[HN Gopher] Ask HN: How are you preparing for the incoming reces...
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Ask HN: How are you preparing for the incoming recession?
Hello, guys. I hear a-lot of negative sentiment regarding an
incoming recession. I hope it doesn't happen, but I don't want to
be a sitting duck. Just want to know how fellow hackers are
consuming this news. - What do you anticipate? - Do you have
plans incase you get laid off? - Savings? If so for how long? -
Are you sitting on an inflation hedge? - What business plans may
thrive in a recession?
Author : max_
Score : 26 points
Date : 2022-02-08 19:54 UTC (3 hours ago)
| ilaksh wrote:
| Recessions we know we can handle. In some ways we have been
| experiencing it within the last few years. People should
| acknowledge the possibility of worse - a depression and/or world
| war. The extreme currency problems that some countries have had
| actually can come to the United States if countries like Russia
| and China somehow gain some mindshare or advantage that causes a
| global shift in favor.
|
| And what would cause other countries to try to attack the status
| quo of the US global reserve currency? Severe economic recessions
| and/or strategic plans of their own countries. War could be the
| only choice the US has in order to defend it's control over the
| system (and therefore the currency value).
|
| Do I think these types of scenarios are necessarily likely or on
| a short time frame? No. But they can't be ruled out by anyone who
| has taken a history course. And it's those types of really severe
| circumstances where preparation can make the most difference.
| paxys wrote:
| "The stock market has correctly predicted nine of the past five
| recessions".
|
| A recession may be "incoming", or it may not. People have been
| sure of one every day since 2011. If you had listened then and
| liquidated all your investments/overly hedged your bets you would
| have missed out on the biggest bull market in history. The same
| could be true today.
|
| You should always have enough in savings to withstand 6-8 months
| of market turmoil and no income. To be conservative you can even
| increase that to 12 months. And keep your skills up to date so
| you have an advantage over the crowd in a bad job market. Beyond
| that, you don't really have to plan for any specific global
| economic disaster.
| AnEro wrote:
| Know your budget and what you can and can't cut, I'm not the
| money manager in the house investment wise, but I do the
| purchasing around the house. I really think people will
| underestimate how much stuff you don't think about adds up,
| especially food wise if you're trying to be healthy or athletic.
| What are cheap enough proteins may just jump out of budget very
| quickly when you're eating what avg people consider 3-4x the
| amount of protein you should eat.
| morelandjs wrote:
| 1. Plan to continue investing in index funds on a schedule 2.
| Watching myself for lifestyle creep. Would like enough reserves
| on hand that I'm not a cornered animal if I lose my job. 3.
| Building up separate savings (brokerage) for a house. Will pounce
| a little early if the housing bubble pops. 4. Applying some
| healthy skepticism toward "too good to be true" investment
| schemes 5. Unplugging from the click bait cycle to preserve my
| sanity 6. Staying heavily invested in tech stocks. They seem to
| just scale better over long time horizons, and I'm in it for the
| long haul.
| mr337 wrote:
| > 2. Watching myself for lifestyle creep.
|
| I feel this all the time and haven't been able to quite
| formulate it. I like to think of this as convenience things
| like subscriptions or fancy items that we can live without.
| pedalpete wrote:
| I agree with most of these things. The one caveat is #1. Though
| index funds have historically been the best investment, the
| past does not equal the future. With EVERYONE getting the
| advice to invest in index funds, that pushes up the price of
| the stocks in the index. That's where all the competition is.
| I'm more a fan of Peter Lynch's philosophy of investing where
| you have an advantage.
|
| I'm not saying don't do index funds at all, and niehter is
| morelandjs, but just be conscious of this dynamic.
|
| My personal approach is to invest directly in industries that I
| know well, like tech, and to find funds to invest in industries
| that I think are promising but I don't know enough about to
| make good investment decisions, like ARK Genomics.
|
| And I'd add to the list "get some reputable crypto (BTC, ETH,
| ETC)".
| tiahura wrote:
| _investing where you have an advantage._
|
| Do you spend 40 hours a week pouring over the 10-Q's of any
| particular company, and its competitors and customers and
| suppliers, or directly engaging with upper management and
| bankers?
|
| Then why would you think you have any advantage over the
| insiders that do?
| wara23arish wrote:
| I've read Peter Lynch's investment book to start out and
| found it as a great intro.
|
| I've followed it for two of my very modest investments and
| they have all worked out way better than I would have
| thought. I know there is a big chance that this is all just
| being lucky and that this is just a side effect of a bull
| market.
|
| But he means you have an advantage as an insider.
|
| For example, if you saw that you and all your tech friends
| companies' were switching to this payroll system that seems
| light years ahead of the current one. That can be an
| indication its worth looking into.
|
| Maybe as a radiologist, you know that a certain x-ray
| machine will be leaps and bounds better than what the
| current standard is.
|
| It is not simply based on insider information though.
| There's a bunch of chapters dedicated to what numbers to
| look through, identifying if a stock is cyclical.
| claudiulodro wrote:
| I thought we're just getting out of a 2020 "recession"? Asset
| prices may not continue growing at the rate they have been, but
| there seems to be more demand for things/services/everything/etc.
| than ever at the moment, and the boomers are retiring en masse.
|
| Either way, my strategy is (and will continue to be) to have a
| modest payed-off house in a low cost-of-living area. Worst case,
| I could afford my bills doing e.g. one of the food delivery
| services (which is how I payed the bills for part of the 2008
| recession).
| rexstjohn wrote:
| The problem with incoming recessions is if everyone expects them,
| then everyone knows they are coming, so they price it in, then
| they go "well, we priced that in, so now we can go back to
| business as usual."
|
| It's a reflexive system.
|
| Honestly- unless something has demonstrably "broken," such as
| Lehman or AIG collapsing, then nothing systemically has actually
| changed.
|
| There is so much nonsense and speculative Austrian economic
| discourse every time the market hits a speed bump that you can't
| actually rely on anything anyone says.
|
| Here is the real test for you: "have you seen any major
| institutions fail, implode or go under?"
|
| If not, we aren't in trouble yet. The stock market and economy
| have incredible ability to make adjustments, rebalance and repair
| themselves when provided information and time.
|
| Yes the federal reserve will raise interest rates.
|
| But that doesn't mean the entire economy will implode. It might
| just mean that resources are allocated from some sectors to
| others.
|
| This information is almost entirely priced in now. Unless more
| surprises occur (unexpected rate hikes or rate hikes happening
| too fast, or more rate hikes announced or institutions randomly
| imploding because debt burdens too high, or Russia invades
| Ukraine) we are probably ok.
|
| And then again; the federal reserve is not a passive actor. They
| might announce a rate increase, watch what happens, then change
| their minds if things correct too far.
|
| Suddenly your Peter Schiff scenario changes under your feet as
| the federal reserve unleashes the flood gates after allowing a
| calculated cooling off in speculation.
|
| So that's it: Has anything failed yet? Any imploding banks? Did
| Russia invade? If not, we aren't in crisis mode yet so just chill
| out and watch.
|
| If you are worried about a crisis; watch for institutional
| failure as your signal that real crisis has arrived. Everything
| else is just hot air.
| gmiller123456 wrote:
| What evidence do you (or anyone) have to support that there is an
| incoming recession?
| AnEro wrote:
| I think it's fair regardless to try to prepare or ask how one
| would prepare for it, economic down turns happen it's a case of
| when not if. (Well, to be fair I'm extremely curious
| regardless.)
| livinglist wrote:
| learn to increase your job security. it's okay to learn all kind
| of stuff when you just graduated from college, but years later
| you should start focusing on few things and be really good at
| them. full stack engineer? what would make you stand out since
| there are so many boot camps for full stack engineer right now?
| software engineers specializing in fields that require specific
| knowledge which can only be obtained through serious education or
| years of experience, for example, those who works for
| semiconductor industry.
| ostenning wrote:
| Upskilling is always a good thing to do, but don't always
| expect a job out of it. The reality is most developer jobs are
| pretty bog standard webdeveloper roles. Webdev is in serious
| demand because thats where most companies need a developer.
|
| If you want an embedded developer job for example, arguably its
| more complex and closer to silicon, but there are significantly
| less jobs and from what I've seen webdev pays better anyway
| ohiovr wrote:
| If it is true that supply lines are collapsing, then obtaining
| necessities may come closer to home. My town of Marion Ohio, with
| a fairly stable population of about 35k people, used to be more
| more industrialized. There was a factory to make pianos, steam
| engine powered tractor makers, small metal refiners, at one time
| there was a car factory, all at the turn of the 20th century. I'm
| not optimistic that all that will come back, but for things like
| foods, especially fermented food and drink will be in demand out
| stripping supply for a while. Even packaging, may be done more
| and more by cottage industries.
| opportune wrote:
| Maybe you mean stock market correction, as a result of tightening
| of monetary policy? There is a difference between that and a true
| recession (which is a sustained contraction in GDP or real GDP).
|
| The Fed is very conservative lately. Monetary tightening is not
| likely to be drastic, Volcker era stuff unless things
| considerably worsen. Keep in mind tightening means _reducing_
| open market operations, not even stopping them or selling off the
| assets on the Fed balance sheet. We are still a long way from
| objectively tight policy, we are just not going to be as
| ridiculously loose as we were.
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(page generated 2022-02-08 23:02 UTC)