[HN Gopher] Stanley Druckenmiller warns the stock market will be...
___________________________________________________________________
Stanley Druckenmiller warns the stock market will be 'flat' for an
entire decade
Author : RadixDLT
Score : 111 points
Date : 2022-09-16 12:15 UTC (10 hours ago)
(HTM) web link (fortune.com)
(TXT) w3m dump (fortune.com)
| kubb wrote:
| that would actually be great, the volatility and speculation only
| helps a narrow group of dedicated traders. as long as stock
| market saves you from inflation, you should be happy with your
| investment
| fny wrote:
| You do realize that the stock market will not save you from
| inflation if it remains flat for a decade?
| davidkuennen wrote:
| But it kind of does, since you don't own cash but a portion
| of a company. As long as that company does well for the next
| 10 years and doesn't go to shit the "value" stays the same.
| 10 shares of Company X are still worth 10 shares of Company X
| in the future in that case. But the monetary value of those
| shares will most likely change based on inflation.
| [deleted]
| Victerius wrote:
| People need to stop trying to find the best portfolio to keep
| up with inflation. It's futile. Just be happy if your
| portfolio appreciates 3% in a year, like our forefathers
| were.
| seibelj wrote:
| Property is great because the government subsidizes fixed
| rate 30 year mortgages - you beat inflation on the backs of
| tax payers. I own a lot of property!
| jrochkind1 wrote:
| Well, that was my question, if "kind of flat" means keeping up
| with inflation at least, or not.
|
| Although my understanding of the standard model of how
| privatized "saving for retirement" via investment funds works,
| is that you better have returns at more than inflation,
| especially in the early part of your career, if you want to be
| able to retire.
| nprateem wrote:
| I don't know if it'll last a decade or only be flat, but my local
| city has lost a lot of upper end clothes stores and even a burger
| king. The high street has well and truly died and if even BK
| can't survive that's a bad sign
| rq1 wrote:
| A broken clock is right twice a day.
| aaroninsf wrote:
| No one knows what the hell is going to happen, the only certainty
| is that compared to the long slowly-eroded geopolitical and
| economic stability of the late 20th century for the capitalist
| world, black swan events are much more likely and their impact
| much greater.
|
| The next few years may see Russia collapse. Or Russia use nuclear
| weapons to prevent ceding Crimea. We may see accelerated
| catastrophic climate change and knock-on effects like mass
| migration or as the Thai floods only a few years demonstrated,
| that knock out of critical infrastructure for our globalized
| economy is only one bad storm away. We may see low-level domestic
| terror campaigns in the USA dressed up as "civil war" or, we may
| see a de facto internal balkanization with erection of internal
| regulatory barriers to interstate commerce and logistics. We may
| see China's economy collapse with calls for historically-
| enshrined dynastic change resulting in internal chaos. We may see
| next-wave pandemics.
|
| Or maybe none of these things and the ship rights and we sail
| quickly forward into renewed economic prosperity.
|
| No one knows, least of all Stanley.
| rurban wrote:
| I'll still wait a few months to buy, but the green energy changes
| will improve everything. No more oil/gas dependencies!
| peteradio wrote:
| Is this sarcasm? Few months before green energy turns the ship
| around? Oil/gas is the backbone of most economy, dare say we
| will remain dependent.
| epistasis wrote:
| I think the poster is saying he expects the stock market to
| fall a few more months before turning around. Not that green
| energy will complete its transition in a few months.
|
| If you think oil/gas will demand the backbone, you ask
| yourself why none of the oil and gas majors are drastically
| expanding their production capacity during this time of high
| prices. Oil and gas, and their investors, are planning for
| their phase out, and nobody wants to be holding on to a new
| asset that has a lifetime of 10-20 years but won't have value
| after five.
|
| Oil and gas companies and investors know that fossil fuels
| are on the way out, it surprised me that the general public
| doesn't know this.
| peteradio wrote:
| > why none of the oil and gas majors are drastically
| expanding their production capacity during this time of
| high prices
|
| Because its a short-lived blip? Didn't we just have record
| lows less than 2-years ago?
| epistasis wrote:
| When there's an influx of cash like now, it's usually an
| ideal time to invest that money in new production because
| you have the cash in hand.
|
| General consensus is that new development should be small
| and only in a few types of projects, due to the
| transition under way. For example see this BCG report
| (PDF):
|
| https://web-
| assets.bcg.com/5e/73/dcd6e1544ba2a964e6c082d684e...
| epistasis wrote:
| I think more important than removing dependencies on oil/gas is
| that energy will be much cheaper, reducing the cost of
| everything.
|
| One other aspect of the IRA is that it heavily incentivizes
| building the new manufacturing capacity in the US. If US
| manufacturing is not competitive with other parts of the world,
| this could be less efficient than a world where the best
| manufacturers do more of it. So it has the potential to lower
| growth rates, but personally I think the tech advances for cost
| reduction of solar/wind/storage will likely be so massive as to
| overwhelm any potential US-based inefficiencies.
|
| In order to correct it, we could tie some of these benefits
| back to the manufacturers being able to compete on the global
| market; I.e. if they can't export X% of their product
| successfully in a competitive market, then the subsidies taper
| out. But we will see.
| fny wrote:
| For those who don't know, Druckenmiller is also very well known
| for changing his mind the minute facts change which is one of the
| hallmarks of good trading.
| deehouie wrote:
| This is the best comment in all. HN folks don't understand the
| purpose of this article. You think Druckenmiller is so bearish?
| for the next 30 yrs? Not a chance. He must have a huge short
| position on the S&P500, and he likes you to sell your stocks so
| he could cover at a lower level.
| fny wrote:
| Nah. Druck isn't one of those types. Bill Ackman is.
|
| Druck is just known to change his opinion when the facts
| change or he comes to a new conclusion. There's some anecdote
| about him completely flipping on a position when going in and
| out on an elevator ride that I can't quite remember.
|
| By the way, _sideways_ means that the stock market is going
| nowhere long or short. IMO, currencies and commodities are a
| far better place to speculate.
| deehouie wrote:
| While you may know the guy better, notice this Druck
| comment comes at a time when the long term buy-and-hold
| thinking is at its weakest point. A slightly respectable
| guru saying this sort of things is enough to make some
| people sell.
| snarf21 wrote:
| Very true. Plus this is nonsense. Interest rates are still far
| too low. There is wayyyyy too much money floating around in the
| system and global growth has slowed. That money will be chasing
| returns wherever they can find them and that has been the
| market and now real estate. Both of these will be net up over
| the next 10 years. It will be choppy for a few years as
| inflation is battled and interest rates rise a little bit more.
| peteradio wrote:
| Inflation adjusted won't that look rather flat or negative?
| Where are these real returns going to be coming from? Hot
| stocks haven't been paying appropriate dividends for the last
| two decades.
| foobarian wrote:
| I wonder how much the end Moore's law is a part of this
| current slowdown. It would make sense to me that its impact
| would lag a while, and would eventually catch up.
| mostly_harmless wrote:
| I don't know if it's moores law. except for servers, CPUs
| are mostly running near idle.
|
| My intuition would say tech saturation would make more of
| a difference. That is, worldwide pretty much everyone
| have now has adopted a computer and all businesses have
| automated the low hanging fruit.
| foobarian wrote:
| You put in words what I was thinking. Thank you for your
| comment :-)
| newaccount2021 wrote:
| mikeodds wrote:
| Prime time to raise money to build a society based off Logan's
| Run to deal with everyone that won't be able to afford to retire
| in that scenario
| giantg2 wrote:
| Reviews at work already feel like the carousel. Might as well
| extend that to other parts of society.
| Kye wrote:
| Trend pieces are worried about the new wave of Quiet Running.
| giantg2 wrote:
| TL;DR - nobody actually knows what the stock market is going to
| do, but everyone has a theory.
| iforgetti wrote:
| For those of us still in the first half of our working careers,
| this would be a welcome development.
| jrochkind1 wrote:
| How do you figure?
|
| I was thinking the opposite: that the model of saving for
| retirement via investment accounts requires good returns in the
| early part of your career, so the smaller amounts of money you
| can afford to put away for your relatively smaller early career
| salary can compound over your career length to be enough for
| retirement.
| francisofascii wrote:
| Assume for a moment that stocks are currently overvalued from
| a historical perspective. So it is better if they stay flat
| for a while and get back to normal valuations so when you buy
| them each month, they are not overvalued. If they were to go
| up in the next few years, they would become even more
| overvalued and you would be buying them at even more
| overvalued prices.
| markvdb wrote:
| Let me guess OP's reasoning.
|
| Most of the HN audience is privileged class by courtesy of
| being tech savvy. Unlike many others, most of us can keep
| investing even in less fortunate times when others cannot.
| Exactly those investments might yield extra high long term
| returns.
| iforgetti wrote:
| What others wrote was pretty much my reasoning but a bit
| further, over the very long run (30+ years) markets will
| revert to mean performance. If you have strong gains in the
| first half of your career then when you are in your peak
| earning years, investments will be more expensive at time of
| purchase. As a result when you are investing the most,
| returns on that principle will be lower.
| bart_spoon wrote:
| Isn't this just the gambler's fallacy? Yes, markets over a
| given period of time will likely conform to a particular
| distribution of performance, with some below-average
| periods and above-average periods that average out. But
| that does not mean that if there is an extended time period
| of terrible performance now, X years from there is likely
| to be a very strong rebound to compensate.
| tppiotrowski wrote:
| Personally, I wish it was as rewarding building or creating
| something as it is to invest in the stock market over the past
| decade. If you have capital it makes more sense to put it into
| stocks than opening a coffee shop or computer repair shop, etc.
| If the stock market stops paying out maybe we'll go back to
| trying to create value instead of profiting from value created by
| others.
| returnInfinity wrote:
| stock market is a future indicator of economic activity, so if
| its down, it also an indicator that less coffee shops will be
| opened because of lack of capital
| bidirectional wrote:
| If you built or created something that other people like (i.e.
| will pay for), you could probably get a way better 10 year ROI
| than you would in the market.
| ModernMech wrote:
| Depends on what you mean by "rewarding". I feel that building
| and creating is far more rewarding then clicking a button and
| watching a number go up. I hope others feel the same, because
| when everyone is clicking buttons and watching numbers, that's
| not something society can sustain.
| altdataseller wrote:
| It's getting more rewarding to put into Treasury Bills, when
| it's paying 4% in interest as of today.
| caeril wrote:
| That's a really good yield, so you're only losing 4.3%
| annually on a real basis.
| [deleted]
| jrm4 wrote:
| People say this like it's a bad thing.
|
| Look, at a fundamental level, the stock market is a tool for
| letting people put money into risky ventures without them
| actually experiencing consequences for that risk.
|
| Given the extent to which the nature of information has changed,
| I'm comfortable no longer letting this be a driver of economic
| growth. You want to put money in a thing in the hopes of getting
| more money, fine. But do your homework -- if they screw up, yes,
| YOU have to pay.
| hcmacro wrote:
| OTOH probably gonna be harder for startups and VCs to "pull one
| over" public investors and dumb management teams.
| 2OEH8eoCRo0 wrote:
| "There's a high probability in my mind that the market, at best,
| is going to be kind of flat for 10 years, sort of like this '66
| to '82 time period"
|
| From another article on '66-'82:
|
| > The Dow went sideways, but the S&P actually earned a
| respectable 6.8% return in that time.
|
| 6.8% is hardly apocalyptic. The S&P 500 usually averages 10% over
| long timescales.
|
| His former hedge fund also delivered an annual average rate of
| return of 30% from 1986 to 2010. What an absolute unit.
| bitshiftfaced wrote:
| I don't know about apocalyptic, but US Treasury bonds either
| exceeded that return, or trailed not far behind for much of
| that period. If you look at the S&P at a reward/risk
| perspective, it wasn't very attractive at that period of time.
| kritiko wrote:
| 6.8% with 6.8% inflation, according to that article.
|
| Edit: just got to the conclusion of this article, from 2014:
| "Many smart people in the industry are predicting lower
| investment returns over the next decade or so."
|
| Funny.
| reedf1 wrote:
| "The S&P 500 usually averages 10% over long timescales."
|
| This is a pretty meaningless statement.
|
| 6.8% over 10-20 years is certainly a nightmare scenario for
| most investors and is probably a significant loss against the
| risk free rate over the same period.
| concinds wrote:
| 10% per year, not 10%.
|
| 6% in 16 years is utterly pathetic.
| jxf wrote:
| > "There's a high probability in my mind that the market, at
| best, is going to be kind of flat for 10 years, sort of like this
| '66 to '82 time period," he said in an interview with Alex Karp,
| CEO of software and A.I. firm Palantir.
|
| Adjusting for inflation, the stock market was not "flat" during
| this period [0]. The DJIA, for example, closed at an effective
| price of 9,160.41 in January 1966 and closed at an effective
| price of 3,176.25 in December 1982. That's a 65% drop, which is a
| pretty big stretch to call "flat".
|
| [0]: https://www.macrotrends.net/1319/dow-jones-100-year-
| historic...
| jibe wrote:
| You are correct, but to clarify, you are saying the value
| declined when adjusted for inflation. The DJIA average sat
| around 900 the about a decade, with the real value getting
| eaten away by the high inflation of the time.
| jxf wrote:
| > You are correct, but to clarify, you are saying the value
| declined when adjusted for inflation.
|
| That's what I meant by "adjusting for inflation" and "65%
| decline". Apologies if that was worded confusingly.
| tootie wrote:
| A lot of the adjectives that traders use are different from how
| casuals would interpret things. They are looking for massive
| profit opportunities and declare hell on earth when they aren't
| there because it is for them. People who are just putting 401K
| money into index funds just need their money to slightly
| outpace inflation which it will almost always do in a long
| enough time horizon. We saw an outsize bull market and are now
| giving up a lot of those gains, but if you just buy and hold,
| you're nearly guaranteed to come out ahead even if you don't
| really have much chance of making a killing.
| svachalek wrote:
| "Nearly guaranteed" may be a stretch. There are decades in US
| history where you wouldn't really come out ahead (although
| I'm not sure any alternatives to stock would have done
| better) but internationally, there are many clear examples
| where the stock market hasn't been a good investment on a
| generational basis, like Japan now. The question is how much
| do you believe in American exceptionalism, are US markets
| really immune to this kind of failure forever, or have they
| just been on a really good run?
| tootie wrote:
| There's an awesome website posted to HN a while back that
| calculates total real returns (accounting for dividends and
| inflation). Here's the chart for the Vanguard S&P500 index
| fund:
|
| https://totalrealreturns.com/s/VFINX
| mvc wrote:
| Presumably dividends would balance it out though.
| O__________O wrote:
| Dividends would balance out a 65% drop during the same
| period, how so?
| giantg2 wrote:
| I think we'd have to look at the data, but it's possible
| given that drop happened over an almost 20 year period.
| Dividends around 2-4% annual over that time could make up
| for it depending on specifics.
| teraflop wrote:
| A 65% drop in price over 17 years is "only" about 6% per
| year. The S&P500 annual dividend yield during 1966-1982 was
| not much less than 6%, especially during the latter half of
| that period.
|
| If you look at an inflation-adjusted total return chart (as
| opposed to just price), the actual drop in investment value
| was much smaller. I think "flat" isn't a terrible way to
| describe it.
|
| https://www.multpl.com/s-p-500-dividend-yield
|
| http://www.simplestockinvesting.com/SP500-historical-real-
| to...
| jibe wrote:
| Total return (dividends reinvested, inflation adjusted)
| is -13.4% for 1965-1983.
| treis wrote:
| By being more than a 65% drop
| rufus_foreman wrote:
| With dividends reinvested you get -25.096%,
| https://dqydj.com/dow-jones-return-calculator/.
|
| S&P 500 is -3.745%.
| onlyrealcuzzo wrote:
| So one of the worst long-term periods in history - the S&P
| was still ~50% better than cash.
|
| What else is a passive investor gonna do?
| fny wrote:
| Sometimes you can't beat inflation. Wealth equality is
| inherently inflationary. If people in developing nations
| start demanding the same standard of living, prices are
| screwed, costs go up, and certain cost changes cannot be
| hedged.
|
| For example, how exactly would you plan on protecting
| yourself against wage increases? It's not like there's a
| futures market for wages.
| jsmith45 wrote:
| If people could agree on some source of unbiased data
| about average wages that updates frequently for a job
| type, then there certainly could be (cash-settlement
| only) futures based on that value.
|
| What seems relatively unlikely is that you will find
| people willing to offer physical settlement futures!
|
| The market would probably also be somewhat shallow, being
| more speculators than anything else. Basically only
| groups acting more like insurance companies would be
| willing to add much to the depth of the market, and
| obviously they would sell such futures at such a steep
| premium that is unlikely to be a very useful hedge.
| datavirtue wrote:
| Grow some balls and start a business?
| onlyrealcuzzo wrote:
| What if you already have a business with enormous profits
| and don't want to spend them all, but invest some?
| rufus_foreman wrote:
| 10-year treasuries, coupon payments reinvested, would
| have returned 18.156% adjusted for inflation over the
| same period, https://dqydj.com/treasury-return-
| calculator/.
|
| They returned over 36% in 1982 alone!
| [deleted]
| 2OEH8eoCRo0 wrote:
| What about S&P 500? The Dow Jones Industrial Average indexes a
| mere 30 companies.
| jibe wrote:
| S&P was about the same, large decline in real dollars over
| that time.
|
| https://www.macrotrends.net/2324/sp-500-historical-chart-
| dat...
| cypress66 wrote:
| Not just that, but weighed by their nominal price which is
| insane.
| bilsbie wrote:
| I wish we'd stop talking about the Dow. It isn't useful.
| jdkuepper wrote:
| Yes, but also, stock correlations are so high that it's not
| as big of a difference as you might think.[1]
|
| 1: https://www.macroaxis.com/invest/pair-
| correlation/DIA/%5EGSP...
| pfortuny wrote:
| And then suddenly someone comes up with, say, a working fusion
| reactor.
| mandeepj wrote:
| Don't listen to these seasonal frogs. There's no such thing as
| 'flat' in economy.
| bitshiftfaced wrote:
| Tell that to 1991 to 2010 Japan.
| pydry wrote:
| I wondered if it wasnt a reference to Irving Fisher's
| "permanently high plateau" remark.
| anm89 wrote:
| The amount of dumb takes in this thread is staggering. The level
| of dialogue here is 4chan level.
| 8jef wrote:
| _he has a history of a _bearish bias_ that he has had to work
| around his whole career. _I like darkness_ he said._
|
| Well, that's the only way to win long term at playing that game.
| Buy very very low and sit on it. It helps if you already have
| money. The bear feeds on the bull. Never be the bull.
| apples_oranges wrote:
| I, a random anon from the Internet, think SP500 is heading for
| 2400 or even lower (1600ish?), which is great news, as millenials
| will get a chance to buy stocks at a low price.
| Workaccount2 wrote:
| You probably don't realize it, most don't, but your statement
| is contradictory.
|
| It's the same line with the housing market doomers "Prices will
| crash and I will be able to buy a nice home".
|
| If something is crashing, it means no one can or will buy it.
| If people can buy something or want to buy it, it will no
| crash.
| chmod775 wrote:
| > You probably don't realize it, most don't, but your
| statement is contradictory.
|
| It's not.
|
| > If something is crashing, it means no one can or will buy
| it. [..] If people can buy something or want to buy it, it
| will no crash.
|
| You're only looking at demand as if that's everything that
| determines price. There's also the supply side to consider,
| as well as the fact that markets aren't a formless thing with
| no fixed location existing in a vacuum.
|
| Price crashes can also happen because of competition
| destroying high margins or production simply becoming way
| cheaper. Price crashes don't have to be related to demand: it
| can simply be a matter of companies undercutting each other.
|
| A third way for price crashes to happen is investors buying
| up a commodity, increasing the price. This will likely cause
| production to ramp up to compensate, slowly driving the price
| back down. Once investors see the price beginning to drop,
| they may sell in a panic. You're left with a market that is
| flooded by investors trying divest themselves amidst an
| overproduction, causing a price crash. The consumer never
| went away or was unwilling to buy though! Averaged over the
| entire timespan, demand never changed.
| AnimalMuppet wrote:
| If that happens, will millenials have any money with which to
| buy stocks?
| recursivedoubts wrote:
| looking at the pullbacks in 2000 and 2008, there is a non-
| trivial chance that the S&P will bottom sub-1000
| chasd00 wrote:
| Do you remember the financial crisis? In 2008 Paulson was
| literally on his knees in front of Pelosi begging for
| congress to do something. I doubt we're headed there again.
| babyshake wrote:
| Did the S&P drop by 80% or more in those recessions?
| apples_oranges wrote:
| yeah who knows, in the long run it will go way up of course,
| as the USA and other industrial nations will grow and grow..
| recursivedoubts wrote:
| that's not clear either, w/population growth set to reverse
| in the next 20-30 years
|
| consider the Nikkei...
|
| no crystal ball
| chiffre01 wrote:
| Looks like this guy's been making these kind of predictions for
| at least the last 10 years:
|
| https://www.cnbc.com/2016/05/04/druckenmiller-get-out-of-the...
|
| https://www.youtube.com/watch?v=4W58zLwdDzM
|
| https://www.cnbc.com/2015/11/03/stanley-druckenmiller-heres-...
|
| https://economictimes.indiatimes.com/news/international/busi...
| melling wrote:
| This guy? One of the best traders in history.
|
| https://priceonomics.com/the-trade-of-the-century-when-georg...
|
| His streak was something like 25% or 30% over 30 years?
|
| The tide is definitely going out. The Fed created a huge bubble
| and everyone knew it.
|
| Fed Balance sheet at $9 trillion...
| danielmarkbruce wrote:
| _was_.
|
| He has been making a lot of similar predictions for a while.
| Proven wrote:
| anm89 wrote:
| Yeah some clowns named Ray and Warren also keeps crying wolf
| about how the economy has issues too. These guys have no idea
| what they are talking about! I don't think they even trade.
| nprateem wrote:
| Buffett has also been predicting the mother of all crashes
| since 2016. Lesson: never listen to experts unless you
| discover one with a time machine.
|
| Like they say, more wealth has been lost trying to time the
| market than in crashes.
| towaway15463 wrote:
| The market can stay irrational longer than you can stay
| solvent.
|
| We're in a massive bubble but only a fool would try to
| predict exactly when it will pop.
| danielmarkbruce wrote:
| Source? I haven't seen Buffett say anything of the sort
| and am pretty certain he hasnt.
| anm89 wrote:
| Right. What an idiot. Guy has no idea what he's talking
| about. As I said, he's probably never even made any money
| trading.
|
| Good thing I've got the bright denizens of HN to set me
| straight.
| hedora wrote:
| Are you talking about this, where he hedged against a
| market collapse, and then his portfolio only dropped 66%
| of the drop at the beginning of 2016:
|
| https://www.fool.com/investing/general/2016/01/26/how-
| warren...
|
| I'd read the strategy there more as "don't be greedy and
| invest in companies with lots of growth and weak
| fundamentals". That applies to bull markets too.
| deltree7 wrote:
| What? Buffett never predicts crashes.
|
| His Mantra is keep identifying great businesses and keep
| buying it
| greenhatman wrote:
| He's going to be right eventually. Now seems like a likely time
| for him to be right.
| dkrich wrote:
| Saying the market was "flat" between 66 and 82 is a ridiculous
| oversimplification.
|
| There was a pretty strong bull market leading into 1973 which
| then began the worst bear market since the great depression,
| lasting until November of 1974.
|
| Then the market bounced and a strong bull market ensued. Net
| inflation and price over a long period one could argue the market
| was flat or down, sure, but on a year-to-year basis to argue
| there was no money to be made or lost holding stocks during this
| period is just wrong.
|
| If you were clever enough to get out of the market early in the
| 73-74 bear market and then get in relatively early after the
| November of 74 rebound, you'd have certainly had good returns. If
| you think that's just hindsight and nobody could've done that,
| read Marty Zweig's Winning on Wall Street where he has a section
| entirely devoted to that period and how he did avoid most of the
| drawdown.
| iLoveOncall wrote:
| It's okay because iLoveOncall says it won't, and this guy knows
| as much as Stanley Dundermifflin here.
| throwoutway wrote:
| At this point, I'm expecting both stagflation and a flat market
| for years to come. Odd that mortgage rate is above 6%, inflation
| is high, layoffs are happening, and yet the White House is
| pretending it's not a recession and won't say the word.
| fullshark wrote:
| They will admit it on November 9th
| 2OEH8eoCRo0 wrote:
| Employment remains high on average.
| jhickok wrote:
| I don't doubt that high interest rates will cause unemployment
| to rise, but saying "layoffs are happening" is a little
| disingenuous. We are still in the midst of one of the strongest
| labor markets in US history.
| datavirtue wrote:
| Fact: economy is growing
| treis wrote:
| Inflation isn't high any more. July was 0% and August was 0.1%.
| The headline number looks at a 12 month window. Until the very
| high inflation months earlier this year drop out of that window
| the headline number will be high. But it does not look like
| prices are increasing much anymore.
|
| All of the long term trends still point to low inflation like
| they did before Covid. Slow population growth, technology, and
| boomers aging out are strong forces keeping inflation in check.
| IMHO we are going to go back to worrying about deflation in the
| next 12 months or so.
| copenja wrote:
| The reason people find the 'zero inflation' headlines
| misleading are mainly for three reasons:
|
| 1) Aggregate month-to-month inflation metrics were flat/low
| due to gas prices falling, but many important categories were
| still quickly inflating. Notably rent, but also food.
|
| 2) The reason people normally reference 12 month inflation
| windows is because many things, like energy prices, are very
| volatile month to month. It is going to take time to really
| see the trends.
|
| 3) For things that skyrocketed like food, people are hoping
| to actually see the prices come back _down_.
|
| So, yeah, you are correct on your numbers, clearly. But as an
| non-expert, I'm not really sure the current trends are
| positive. I think they are still pretty troubling.
| prottog wrote:
| > Inflation isn't high any more.
|
| The CPI was 255.7 in 2019 and estimated to be 294.4 for 2022.
| That's a 15% increase in three years in an index that's
| acknowledged to somewhat under-report inflation. CPI could
| flatline (zero MoM) for the next two years and we would still
| be at 3% annual inflation over five years, which is above the
| Fed's target, in addition to all the asset inflation we've
| had that the CPI doesn't really track. Absolutely nobody who
| pays real bills will feel like inflation has subsided.
|
| > IMHO we are going to go back to worrying about deflation in
| the next 12 months or so.
|
| There's a lot of money to be made in the STIRS markets if
| your prediction comes true.
| treis wrote:
| >That's a 15% increase in three years
|
| Which means it's high over the last three years. It doesn't
| mean it's high today.
| prottog wrote:
| You're right, but it's going to take either a while or
| actively lower prices before people will stop feeling
| like everything is more expensive than it should be.
| Psychology matters for the effects of inflation on the
| macro economy.
|
| I've definitely altered my purchasing behavior because
| things "feel" too expensive, and a few months of 0% MoM
| inflation isn't going to change that. Either in two years
| I'm going to finally get used to a cart of groceries
| costing $250, or prices come down sooner.
| foobarian wrote:
| Don't forget the impact of COVID measures, which had a
| huge once-in-a-lifetime effect that is now going away.
| SantalBlush wrote:
| "Layoffs are happening" is not a metric, it's a truism. Layoffs
| are always happening somewhere, even in a growing economy. How
| prevalent are layoffs in the overall economy? You didn't even
| bother to check.
|
| Current mortgage rates have little to do with recession, if at
| all.
|
| Inflation is a problem, and it could absolutely lead to
| recession in the near future, but it hasn't yet. This is why
| the White House is "pretending" we're not in a recession.
| Workaccount2 wrote:
| The top 40% are unbelievably flush with cash and the job market
| is strong as ever (bloated tech companies don't count, their
| value was solely promises anyway).
|
| The fed is fighting to undo the QE it over did during the
| pandemic
| coldcode wrote:
| I think it's unwinding the QE it did since 2008.
| boole1854 wrote:
| They are nowhere near unwinding the QE since either the
| pandemic or 2008:
|
| https://fred.stlouisfed.org/series/WSHOSHO
|
| Why would they even try to undo 14 years of asset
| purchases? Their goal is only to reduce the growth in
| nominal spending in the economy so that it grows at around
| 4% annually (yielding an inflation rate of 2%). The goal is
| not to return nominal spending back to where it was in
| 2008, which would involve nearly a 50% cut from current
| levels.
| ParksNet wrote:
| We need to drastically increase pension ages and even abandon
| retirement as a mainstream concept. Working part-time in 60s and
| 70s should be commonplace.
| efficax wrote:
| why even let people quit? perhaps labor should be mandatory on
| pain of death
| diordiderot wrote:
| And eliminate child labour laws. All these kids expecting free
| lunches and what not.
| zackmorris wrote:
| Investment in general.
|
| After the global awakening, the rest of the world doesn't want to
| do our work for pennies on the dollar anymore.
|
| For example, Apple won't be able to enjoy high profits on the
| back of indentured servants at Foxconn. Marketplaces like app
| stores and Amazon won't be able to skim such high percentages
| from the people doing the actual work of making and shipping
| things. Even portals like Google will find that their best
| efforts can't keep up with the dizzying pace of technological
| improvements in areas like machine learning as tech becomes more
| and more democratized.
|
| I have a question about this: I perceive profit as theft because
| I've spent my life working for employers for pennies on the
| dollar too. I'm averse towards investing because I don't want to
| use people. What's a "fair" return on investment? 5%? 10%? Or is
| investment inherently usurious? I'm concerned that my
| unwillingness to invest could end up being a burden on
| Millennials and Gen Z, the same way that the Boomers refusing to
| invest in Gen X caused us many lost decades. Your experience may
| not have been like mine, but trust me, the
| proletariat/plebeians/paupers of the world are wrestling with
| this as one of the central issues this century. Can we have
| capitalism without exploitation, and if so, how will we
| accomplish that?
| pydry wrote:
| I think the investing goal for the next decade is to pick the
| asset class that will lose the least.
|
| Stocks wont do well, but that asset class could still be stocks.
| Kon-Peki wrote:
| Let's say the market does what he is warning it will do:
|
| Dividend reinvestment will be a major component of you
| portfolio returns. So you need to focus on companies that pay
| dividends. Also, avoiding obvious scam companies. Hanging out
| here has already given you a picture of how to identify a
| certain class of such companies long before their IPO ;)
| blantonl wrote:
| Great.
|
| One of my favorite investment strategies is to sell options, so
| I'll sit back for the decade and collect theta.
| max_ wrote:
| > "There's a high probability in my mind that the market, at
| best, is going to be kind of flat for 10 years, sort of like this
| '66 to '82 time period,"
|
| Is there a resource that has the chart between '66 & '82 so I can
| have a look at what it was like?
| JKCalhoun wrote:
| I played a bit with this:
| https://www.barchart.com/stocks/quotes/$DOWI/interactive-cha...
|
| You can drag to scroll back for historical data.
| kritiko wrote:
| Just found this article:
| https://awealthofcommonsense.com/2014/06/1966-1982-stock-mar...
| matt_s wrote:
| And Michael Burry has been predicting crashes every few years
| since the 2008 one.
|
| And Bill Ackman predicted 'hell is coming' at the onset of the
| pandemic and made $2B [0]. And there were US Senators that also
| did possibly illegal things to pull money out of the market
| before the public knew about the pandemic.
|
| Outside of disclosures filed with the SEC, stock trading is
| anonymous yet they will have all sorts of headlines like today on
| Yahoo Finance it states "Stock futures tumble on heels of grim
| warning from FedEx". So all players in the market are just
| selling everything across the market to the tune of -1.4% because
| FedEx is having issues? I question headlines in the financial
| sector, more often lately it feels like its just what they want
| you to believe to get you to take actions that benefit
| themselves.
|
| [0]https://www.cnbc.com/2020/03/25/bill-ackman-exits-market-
| hed...
| bidirectional wrote:
| Ackman said hell was coming, was appropriately hedged using
| instruments which would appreciate when hell did indeed come,
| and made $2bn on his hedge which offset the losses in his
| equity positions. He didn't net profit $2bn.
| llampx wrote:
| He appeared on TV crying while his firm was unrolling their
| hedges and buying stock for the rebound. Never trust media.
| steveBK123 wrote:
| its called "talking your book"
| dkrich wrote:
| Ackman has a very mixed track record and has not had
| particularly great returns. To believe that he somehow
| predicted the entire sequence of events is being incredibly
| generous. Earlier this year he laid out an unbelievably
| lazy bull case for Netflix when it was around $350/share
| and said he had accumulated over a billion dollar position
| only to sell it a month later a massive loss saying the
| story had changed.
| Buttons840 wrote:
| This is the first time it's occurred to me that _any_
| "market-expert" who is widely listened too has an inherent
| conflict of interest. By misleading the public they can
| increase their own gains.
| impulser_ wrote:
| There is a reason why they hedge funds underperform the market.
| Not by a little, by quite bit.
|
| They try too hard to predict the market, when in the long run
| if they just stayed long they would have done better.
| bidirectional wrote:
| Why is 'the market' the only benchmark worth comparing to?
| For many investors it is too volatile, they can take worse
| performance if the chance of major drawdowns is reduced.
| selectodude wrote:
| The key word in hedge fund is hedge. They're not supposed to
| outperform the market. They're supposed to not fall as far as
| everything else during a crash as well.
|
| Granted, that's not really how things work in practice
| anymore, but that's supposed to be the idea.
| coldcode wrote:
| I read a lot of these type of predictions, often you see some
| people say it's a great time to buy, and others it's a bad time
| to buy, and generally you will only remember the people who
| guessed correctly, so none of this helps you today at all.
| Every time those people who got lucky will appear in some
| future ad or article making a new prediction, and generally
| fewer will be lucky twice. In the long run, everyone is likely
| wrong.
| hotpotamus wrote:
| It turns out it's hard to make predictions; especially about
| the future.
| taylodl wrote:
| This is why the dollar cost averaging technique works so
| well. No, it's not likely to provide you a financial
| windfall, but it's also not likely to yield you financial
| devastation either. If you're investing for retirement then
| it generates quite a bit of wealth in the long term.
| serioussecurity wrote:
| This is incorrect.
|
| https://static.twentyoverten.com/5980d16bbfb1c93238ad9c24/r
| J...
| taylodl wrote:
| Yeah, no. Us normal working stiffs don't typically have a
| $20M windfall we're looking to invest. That's a whole
| other ballgame.
| llampx wrote:
| I wonder how well dollar cost averaging is going to work in
| an era of rising interest rates.
| lexapro wrote:
| Yeah, but if you have a lump sum of money it's still better
| to invest everything at once if you plan to hold it for
| decades. Vanguard has a good paper on that titled "Dollar-
| cost averaging just means taking risk later". And as you
| get close to retirement, you need to be mindful about
| sequence of returns risk.
| nprateem wrote:
| Got a link please? That surely depends on having a > 20
| year time horizon
| serioussecurity wrote:
| https://static.twentyoverten.com/5980d16bbfb1c93238ad9c24
| /rJ...
| tunesmith wrote:
| This one isn't bad:
|
| https://www.reddit.com/r/Bogleheads/comments/wpqsno/lumps
| um_...
|
| And here's a question. Say you have a windfall and you're
| deciding whether to lump sum or DCA it. And you decide to
| DCA. So therefore, why wouldn't you liquidate your entire
| investment portfolio and also DCA that the same way?
| andrewf wrote:
| If you liquidate your portfolio you're going to have to
| recognize (pay tax on) capital gains.
| tunesmith wrote:
| Good point, but how about for retirement portfolios?
|
| I'm trying to point out the irrationality of it - after
| all, I don't think people desist from liquidating _only_
| for tax /fee reasons. "I would sell everything today and
| DCA back in over the next year if not for those pesky
| taxes and fees! (shakes fist at sky)"
| foobarian wrote:
| Your comment makes me realize that in the medium term, after
| most of the unlucky predictors drop off, you are
| statistically likely to be left with a few really lucky ones
| (i.e. if a thousand people are tossing coins, you're likely
| to get one guy with a streak of 10 heads), and these
| individuals are perfect to put on pedestals as rare and
| brilliant talents.
| [deleted]
| [deleted]
| tchalla wrote:
| Your comment reminds me of Buffet's 1984 article titled
| "The super investors of Graham and Doddville". Here's the
| relevant excerpt
|
| > Before we begin this examination, I would like you to
| imagine a national coin-flipping contest. Let's assume we
| get 225 million Americans up tomorrow morning and we ask
| them all to wager a dollar. They go out in the morning at
| sunrise, and they all call the flip of a coin. If they call
| correctly, they win a dollar from those who called wrong.
| Each day the losers drop out, and on the subsequent day the
| stakes build as all previous winnings are put on the line.
| After ten flips on ten mornings, there will be
| approximately 220,000 people in the United States who have
| correctly called ten flips in a row. They each will have
| won a little over $1,000. Now this group will probably
| start getting a little puffed up about this, human nature
| being what it is. They may try to be modest, but at
| cocktail parties they will occasionally admit to attractive
| members of the opposite sex what their technique is, and
| what marvelous insights they bring to the field of
| flipping. Assuming that the winners are getting the
| appropriate rewards from the losers, in another ten days we
| will have 215 people who have successfully called their
| coin flips 20 times in a row and who, by this exercise,
| each have turned one dollar into a little over $1 million.
| $225 million would have been lost, $225 million would have
| been won. By then, this group will really lose their heads.
| They will probably write books on "How I turned a Dollar
| into a Million in Twenty Days Working Thirty Seconds a
| Morning." Worse yet, they'll probably start jetting around
| the country attending seminars on efficient coin-flipping
| and tackling skeptical professors with, "If it can't be
| done, why are there 215 of us?" By then some business
| school professor will probably be rude enough to bring up
| the fact that if 225 million orangutans had engaged in a
| similar exercise, the results would be much the same -- 215
| egotistical orangutans with 20 straight winning flips. I
| would argue, however, that there are some important
| differences in the examples I am going to present. For one
| thing, if (a) you had taken 225 million orangutans
| distributed roughly as the U.S. population is; if (b) 215
| winners were left after 20 days; and if (c) you found that
| 40 came from a particular zoo in Omaha, you would be pretty
| sure you were on to something. So you would probably go out
| and ask the zookeeper about what he's feeding them, whether
| they had special exercises, what books they read, and who
| knows what else. That is, if you found any really
| extraordinary concentrations of success, you might want to
| see if you could identify concentrations of unusual
| characteristics that might be causal factors. Scientific
| inquiry naturally follows such a pattern. If you were
| trying to analyze possible causes of a rare type of cancer
| -- with, say, 1,500 cases a year in the United States --
| and you found that 400 of them occurred in some little
| mining town in Montana, you would get very interested in
| the water there, or the occupation of those afflicted, or
| other variables. You know it's not random chance that 400
| come from a small area. You would not necessarily know the
| causal factors, but you would know where to search. I
| submit to you that there are ways of defining an origin
| other than geography. In addition to geographical origins,
| there can be what I call an intellectual origin. I think
| you will find that a disproportionate number of successful
| coin-flippers in the investment world came from a very
| small intellectual village that could be called Graham-and-
| Doddsville. A concentration of winners that simply cannot
| be explained by chance can be traced to this particular
| intellectual village.
|
| https://www8.gsb.columbia.edu/articles/columbia-
| business/sup...
| danielmarkbruce wrote:
| The funny thing about these people is that they did
| really well for a few decades. And then it dried up.
| Computers, the internet, software - it changed the world
| so much in the last 20 years that many things which
| looked like "deep value" just went belly up.
|
| Eddie Lampert is a great example of a (brilliant) graham
| and doddsville guy who basically got squashed by not
| understanding the world had changed.
|
| Over the past 20 years the tech "intellectual village"
| has been the smart money. They'll probably be for another
| 20 years. And then someone will point to it with a
| similar explanation that Buffett had. And then they'll
| get crushed by whatever multi-decade driving force comes
| next.
| twawaaay wrote:
| What you do is look at the rationale that was given
| _before_ it happened. You look at their reasoning and
| figure out if it was actually what happened in reality.
| Just make sure you are not picking up on their
| rationalisation _after_ the fact.
| danielmarkbruce wrote:
| The rationalizations before they happened are always very
| intelligent sounding, even in retrospect. If you have 100
| intelligent sounding speculators lay out their reasoning
| and one hits the jackpot, it doesn't mean much.
|
| The general problem is each has a mental (or computer)
| model of the world that is a vast simplification of the
| world. When they get it right it sounds like they
| understood and accounted for all the variables. They
| never did.
| twawaaay wrote:
| You are not looking if they "sounded" intelligent. You
| are looking if they were true.
| danielmarkbruce wrote:
| If I flip a coin and someone has an intelligent sounding
| reason for it to come up heads... and then it does... it
| means practically zero.
|
| Being right means little when there are 100s of folks
| with predictions and reasons.
| xdavidliu wrote:
| if someone made a correct prediction on a coinflip,
| you're more likely to believe they knew what they were
| doing (rather than just get lucky) if they sound
| intelligent
| KptMarchewa wrote:
| The fact that they had good reasoning in the past does
| not guarantee they will continue in the future.
| twawaaay wrote:
| You are right, but it is not very useful way of looking
| at the world.
|
| Sometimes you just need to trust people on certain things
| to be able to make useful decisions having very little or
| no knowledge in the subject.
|
| One useful way of dealing with this is to look at the
| past performance of the person.
|
| Assuming you have no other information about the market,
| if you see a person having track record of well-reasoned,
| accurate market predictions it is probably as good signal
| as it gets that you should trust their predictions.
|
| Ideally you would want to check this with other people
| having knowledge in the topic (and also good track
| record), check that their knowledge is still applicable
| to circumstances (if they were able to give good
| predictions in peace maybe they are not suited to doing
| this in the time of war) and hopefully also educate
| yourself just a bit to be able to ask clarifying
| questions and spot obvious problems.
| thingification wrote:
| So who has done well on this score in your book? :-)
| xdavidliu wrote:
| "well reasoned" is often easily faked, and often confused
| with "articulate"
| ericbarrett wrote:
| The inverse of this is an old, old scam:
|
| 1) Send out a bunch of letters predicting moves on
| (usually) penny stocks; a different set of stocks is used
| for each letter
|
| 2) A few days later, cull the recipients whose predictions
| didn't work out. Send another batch of predictions, again
| individually varied, to the remainder
|
| 3) Repeat once or twice more and you've got a small list of
| people who've received three or four correct predictions in
| a row. Hammer them with solicitations to invest in your
| "foolproof" scheme
|
| 4) Collect (via a pump-and-dump, or just solicit the money
| directly and run)
|
| Nowadays it's probably happening in Telegram groups or some
| such. Or you could do this on Reddit et al. using different
| usernames, and only keep the accounts that were right.
| sorokod wrote:
| Pretty much like the brilliant founders of successful
| startups.
| babyshake wrote:
| > Every time those people who got lucky will appear in some
| future ad or article making a new prediction, and generally
| fewer will be lucky twice.
|
| Survivorship bias, survival bias or immortal time bias is the
| logical error of concentrating on the people or things that
| made it past some selection process and overlooking those
| that did not, typically because of their lack of visibility.
| daniel-cussen wrote:
| You shouldn't read those headlines. Both the ones walking you
| off a cliff in increasingly devious ways the interviews with
| Warren Buffett saying buy and hold which is a pessimal
| strategy, and the headlines announcing x happened because y as
| if you should think y leads x. It did not, they don't know
| that, news blogs get a pass in telling people false causes
| after the fact, dude it's purely made up and it's a guessing
| game to train you to guess as it suits them. Plato's Cave.
| lexapro wrote:
| Why is buy and hold a "pessimal strategy"?
| daniel-cussen wrote:
| [I talk about predicting the future in this essay. I
| mention that up front because maybe then you can take on
| the walls of text.]
|
| Companies always go to shit eventually and you're left
| holding the bag. Spesh because there's no dividends and
| companies never wind down, they just do gambits with
| borrowed money. That's the Way of the American CEO. Dude
| these dumbasses even publish books about that being the
| way, like Jack Welch's suckafucking book _Straight from the
| Gut_ yeah spilled his guts alright.
|
| That means that when they can't pay that debt, the
| creditors have priority, shares get no part of any of the
| money. So CEOs can't own debt on their own company (I
| _think_ , there's rules, like they all get broken but
| there's still rules and breaking them has a cost like in
| slaps on the wrist, like it has to be very intermediated,
| because otherwise duh first thing everybody would do is
| short the company they run and fly it into a mountain). So
| it looks very smooth, very well thought-out, high-
| integrity, the American tax system is like that too, looks
| air tight on form 1040, and if you dig it looks more and
| more airtight until--whoosh cracked window on an airplane
| everything flying out. Nah.
|
| Dude get in and get the fuck out. Know when to sell. Bill
| Browder, whom I don't think much of in most regards and
| have ripped on here explained why he's a nomad. But having
| talked him down, he does say smart dead-on-the-money intel.
| You gotta know first off when to get in. Under the thesis
| that it's exponential (it's impossible to respect that
| thesis, cubic at best, cubic is short and sweet, "ex-po-
| nen-tial" is a mouthful) so you can get in whenever it
| makes no difference. There's no sexy part of the
| exponential, every part of the exponential is sexy. Like I
| don't know I got advice like get out right when it's taking
| off--it never takes off. It's identical to its derivative,
| no inflection points, no maxima, no minima, it's the
| comparable in its uniformity to a flatline. In a sense it
| is a flatline because of inflation, that connects both
| curves, e^x - e^x = 0, f(x)=0 is the flatline. Alternately,
| e^x / e^x = 1, f(x)=1, though that's a totally different
| flatline.
|
| So there is a moment to get in and that's when there's a
| _genuine_ crash that _nobody_ saw coming, that later is
| said to be impossible to predict--dude that 's when. But to
| get in at that point you need to have gotten out before
| then, ideally at the peak. So because of relativity you
| can't react to the peak, see oh it just peaked time to sell
| --no there's a delay, like coupla hours for a customer to
| talk to his broker, so gotta preempt the peak by a coupla
| hours, that means gotta give the sell order pre-peak--
| meaning while it's still going up according to some smooth
| description of the Brownian curve (you never see it in the
| full grain, that information costs money an hn user doesn't
| pay). So it's critical your broker try to talk you out of
| it--that's a very good sign, just convince him you're
| stupid and he'll say "eh, masochist"--that's exactly what
| you want to hear. Because if you do depart the cyclical
| assets at the peak of the cycle and transfer it to
| countercyclical assets, then you get a bonus from them (not
| much, gold is politically oppressed by practically all
| empires, only one exception) so like gold won't double, but
| in my analysis that's because it's too feared so instead
| Bitcoin would jump, and I bet on it on margin almost at the
| trough, and I got 90% of the appreciation in Oct-Nov last
| year.
|
| So that's the thing, selling near the top. So it's a
| totally political move, just like predicting the peak on
| Sep 27 (when the Fed announced the rate hikes, charts lie
| inflation lies that was the peak that was when the shit got
| really sticky and the pipes backed up) 30 days before. So
| for my personal protection, in order not to be subjected to
| additional psychiatric malpractice and experiments and all
| that shit, instead of saying my spine gave me a trillion-
| dollar twitch, I will play the fool card and say it was a
| quadrillion dollar twitch. What's the difference? For me
| both are infinite resources, even a million dollars is
| infinite resources. The difference--even if I say this
| explicitly--is when I say quadrillion shrinks say I'm
| crazy, which is good that's what I want. Chose which ward I
| end up in carefully. Dude no spinal taps.
| matt_s wrote:
| For example, say you left a company and transferred a 401k
| balance into Vanguard and put it into VTSAX (total stock
| market ETF) with no ongoing deposits. Lets say you thought
| the market was going to go down and on Jan 3rd 2022 you
| yoinked out your entire balance which for the sake of easy
| math was exactly $100k (not take a withdrawal, just pull it
| from the ETF). Today you would still have $100k sitting
| there in a placeholder account earning $0 (its like a no-
| mans-land account for moving money in between funds, or if
| you were prepping an actual withdrawal).
|
| If you let that $100k balance stay in VTSAX on Jan 3rd, you
| would be -19.15% and have $80,850 sitting there today.
| Granted in this example there aren't regular deposits going
| in so it really is just money parked there. If you are
| continually contributing money into a 401k or other tax
| deferred account, contributing as the market goes down is
| fine because you're averaging down with the market. Or
| maybe its not fine depending on your personal circumstances
| (i.e. going to retire soon or something like that).
| NegativeK wrote:
| I've always interpreted Buffet's advice as aimed at time
| periods way longer than one year.
| daniel-cussen wrote:
| Not like he has a fucking Bloomberg terminal with no
| latency or anything. Like he can't spell out FPGA's but
| he delegates. Not half as senile as he makes himself
| look, not a shit mathematician at all, not a folklore-
| driven dude that anybody can imitate (counterfactual,
| that's part of the business), publishes information on
| his colon biopsies for a reason, he is rich because _he
| wants to be rich_ , he likes money. Plus he's the
| designated "Richest Man in the World" trading off with
| Bill Gates like they're a wrestling team. Makes no
| fucking sense, wealth has been aggregating incredibly for
| thirty years, rich getting richer, more stratified, more
| clustered, according to literally everyone even USG
| census, everyone. _But_ the richest man in the world has
| had 60 billion dollars on the nose since 2000? What the
| fuck? Apparently now it 's a little higher, Jeff Bezos
| and Elon Musk, at like $160 or some billion...like no
| it's not. Diminished variance stedda amplified variance.
| Silva Paradox, http://fgemm.com. An actual valuation of
| their wealth would significantly diminish it, and inform
| others of it, they don't know really. Only a hobo can
| look in his pocket and say "I have 550 pesos" a rich man
| it's like either his company has a fluctuating market cap
| or he needs armies of accountants and lawyers and like
| occasionally vudu priests literally "Vudunomics" like
| they believe in magic. Why not? There can be a physics
| explanation behind it that will not be understood for
| hundreds of years, if it works hell. Yeah. If it works
| Hell.
|
| White magic or black magic? Well preferably white but
| when told that requires giving all wealth away to the
| poor as the first step, they like say...uh...what's the
| other one? Be richer and richer, always, black magic. OK
| that works better. And the richest men wrestling team
| agreed to give half their wealth away, which is OK that's
| cool in principle, I don't have a read on that. What I
| can say is white magic simply is hard, you can't
| successfully give away all your money, you end up with
| more even more money, and then you give that away and you
| get it all back, give all all of it away get down to a
| penny. Apologize to a beggar when you give it to him
| (it's considered insulting) dude riches leak into your
| ascetic life, from every nook and cranny, out of nowhere
| like not quite to the point of finding cash on the
| sidewalk (who knows, any day now, it's becoming a sick
| game). Spesh when you have faith, a mustard seed, thing
| is a mustard seed is a huge amount of neurons, that's a
| subsection of your brain that needs to germinate from
| somewhere, very tricky very tricky, and it doesn't work
| at all half-way. It's all or nothing. Saying more would
| make it impossible for you to develop it. Matthew 17:20,
| that's all I got, that's all you need.
|
| Whereas if Warren Buffett asks me, I'd say "you're rich."
| Simple as that, and that's the actual question, it's in
| practice binary, does he have to worry about money or
| not? No because he's rich.
|
| No, Buffett has no bloomberg terminals, no technology he
| does understand (he gets for instance stock tickers, gets
| a ton of things, plays dumb, and some stuff he does in
| fact not get and is truthful about it, like investing in
| Apple, he doesn't get that). Yeah bajillion dollars and
| gets his information for free on yahoo finance like you
| or me.
| llampx wrote:
| The best application of GPT-3 I've seen.
| daniel-cussen wrote:
| The best application of GPT-3 I've seen.
| 01100011 wrote:
| IDK what OP believes, but to me, the "Boglehead" strategy
| is great, with giant caveats.
|
| Most devotees I talk to get visibly frustrated when I
| suggest that you can look at larger macroeconomic forces,
| like COVID, supply chain issues, Fed manipulations(both
| positive and negative) and make educated predictions on the
| direction of stocks. My guess is that these are folks who
| just don't want the frustration of learning about these
| things, and I get that. It is a significant cognitive load
| to maintain an understanding and awareness of market
| influencing factors.
|
| I use a family member as an example who was told by their
| money manager to move to cash at the beginning of the year.
| That wasn't just dumb luck. Was it a sure bet? Nothing is
| in this world. Do you bring a winter coat to a July outdoor
| event in Phoenix? I mean, it _could_ be cold, right? But
| yet the writing was on the wall for the direction equities
| and bonds would take this year.
|
| Can you perfectly time the bottom? No. It's also important
| not to be too conservative. The majority of gains in a
| stock market cycle are made in the first sprint out of the
| gate when everyone is still fearful. But you can know when
| things are peaking and GTFO before the slide. You don't
| need to be Michael Burry to spot these things either. You
| just need to not watch CNBC and Cramer or any of the other
| paid shills.
| mccorrinall wrote:
| And every time Burry shorted the top. Looks like this time he
| actually hit the long term reversal instead of local high.
|
| So, he was always waiting for this and this time he gets green
| numbers big time.
| melling wrote:
| How about the Biggest Bear of them all.
|
| https://finance.yahoo.com/news/super-bubble-yet-burst-jeremy...
| behaveEc0n00 wrote:
| Chomsky has been calling out their effort to get you to take
| actions that benefit "them" for decades:
| https://youtu.be/N11tcnPBwf4
|
| Jim Cramer said the quiet bits out loud:
| https://youtu.be/gyaPf6qXLa8
|
| https://youtu.be/r07Gg92YjOI
|
| US military industrial complex donated propaganda research to
| unis after Korea and it made its way to journalism, behavioral
| economics, advertising, and marketing programs.
|
| "Stimulate as best as possible an emotional mood, insert
| talking point so next time that mood bubbles up the message
| comes to mind."
| spaceman_2020 wrote:
| > And there were US Senators that also did possibly illegal
| things to pull money out of the market before the public knew
| about the pandemic
|
| I just found out that there's a new ETF being filed that tracks
| trades by democrats and republicans.
|
| Probably beat the market easily
| Aaronstotle wrote:
| What's the name for it?
| gumby wrote:
| Does one group do better than the other?
| triceratops wrote:
| They disclose their trades a month or two afterward. If
| there's any confidential info embedded in those trades its
| value is probably gone by the time we find out about them.
| fullshark wrote:
| My knee jerk reaction was yours, but he does flesh out his
| argument in the piece, and it makes sense...
| sb057 wrote:
| >So all players in the market are just selling everything
| across the market to the tune of -1.4% because FedEx is having
| issues?
|
| FedEx's issues is that their volume is down massively. High
| (nay, accelerating) rates of trade are the foundation of the
| modern economy. If trade starts to slow down, or, Lord forbid,
| _decline_ , then yes that can have massive negative
| repercussions.
| foobarian wrote:
| Based on the last few years of my (and a relatively wide
| friend circle) experiences with FedEx I wouldn't be surprised
| if they are just suffering from getting outcompeted by Amazon
| and others. If their internal logistics are as bad as what
| the customer-facing experience would lead me to believe, I
| worry for their future.
|
| Edit: completely subjective and armchair-quarterback-like
| opinion, of course.
| prottog wrote:
| For what it's worth, I always have issues with UPS and
| never with FedEx. It could very well be a local thing.
| [deleted]
| kevin_thibedeau wrote:
| The only thing better than seeking alpha is creating alpha.
| mmastrac wrote:
| As the old joke goes: Burry predicted 20 of the last two
| crashes.
| twawaaay wrote:
| Burry is doing a lot of pretty short term speculation,
| according to his filings. What is a crash for a short term
| investor might be a bump for a long term one.
| JKCalhoun wrote:
| Yeah, but someday they'll be right.
| danjoredd wrote:
| Yeah but just because a broken clock is right twice a day
| doesn't mean you will keep looking at that clock
| seydor wrote:
| I predict it will go up, it will go down. On average it will be
| flat
| papichulo4 wrote:
| Does anyone understand the "They're like reformed smokers"
| comment?
|
| > "They've gone from printing a bunch of money, like driving a
| Porsche at 200 miles an hour, to not only taking the foot off the
| gas, but just slamming the brakes on."
|
| I understand the Porsche example, but I don't understand the
| smoker reference.
| mountainriver wrote:
| I have a very different position on this. I think we will see the
| most growth we've ever seen in the next decade and it will be
| powered by AI.
|
| I think most of these investors don't really understand how close
| we are to have very useful AI and what it's impact will be. We
| are roughly on the verge of another industrial revolution
| CSMastermind wrote:
| > I think most of these investors don't really understand how
| close we are to have very useful AI and what it's impact will
| be. We are roughly on the verge of another industrial
| revolution
|
| Tell me more. I'm willing to be persuaded by this position but
| I'm skeptical.
|
| What specific AI breakthroughs do you think will happen on what
| timelines?
| mountainriver wrote:
| Just take AI assisted programming, if it makes devs twice as
| effective at their jobs then its massively increased the
| output of our most profitable industry.
|
| This is just one field, AI will impact the output of most
| fields
| jdhn wrote:
| >We are roughly on the verge of another industrial revolution
|
| I was told that the "internet of things" would bring about
| unparalleled gains in manufacturing, and then that very quietly
| went away. I'm not holding my breath for AI to deliver on what
| IoT was supposed to do.
| mountainriver wrote:
| AI isn't IOT, its the greatest invention we will have ever
| created
| jawns wrote:
| AI will only be a positive revolution if it's not putting a
| large number of people out of jobs, but merely increasing their
| productivity.
|
| Or, if it DOES put a lot of people out of jobs, it would be
| good for them to have some ownership over the AI, so that it's
| the labor force who reaps the benefits, not just the
| corporations. The bad scenario is mega-corps replace lots of
| humans with a fleet of machines owned by the mega-corp. The
| better scenario is we see widespread ownership of AI-powered
| productive property (that is, distributism), such that mega-
| corps contract out jobs to humans who own that property, and
| the property allows those humans to provide better service than
| before.
| mountainriver wrote:
| Yeah its a concern there may be a transition period. I have
| the take that it will just make everyone way more capable and
| we can up our dreams
| kory wrote:
| I think the economy is hitting real, hard barriers in resource
| extraction, energy usage, and number of people that buy and
| sell. That's where stagnation comes from.
|
| The real economy will stagnate. AI can automate some work and
| intensify future technological discoveries, but that won't make
| energy any cheaper, clean our environment, create more humans,
| or make resources as easily extractable as they were 100 years
| ago.
|
| The real economy can't grow too much more than it's current
| size, at least in the physical world.
| mountainriver wrote:
| Yeah there are hard limits but I think AI will help us be way
| more efficient and probably optimize reusability.
| vsareto wrote:
| None of the AI stuff really solves things like affordable
| housing or keeping wages up with inflation (or addressing
| inflation). It's not going to magically give us more energy
| without environmental impacts, or settle conflicts between
| countries.
|
| Building another AI-marketed SaaS only benefits people who
| don't need those benefits. In all likelihood, it'll just give
| us more bullshit jobs.
| mountainriver wrote:
| It might, you can't possibly know that. If the coming AIs
| make humans twice as productive, then we've boosted our
| output tremendously.
| zikduruqe wrote:
| https://theanarchistlibrary.org/library/david-graeber-
| bullsh...
|
| I just heard of this the other day and it is in my queue.
| jsight wrote:
| When people start making these predictions, its often a good time
| to buy.
| 2OEH8eoCRo0 wrote:
| It's always a good time to buy. Stay the course.
| baq wrote:
| this is not 'people', this is the druck. pay attention...
| ethanbond wrote:
| But in turn when people make _these_ predictions, it's often a
| good time to sell...
| Arubis wrote:
| It's almost as if anyone with the actual ability to predict a
| market movement has a disincentive to talk about it in
| public.
| weego wrote:
| You're flying dangerously close to buying into the idea
| that anyone working in markets actually has any meaningful
| ability to predict, and isn't just semi-gambling in a semi-
| rigged environment.
| Arubis wrote:
| I don't especially mind brushing up against that idea so
| long as my feet are firmly planted in "...and _that
| person is not me_" firmament.
| foobarian wrote:
| ^ market forces at work
| fullshark wrote:
| If interest rates get high enough, putting money in bonds or even
| CDs will start to get appealing for sure. That used to be the
| primarily saving mechanism for consumers before policy required
| us all to speculate on stocks.
| seshagiric wrote:
| When drive into my neighborhood downtown areas, I still see
| 'hiring' boards at lot of places with a healthy % advertising
| higher than minimum pay hourly rate. At the same time I also over
| heard complaints at grocery & super markets on how things are
| getting costlier. An elderly gentlemen was complaining how he
| used to get 3 items but now gets only 2 for the same price. Even
| as a layman, I think the high employment rates and healthy
| housing/stock markets mean there is lot of money in the market
| which is driving demand which in turn driving inflation. With Fed
| tightening up interest rates, money may stop flowing into the
| market yet and hence ease the demand eventually inflation. A
| likely side effect is companies have no money to fund growth and
| hence recession (and job cuts etc.). Next one year is going to be
| tight.
|
| However, its still a stretch to say the stock market will crash,
| stay flat etc. etc. I think these predictions are more media
| created (they are excellent click bait) than actual warnings from
| genius investors. For example, if you follow Michael Burry's
| tweet it's more of a rant or running commentary (combined with
| partisan view point) than doomsday predictions.
|
| The bigger problem in my opinion is partisan politics is stealing
| attention from more important problems. Dems are wrong with the
| number of freebies being thrown in but Reps are also wrong
| ignoring climate change (or kicking up the abortion repertoire).
| The checks and balances thing is not working currently.
| smm11 wrote:
| Not at all the same thing, but Gartner Research tore OS X apart
| in the late 90s, and said Apple was dead and walking.
| bigmattystyles wrote:
| Once you learn about Paul the octopus, it puts all off these
| predictions into perspective. Predictions have low reputations
| costs when wrong because the public will just forget about it. If
| he's right, he'll remind us at every chance he gets.
| https://en.m.wikipedia.org/wiki/Paul_the_Octopus
___________________________________________________________________
(page generated 2022-09-16 23:02 UTC)