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I think ZH is a great site, and I read it daily, BUT if you don't take it with a truckload of salt then it will be hazardous to your wealth. Seriously, if you h

I think ZH is a great site, and I read it daily, BUT if you don't take it with a truckload of salt then it will be hazardous to your wealth. Seriously, if you had been in the ZH bear trade since 2009, then you missed out on the greatest stock market rally in a generation. I know, because I missed the first half of said rally as a ZH reader until I realized that the constant drumbeat of negative news from that site was distorting my judgement. Here is what ZH is good for: they have stuff before anyone else, because they'll print almost anything. For instance, after San Bernardino those guys had details way before other outlets, because they're willing to go to press with just "some guy overheard this on the police scanner and tweeted it". So when you read ZH you see stuff first, but you place a big mental asterisk by it until their scoop trickles up the media food chain and starts to get confirmed as real reporters do actual work on it. I like seeing stuff first, before everyone else gets it, hence my continued regular reading of ZH (again, I keep a 40lb bag of Morton Salt by my desk with the ZH logo on it, though).

ConfuciusSay02 10y ago
Frankly, you should be keeping that salt boulder at the ready for all media you read today. Not just ZH.
dismal2 10y ago
What do you think about the rally now? I too have been following the site since it started. Around 2011 or so I realized I was missing the greatest rally, possibly ever, but I was an unemployed millennial with no money to invest. In the past 2 years or so I'm finally on a good financial footing but I really think this monetary experiment is coming to an end and I dont think I'm thinking that only from reading doom media. Hope I'm wrong, because another downturn would be bad for this country.
- mahyarm 10y ago
  I've realized in my life trying to predict macro is pretty damn hard. Because even if something is irrational, it might be in a whole bunch of very powerful group's interests to keep on propping up the irrational for a very long time. For example, I come from Vancouver. In Vancouver, the 2007 real estate bubble never stopped, wages stayed at their Reno, NV levels. Having Vancouver RE has had about a %30 annualized return for about 15 years. Now an average house is about 1.5-2 million dollars. The housing market is completely irrational, but knowing how it works it might be another 'boom' decade or it might all collapse on itself in the next few years.
- jonstokes 10y ago
  There are two principles at work here. First is Lord Acton's rule: "things that can't go on forever, don't." The second is Keynes: "the market can stay irrational a lot longer than you can stay solvent." Everyone knows that this has to end -- not just in doom media but everywhere -- but all smart traders know that being early is the exact same thing as being wrong. You cannot time whats coming, and unless you're running money for somebody else, you don't have to. The only thing you can do is diversify. I know that this is standard advice and it's not nearly as sexy as betting on The Big One, but having a healthily diversified portfolio is literally the only way to stay sane. If you just have to buy catastrophe insurance, then treat it like what it is: a small hedge against a long tail eventuality. That means don't bet your lifestyle on it. For me, the most powerful lesson from the GFC is that /everyone/, without exception, is net long The System, and when you bet against The System you bet against the combined best efforts of the most advanced civilization that this planet has ever produced. That is stupid, so don't do it.
  - StillBored 10y ago
    The problem is that you can't properly diversify anymore, I went looking for things that weren't correlated. Heck during all the fed/government meddling things that should have been negatively correlated were moving together. That is when I concluded the whole thing was rigged, and it was better to go with the herd than get run over by it. In my own way I bet against the housing boom of the early/mid 2000's too. I didn't really lose any money, but what I learned is that I should have just went out and purchased the largest house I couldn't afford, because the government made it clear that they would do anything to prop up housing/banks/etc. We will never see a _REAL_ price crash in housing because as soon as the markets start to dip a few percent the 2% loans, tax breaks, and bailouts for banks holding empty real-estate they cant sell because doing so will cause the prices to drop further.
- nugget 10y ago
  As other posters have said: diversification is the only free lunch because market timing is nearly impossible. The other thing you can do is invest in yourself and increase your income earning potential (which, to me, means both the absolute amount of income you make and how much your enjoy your job and therefore how long you can last in it). As returns on financial capital decrease, returns on human capital (your own labor) become relatively more important and attractive. If we are truly headed for decades of ZIRP and sub-4% (or even flat) real returns then YOU are the best place to invest your money.
GigabyteCoin 10y ago
Running a story with whatever the latest gossip on twitter happens to be is not news. Sure you'll get lucky occasionally, but let's be realistic here. If you don't care at all about journalistic integrity, then why not just follow the trending twitter hashtags yourself from their search page? You'll get your news even faster that way.
- jonstokes 10y ago
  I get what you're saying, but it's not quite like that with ZH. Those guys may not do a bunch of legwork, but they have good instincts for which stories are likely to be worth following up on and which are just lizard man nonsense. Their instincts act as a kind of initial filter. There are other sites you can go to if you just want to see anything and everything (and there's always Twitter), but the value of ZH (which I probably should've spelled out in the parent) is that they do an initial pass with their noise filter, and while there's still a ton of noise there's also enough signal there after they've done their thing that it's still worthwhile.
pfarnsworth 10y ago
I lost about $100k in 2009 buying into the ZH-gloom and doom mentality, unfortunately. Everything they said made sense, but it just wasn't how the world works.
- nugget 10y ago
  In a 2009 bear's defense it was unprecedented Government intervention that lit the fuse under the markets and led us here. I remember reaching a point myself where I realized that policy was driving the markets more than any other factor and quit actively trading completely. You can be right but if the Feds take the other side of your trade you will be bragging about it to your fellow corpses in the graveyard.
  - jonstokes 10y ago
    Yep. At the time, I was reminded of a quote from The Iliad, which I can't find anymore. It was something to the effect of, when the gods come down to earth to meddle in the affairs of mortals, the only ones who win are the ones whose side they take.
    - hammock 10y ago
      We everlasting gods . . . Ah what chilling blows we suffer—thanks to our own conflicting wills— whenever we show these mortal men some kindness.
  - pfarnsworth 10y ago
    Agreed. I only wish I figured this out $75k or even $50k sooner :)
    - beamatronic 10y ago
      I feel a little bit better now.
  - JumpCrisscross 10y ago
    > In a 2009 bear's defense it was unprecedented Government intervention The novel part was the purchase of government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities. The Fed's balance-sheet expansion, interest-rate regime and their effects on the market have precedent [1]. [1] http://www.hoover.org/sites/default/files/14110_-_bordo_-_exiting_from_low_interest_rates_to_normality_-_an_historical_perspective.pdf http://www.hoover.org/sites/default/files/14110_-_bordo_-_ex...
JumpCrisscross 10y ago
Reading ZH like Reddit will always turn out to be toxic. It isn't just the low signal-to-noise ratio. The site's core Austrian philosophy is at odds with the forefront of economic evidence. I skim it from time to time. Very quickly. If I see something interesting, I look look at the source. If it's credible, e.g. Reuters, I cautiously read. If it isn't, I research it. Once in a while I'll come across novel, credible sources this way. This is the No. 1 way to get value from ZH. The other time I read ZH is when I have a specific crisis on mind, e.g. Greece/Brazil/Venezuela shitting the pot. ZH throws up a good sense of how the bear market feels. Still terrible analysis. But good sentiment stock.
- misja111 10y ago
  'The site's core Austrian philosophy is at odds with the forefront of economic evidence.' Which evidence are you referring to? Would you mind sharing some of it?
  - JumpCrisscross 10y ago
    A slightly technical read, but here you go: http://econfaculty.gmu.edu/bcaplan/whyaust.htm http://econfaculty.gmu.edu/bcaplan/whyaust.htm.
    - mangeletti 10y ago
      So, a link to conjecture from an associate professor at the PREEMINENT SCHOOL for studying Austrian School economics in the US... is evidence against Austrian school economics? Let me put it this way: there is a lot of financial incentive for Austrian School economics to appear "wrong", because Keynesian "economics" is really all about printing money and earmarking it for buddies within a given office's constituency. Austrian School economics can't really actually be wrong. It's primarily the study of basically common sense things that can be proven a priori, such as subjective value (if you like purple more than I do, a purple bike might be worth more to you than to me... can something like that really be proven wrong?) and ideas like allowing people to spend money as a means of expressing the value of a given good or service. The fact that there is an active movement within our government and its "education" system to apparently disprove such things is preposterous. But given the financial incentives, it's not surprising.
partiallypro 10y ago
ZeroHedge has a lot of shady things, and if you didn't know better you'd think the world was falling apart. That being said, their bearish view is pretty important when it gets confirmed by huge people. For instance, ZH has been beating the drums on high yield debt since summer of last year, then Icahn steps in and make similar comments and takes to task BlackRock CEO about their HY ETF being shady and the underlying market being illiquid. There hasn't been a high yield implosion, but a lot of people are betting there will be sometime in the near future. But maybe there won't be? Everything is a gamble, I've lost plenty of money being too early or too late. You can get decent trade ideas from ZH, but like you said, 95% of their items have to be taken with a grain of salt. The odd part is that most traders, professional traders, and some hedge fund managers frequent ZH and mostly agree on some of their doom scenarios; but the central banks pump the markets with so much money it's impossible to bet against the S&P. "Don't fight the Fed" is a slogan for a reason.
- JumpCrisscross 10y ago
  > ZH has been beating the drums on high yield debt since summer of last year So have John Mauldin, the New York Times's Dealbook, the Financial Times... There are better places to get your bear-market digest.
  - scotch_drinker 10y ago
    John Mauldin and Worth Wray are two really strong voices for the high yield debt problem. I have learned an incredible amount from them and trust them far more than Zero Hedge on such topics. ZH is the frontline pulse but if you don't want to have to filter out 85% of the crap, Mauldin and Wray are excellent sources.
james1071 10y ago
Its click bait plus some useful info.

ConfuciusSay02 10y ago

Frankly, you should be keeping that salt boulder at the ready for all media you read today. Not just ZH.

dismal2 10y ago

What do you think about the rally now? I too have been following the site since it started. Around 2011 or so I realized I was missing the greatest rally, possibly ever, but I was an unemployed millennial with no money to invest. In the past 2 years or so I'm finally on a good financial footing but I really think this monetary experiment is coming to an end and I dont think I'm thinking that only from reading doom media. Hope I'm wrong, because another downturn would be bad for this country.

mahyarm 10y ago
I've realized in my life trying to predict macro is pretty damn hard. Because even if something is irrational, it might be in a whole bunch of very powerful group's interests to keep on propping up the irrational for a very long time. For example, I come from Vancouver. In Vancouver, the 2007 real estate bubble never stopped, wages stayed at their Reno, NV levels. Having Vancouver RE has had about a %30 annualized return for about 15 years. Now an average house is about 1.5-2 million dollars. The housing market is completely irrational, but knowing how it works it might be another 'boom' decade or it might all collapse on itself in the next few years.
jonstokes 10y ago
There are two principles at work here. First is Lord Acton's rule: "things that can't go on forever, don't." The second is Keynes: "the market can stay irrational a lot longer than you can stay solvent." Everyone knows that this has to end -- not just in doom media but everywhere -- but all smart traders know that being early is the exact same thing as being wrong. You cannot time whats coming, and unless you're running money for somebody else, you don't have to. The only thing you can do is diversify. I know that this is standard advice and it's not nearly as sexy as betting on The Big One, but having a healthily diversified portfolio is literally the only way to stay sane. If you just have to buy catastrophe insurance, then treat it like what it is: a small hedge against a long tail eventuality. That means don't bet your lifestyle on it. For me, the most powerful lesson from the GFC is that /everyone/, without exception, is net long The System, and when you bet against The System you bet against the combined best efforts of the most advanced civilization that this planet has ever produced. That is stupid, so don't do it.
- StillBored 10y ago
  The problem is that you can't properly diversify anymore, I went looking for things that weren't correlated. Heck during all the fed/government meddling things that should have been negatively correlated were moving together. That is when I concluded the whole thing was rigged, and it was better to go with the herd than get run over by it. In my own way I bet against the housing boom of the early/mid 2000's too. I didn't really lose any money, but what I learned is that I should have just went out and purchased the largest house I couldn't afford, because the government made it clear that they would do anything to prop up housing/banks/etc. We will never see a _REAL_ price crash in housing because as soon as the markets start to dip a few percent the 2% loans, tax breaks, and bailouts for banks holding empty real-estate they cant sell because doing so will cause the prices to drop further.
nugget 10y ago
As other posters have said: diversification is the only free lunch because market timing is nearly impossible. The other thing you can do is invest in yourself and increase your income earning potential (which, to me, means both the absolute amount of income you make and how much your enjoy your job and therefore how long you can last in it). As returns on financial capital decrease, returns on human capital (your own labor) become relatively more important and attractive. If we are truly headed for decades of ZIRP and sub-4% (or even flat) real returns then YOU are the best place to invest your money.

GigabyteCoin 10y ago

Running a story with whatever the latest gossip on twitter happens to be is not news. Sure you'll get lucky occasionally, but let's be realistic here. If you don't care at all about journalistic integrity, then why not just follow the trending twitter hashtags yourself from their search page? You'll get your news even faster that way.

jonstokes 10y ago
I get what you're saying, but it's not quite like that with ZH. Those guys may not do a bunch of legwork, but they have good instincts for which stories are likely to be worth following up on and which are just lizard man nonsense. Their instincts act as a kind of initial filter. There are other sites you can go to if you just want to see anything and everything (and there's always Twitter), but the value of ZH (which I probably should've spelled out in the parent) is that they do an initial pass with their noise filter, and while there's still a ton of noise there's also enough signal there after they've done their thing that it's still worthwhile.

pfarnsworth 10y ago

I lost about $100k in 2009 buying into the ZH-gloom and doom mentality, unfortunately. Everything they said made sense, but it just wasn't how the world works.

nugget 10y ago
In a 2009 bear's defense it was unprecedented Government intervention that lit the fuse under the markets and led us here. I remember reaching a point myself where I realized that policy was driving the markets more than any other factor and quit actively trading completely. You can be right but if the Feds take the other side of your trade you will be bragging about it to your fellow corpses in the graveyard.
- jonstokes 10y ago
  Yep. At the time, I was reminded of a quote from The Iliad, which I can't find anymore. It was something to the effect of, when the gods come down to earth to meddle in the affairs of mortals, the only ones who win are the ones whose side they take.
  - hammock 10y ago
    We everlasting gods . . . Ah what chilling blows we suffer—thanks to our own conflicting wills— whenever we show these mortal men some kindness.
- pfarnsworth 10y ago
  Agreed. I only wish I figured this out $75k or even $50k sooner :)
  - beamatronic 10y ago
    I feel a little bit better now.
- JumpCrisscross 10y ago
  > In a 2009 bear's defense it was unprecedented Government intervention The novel part was the purchase of government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities. The Fed's balance-sheet expansion, interest-rate regime and their effects on the market have precedent [1]. [1] http://www.hoover.org/sites/default/files/14110_-_bordo_-_exiting_from_low_interest_rates_to_normality_-_an_historical_perspective.pdf http://www.hoover.org/sites/default/files/14110_-_bordo_-_ex...

JumpCrisscross 10y ago

Reading ZH like Reddit will always turn out to be toxic. It isn't just the low signal-to-noise ratio. The site's core Austrian philosophy is at odds with the forefront of economic evidence. I skim it from time to time. Very quickly. If I see something interesting, I look look at the source. If it's credible, e.g. Reuters, I cautiously read. If it isn't, I research it. Once in a while I'll come across novel, credible sources this way. This is the No. 1 way to get value from ZH. The other time I read ZH is when I have a specific crisis on mind, e.g. Greece/Brazil/Venezuela shitting the pot. ZH throws up a good sense of how the bear market feels. Still terrible analysis. But good sentiment stock.

misja111 10y ago
'The site's core Austrian philosophy is at odds with the forefront of economic evidence.' Which evidence are you referring to? Would you mind sharing some of it?
- JumpCrisscross 10y ago
  A slightly technical read, but here you go: http://econfaculty.gmu.edu/bcaplan/whyaust.htm http://econfaculty.gmu.edu/bcaplan/whyaust.htm.
  - mangeletti 10y ago
    So, a link to conjecture from an associate professor at the PREEMINENT SCHOOL for studying Austrian School economics in the US... is evidence against Austrian school economics? Let me put it this way: there is a lot of financial incentive for Austrian School economics to appear "wrong", because Keynesian "economics" is really all about printing money and earmarking it for buddies within a given office's constituency. Austrian School economics can't really actually be wrong. It's primarily the study of basically common sense things that can be proven a priori, such as subjective value (if you like purple more than I do, a purple bike might be worth more to you than to me... can something like that really be proven wrong?) and ideas like allowing people to spend money as a means of expressing the value of a given good or service. The fact that there is an active movement within our government and its "education" system to apparently disprove such things is preposterous. But given the financial incentives, it's not surprising.

partiallypro 10y ago

ZeroHedge has a lot of shady things, and if you didn't know better you'd think the world was falling apart. That being said, their bearish view is pretty important when it gets confirmed by huge people. For instance, ZH has been beating the drums on high yield debt since summer of last year, then Icahn steps in and make similar comments and takes to task BlackRock CEO about their HY ETF being shady and the underlying market being illiquid. There hasn't been a high yield implosion, but a lot of people are betting there will be sometime in the near future. But maybe there won't be? Everything is a gamble, I've lost plenty of money being too early or too late. You can get decent trade ideas from ZH, but like you said, 95% of their items have to be taken with a grain of salt. The odd part is that most traders, professional traders, and some hedge fund managers frequent ZH and mostly agree on some of their doom scenarios; but the central banks pump the markets with so much money it's impossible to bet against the S&P. "Don't fight the Fed" is a slogan for a reason.

JumpCrisscross 10y ago
> ZH has been beating the drums on high yield debt since summer of last year So have John Mauldin, the New York Times's Dealbook, the Financial Times... There are better places to get your bear-market digest.
- scotch_drinker 10y ago
  John Mauldin and Worth Wray are two really strong voices for the high yield debt problem. I have learned an incredible amount from them and trust them far more than Zero Hedge on such topics. ZH is the frontline pulse but if you don't want to have to filter out 85% of the crap, Mauldin and Wray are excellent sources.

james1071 10y ago

Its click bait plus some useful info.