets grow while someone without assets is left behind. The inverse is true, too - they'll proportionally lose to the same degree in a crash - as while a poor person may have no investmen…

I agree with the thrust of your comment, but to nitpick: > Books have been written around timing markets and it's generally accepted that it cannot be done reliably. To get out before a crash then buy cheap would require you to predict three different moments accurately: when to get in, when to get out, and then when to buy on the "cheap". Timing even one reliably requires luck or clairvoyance. This doesn’t strike me…

Post by toyg » Tue, Nov 28, 2017, 1:42 PM UTC

dsacco wrote: post #65

headmelted wrote: post #61

Earlier quoted context omitted.

Please don't take offence, but you've misunderstood the mechanics of how wealth is accumulated. The wealthiest people in the world are wealthy by virtue of the gains made on the assets they already have. So, in a bull market, their assets grow while someone without assets is left behind. The inverse is true, too - they'll proportionally lose to the same degree in a crash - as while a poor person may have no investmen…

I agree with the thrust of your comment, but to nitpick: > Books have been written around timing markets and it's generally accepted that it cannot be done reliably. To get out before a crash then buy cheap would require you to predict three different moments accurately: when to get in, when to get out, and then when to buy on the "cheap". Timing even one reliably requires luck or clairvoyance. This doesn’t strike me…

Post by Boothroid » Tue, Nov 28, 2017, 1:44 PM UTC

TheAdamAndChe wrote: post #31

snappyTertle wrote: post #6

Earlier quoted context omitted.

I think the bubble is the US dollar. Currently our debts are being serviced by issuing more debt! Safe places IMO are deflationary assets (gold, and to a much more risky extent, bitcoin...I know this will start a flame war lol). Another option is foreign assets in countries that are not holding onto a lot of US debt. I'm not an oracle, so I can't predict timing, although I do think it will happen relatively soon in t…

I've always liked Warren Buffett's explanation on why investing in gold is pretty silly[1]. Basically, owning gold as an investment is purely speculation, because earning a return requires greater demand in the future. It doesn't have the potential to provide dividends or grow exponentially like ownership in a business does. Gold earns nothing for you over time. Instead of investing in gold, why not invest in a forei…

Post by mhb » Tue, Nov 28, 2017, 1:48 PM UTC

ronnypostsstuff wrote: post #32

What is the best thing to do with my savings? I am thinking about investing, and read up on it. One thing I don't understand is where to put money to minimize the impact of a recession. Government bonds? But then Graham says, I think, bonds prices also rise in a bull market, and fall afterwards.