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

Post by [deleted] » Sun, May 08, 2022, 4:17 AM UTC

Tiktaalik wrote: post #35

kmonsen wrote: post #11

Earlier quoted context omitted.

I honestly think that’s not the main reason we have inflation now. Since every country in the world is seeing similar inflation I would think it’s supply side and not something any central bank can fight. I’ve always been Keynesian, but it faces the same problem as everything else, you need to be able to predict the future to do it well.

Every other country did what the Fed did for the same reason: We've experienced (and are still experiencing) a once a century global pandemic. The measures to limit pandemic deaths would have completely destroyed the economy had the governments and their associated banks not taken the measures they took to support people during this difficult time. It's not the Feds fault, it's the pandemic.

Post by vitus » Sun, May 08, 2022, 4:23 AM UTC

anonporridge wrote: post #50

vitus wrote: post #2

> Buying the dip isn’t some secret strategy. Time is the secret strategy. Ah yes, the good ol' "time in market beats timing the market". Of course, that assumes that markets trend upwards in the (very) long term. Which... if past performance is any indicator of future performance [0], the past 100 years provide a fairly compelling narrative. [0] Another mantra: it's not.

If the measuring stick you use is getting shorter every year by design (monetary expansion/inflation) then you can be quite certain that the market will trend upwards for as long as you use that unit of measure.

Post by Nevermark » Sun, May 08, 2022, 4:25 AM UTC

_uy6i wrote: post #72

tyre wrote: post #16

Earlier quoted context omitted.

> The COVID fiscal canon blew growth and inflation skyward. This is not true and has wrongly given credit to people who have said, since 2020, that COVID relief would cause inflation. Our current inflation is driven by supply chain issues (unrelated to COVID relief) and rising oil (unrelated to COVID relief.)

This may be the case for many goods (e.g. cars, furniture, dishwashers, beef) - but definitely not assets (e.g. homes, bonds, stocks, art)

Post by redisman » Sun, May 08, 2022, 4:27 AM UTC

john_moscow wrote: post #67

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".

There's a third strategy of "index minus bullshit stocks" where you would include both INTC and AMD stocks for risk hedging, but would leave out things with questionable sustainability like Uber and Netflix that otherwise made it into the index due to the speculative value.

Post by pdevr » Sun, May 08, 2022, 4:28 AM UTC

anonporridge wrote: post #49

alar44 wrote: post #48

Earlier quoted context omitted.

I'm sorry, when did investing in indexes not work? No idea what you're talking about.

Index investing has really only existed in common practice since the 1970s. You can simulate back further and do imaginary index investing, but we really only have 50 years of actual history with it. It's a very young experiment. One thing that a lot of people are worried about is if the surge of people and money getting blindly pumped into broad basket index funds as if it was a savings account (because those have n…