4 ms·

I have been thinking for the past few days that one thing that is being missed here is even that the few people who are viewed as "perma-bears" (John Hussman fo

I have been thinking for the past few days that one thing that is being missed here is even that the few people who are viewed as "perma-bears" (John Hussman for example) are in reality bulls in disguise; they are just being a little more picky about waiting for the right buying opportunity. But they're still planning to buy. As is everyone, and if you fully expect the market to recover no matter what happens then you're likely to buy whenever it dips even a little bit. Faith in the ability of the Fed to rescue whatever has gone wrong with capitalism has reached such levels that the bull market won't really end until people start to believe that things are so bad that even the fed cannot rescue them. So my question is, given that the bull market can't continue indefinitely, what would have to happen to convince people that the next dip is not just another buying opportunity?

bilkoo 8y ago
The stock market is not 'people', but rather composed mostly of institution money and their managers. And due to the short term and relative performance goals, if they want to keep their jobs or fund from withdrawal better escape the stampede before everyone else. As to your question though, people may think the Fed has little room for stimulus this time around.
mooreds 8y ago
> the bull market can't continue indefinitely The question is, is GDP growth always going to trend upward, or will it trend downward at some point in the future. If the former, the bull market (with some crashes) can continue. If the latter, then nope. The stock market isn't the economy, but it certainly is a distorted reflection of the economy. Look at the factors of production: * land: not building any more of it (except the Chinese in the South China Sea :) ). Unless space travel becomes economical, then there's a ton of "land" available in terms of satellite habitats, the moon, etc. * labor: human population looking to peak in 2050 last I checked. Not sure how climate change will affect this (could be a strong negative in 100 years). * capital: lots and lots of capital and more efficient ways for it to move around the world. * energy: fracking + renewables have changed the game and the west is far more able to control their energy supply than in the past (see "The Absent Superpower") * intangibles (ideas, patents, etc). Lots of room to run here. The internet + youtube + google has made the cost of distribution close to zero. This means that new ideas (both inane, like dance fads, and useful, like new ways to organize teams) can spread far more quickly than in the past. (see "Capitalism without Capital") I'm voting yes, the bull market will continue indefinitely. I'm long the human race :) .

bilkoo 8y ago

The stock market is not 'people', but rather composed mostly of institution money and their managers. And due to the short term and relative performance goals, if they want to keep their jobs or fund from withdrawal better escape the stampede before everyone else. As to your question though, people may think the Fed has little room for stimulus this time around.

mooreds 8y ago

> the bull market can't continue indefinitely The question is, is GDP growth always going to trend upward, or will it trend downward at some point in the future. If the former, the bull market (with some crashes) can continue. If the latter, then nope. The stock market isn't the economy, but it certainly is a distorted reflection of the economy. Look at the factors of production: * land: not building any more of it (except the Chinese in the South China Sea :) ). Unless space travel becomes economical, then there's a ton of "land" available in terms of satellite habitats, the moon, etc. * labor: human population looking to peak in 2050 last I checked. Not sure how climate change will affect this (could be a strong negative in 100 years). * capital: lots and lots of capital and more efficient ways for it to move around the world. * energy: fracking + renewables have changed the game and the west is far more able to control their energy supply than in the past (see "The Absent Superpower") * intangibles (ideas, patents, etc). Lots of room to run here. The internet + youtube + google has made the cost of distribution close to zero. This means that new ideas (both inane, like dance fads, and useful, like new ways to organize teams) can spread far more quickly than in the past. (see "Capitalism without Capital") I'm voting yes, the bull market will continue indefinitely. I'm long the human race :) .