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Ask HN: What will make the market crash?
Been trying to get my head around what would make the market crash. Obviously no one knows before it happens but would be interesting to hear such a wide variety of knowledgable people what they believe will make it all come tumbling down.
- cimmanom 8y agoAnything that shakes investor confidence. A certain % of people stop thinking the market will continue to rise, so they start pulling their money out. That causes the market to start to drop, which shakes more people's confidence, and it snowballs.
- PaulHoule 8y agoIf I had to point out a specific danger is would be a rapid rise in interest rates. If the Fed decided that inflation was out of control they might raise interest rates quickly and that pretty much always tanks the market. Note that discounting that risk involves two things: (i) how likely it is that we will have an inflation spike and (ii) how hawkish you expect the Fed to be about it. Many many many people play that game.
- newfocogi 8y agoMacro-economically, a market crash is a signal that investors don't trust public companies to be revenue generating engines in the future. Small market corrections occur when other related assets or systems readjust, like housing markets or trade regulations. If anyone knows when or why the next crash is coming, they could make millions on that knowledge. Anything else is most likely just blindly throwing darts - someone will turn out to be correct but analyzing their reasons for the crash will be a classic case of survivorship bias. I think the market is relatively efficient in this aspect.
- angersock 8y agoMy money is the following: * Final demise of Moviepass, leads to "wait, losing on transactions and making it up on volume doesn't actually work" and scaring investors * Magic Leap dies because there's no way to recoup their investment at this point, scares off "Well, awesome tech will save the day" investors * Uber follows close behind, scares off "Well, breaking the law will save the day" money * Twitter finally dies because of lack of monetization strategies and general consumer backlash, may kick off general death of social media space. This is my rough guess for how it'll play out.
- yohann305 8y agoi'm surprised you didn't add cryptocurrencies in the mix