3 ms·

I was expecting to see discussions of something like a yield curve in this article, not the fashion sense of CEOs... Market timing is pretty much impossible fo

I was expecting to see discussions of something like a yield curve in this article, not the fashion sense of CEOs... Market timing is pretty much impossible for most people. So many people said we’re heading for a crash 3, 4, 5 years ago. They lost out on so many gains. We might crash tomorrow, or we might crash in 5 years. Nobody knows for sure. Market timing based on articles like this is a fool’s game. I’d really love these people who constantly predict the crash to also predict when the market will pick up, but of course they never do. They just keep predicting a crash and eventually get lucky. And we only remember the correct predictions. Why don’t they put their money where their mouth is and actually show us all that they’re investing according to their predictions as well...

starbugs 7y ago
In the current late stage of a cheap debt infused bull market it appears to be more sane to predict a crash and hence discourage people form investing in it altogether (or at least be extremely cautious) rather than speculating on where exactly the market top will occur. If you miss the timing of the crash all of these gains will have disappeared anyway. Downturns often happen too fast for normal people to react to in time to save their gains. It's most likely time to buy again directly after a crash or significant pullback has happened and valuations have come down to a more rational level. No one can predict a market under the current circumstances (federal reserves keeping rates artificially low, pumping new funny money into the market over a period of 5-10 years).
- scld 7y ago
  How is under-target inflation for a decade artificially low rates?
  - starbugs 7y ago
    Well, look at where the money has gone. It's now in the stock market and in real estate. Inflation is there, it just didn't trickle down into the CPI basket (yet).
  - C1sc0cat 7y ago
    Because it is not normal to have such a low yield on Guilts around 1% for ten year in the UK
- mrosett 7y ago
  > In the current late stage of a cheap debt infused bull market it appears to be more sane to predict a crash and hence discourage people form investing in it altogether (or at least be extremely cautious) rather than speculating on where exactly the market top will occur. People were making the same argument in 2012.
  - starbugs 7y ago
    And they were most likely right in 2012.
aserafini 7y ago
Exactly, unless the author of the article reveals his positions in the market it’s hard to take seriously. Not saying I disagree about the possibility of a bubble - but timeframes and magnitude matter - and talk is cheap. A public investment portfolio or asset allocation strategy is worth a 1000 Medium posts. Otherwise the prediction in the article amounts to ‘something will crash... at some point’. It’s really that generic.
StanislavPetrov 7y ago
It's not "market timing" to acknowledge that the longer we go without a crash the more likely that crash is to occur given the length of our current cycle (all other economic or fashion indicators aside). You shouldn't base your economic outlook based on "articles like this", but you should certainly consider the history of our boom/bust economy and how late we are in the cycle.
benj111 7y ago
Market timing may be impossible, you can still observe that it's getting irrational. Observe crypto currencies at the peak, people were talking nonsense that was never going to be true, and it was quite obviously a bubble. That irrationality just makes it harder to predict when the crash will come. Yield curve is a somewhat rational measure, bubbles aren't rational (from a financial perspective). BTW I was given 0.01 of these new fangled bitcoin years ago and promptly forgot about it. I sold in October before the crash. I make no claims to be any kind of investing expert, but I assume that counts as putting my money where my mouth is.
kinkora 7y ago
brings to mind the saying, "a broken clock is correct twice in a day"
subjectHarold 7y ago
Market timing isn't impossible. Salesman (and the academics hired by them) seem to have a powerful influence over the herd but timing is fairly straightforward...valuation and momentum. That is it. In addition, there are factors that predict future financial stress fairly well. Yield curve inversion is one, there are other more powerful ones. In my experience, retail investors get angry because there isn't someone telling them exactly what to do and when. It isn't that easy. Over the long-term, the market is extremely non-random. But over shorter periods, it is very unpredictable. Most people are unable to cope with that psychologically, and that is why the market continues to be so predictable (if you didn't have people thinking they just need to buy-and-hold, or whatever the idea de jour is, you wouldn't have anyone to sell to at the top and buy from at the bottom).

starbugs 7y ago

In the current late stage of a cheap debt infused bull market it appears to be more sane to predict a crash and hence discourage people form investing in it altogether (or at least be extremely cautious) rather than speculating on where exactly the market top will occur. If you miss the timing of the crash all of these gains will have disappeared anyway. Downturns often happen too fast for normal people to react to in time to save their gains. It's most likely time to buy again directly after a crash or significant pullback has happened and valuations have come down to a more rational level. No one can predict a market under the current circumstances (federal reserves keeping rates artificially low, pumping new funny money into the market over a period of 5-10 years).

scld 7y ago
How is under-target inflation for a decade artificially low rates?
- starbugs 7y ago
  Well, look at where the money has gone. It's now in the stock market and in real estate. Inflation is there, it just didn't trickle down into the CPI basket (yet).
- C1sc0cat 7y ago
  Because it is not normal to have such a low yield on Guilts around 1% for ten year in the UK
mrosett 7y ago
> In the current late stage of a cheap debt infused bull market it appears to be more sane to predict a crash and hence discourage people form investing in it altogether (or at least be extremely cautious) rather than speculating on where exactly the market top will occur. People were making the same argument in 2012.
- starbugs 7y ago
  And they were most likely right in 2012.

aserafini 7y ago

Exactly, unless the author of the article reveals his positions in the market it’s hard to take seriously. Not saying I disagree about the possibility of a bubble - but timeframes and magnitude matter - and talk is cheap. A public investment portfolio or asset allocation strategy is worth a 1000 Medium posts. Otherwise the prediction in the article amounts to ‘something will crash... at some point’. It’s really that generic.

StanislavPetrov 7y ago

It's not "market timing" to acknowledge that the longer we go without a crash the more likely that crash is to occur given the length of our current cycle (all other economic or fashion indicators aside). You shouldn't base your economic outlook based on "articles like this", but you should certainly consider the history of our boom/bust economy and how late we are in the cycle.

benj111 7y ago

Market timing may be impossible, you can still observe that it's getting irrational. Observe crypto currencies at the peak, people were talking nonsense that was never going to be true, and it was quite obviously a bubble. That irrationality just makes it harder to predict when the crash will come. Yield curve is a somewhat rational measure, bubbles aren't rational (from a financial perspective). BTW I was given 0.01 of these new fangled bitcoin years ago and promptly forgot about it. I sold in October before the crash. I make no claims to be any kind of investing expert, but I assume that counts as putting my money where my mouth is.

kinkora 7y ago

brings to mind the saying, "a broken clock is correct twice in a day"

subjectHarold 7y ago

Market timing isn't impossible. Salesman (and the academics hired by them) seem to have a powerful influence over the herd but timing is fairly straightforward...valuation and momentum. That is it. In addition, there are factors that predict future financial stress fairly well. Yield curve inversion is one, there are other more powerful ones. In my experience, retail investors get angry because there isn't someone telling them exactly what to do and when. It isn't that easy. Over the long-term, the market is extremely non-random. But over shorter periods, it is very unpredictable. Most people are unable to cope with that psychologically, and that is why the market continues to be so predictable (if you didn't have people thinking they just need to buy-and-hold, or whatever the idea de jour is, you wouldn't have anyone to sell to at the top and buy from at the bottom).