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"Manufacturers of luxury goods won't be mispriced in a way you can exploit, even after a stock market crash" Why not? I would expect luxury goods manufacturers

"Manufacturers of luxury goods won't be mispriced in a way you can exploit, even after a stock market crash" Why not? I would expect luxury goods manufacturers to suffer during a recession, and I would expect the stock price to follow suit. I don't think it's a mispricing as it's reflecting to reality on the ground, nevertheless I would expect them to bounce back after the recession. So it does seem to be an opportunity you can exploit. Your second paragraph seems to have shifted to a completely different asset class. No doubt there was fantastic prices on model aircraft kits, but you need to know the market, and it isn't apparent to me whether the model aircraft kit market will behave the same the next time. Plus it's more risky. If I buy a stock, I don't have to worry about it being fake, getting damaged, I can sell trivially at the touch of a button.

goatinaboat 7y ago
I would expect luxury goods manufacturers to suffer during a recession Well, you can look at say Rolex to see what happens. They suffered yes but they didn’t cut (list) prices because that would undermine their status. Instead they launched Tudor as the budget-Rolex brand and that seems to have worked OK (for the company anyway). Luxury goods manufacturers often have long histories and are able to look further ahead than a single economic cycle.
- benj111 7y ago
  List prices aren't stock prices the gg(?)p was talking about buying luxury goods stocks, not luxury goods themselves. Plus the 2nd hand market would be more relevant to what you're suggesting. Edit: Spelling
ThrustVectoring 7y ago
>So it does seem to be an opportunity you can exploit. There are effectively zero opportunities you can exploit by simply purchasing the stock of publicly traded companies. The probability that they bounce back after a recession is incorporated into the price, the professional investors and hedge funds you're trading against aren't idiots. >Your second paragraph seems to have shifted to a completely different asset class. No doubt there was fantastic prices on model aircraft kits, but you need to know the market, and it isn't apparent to me whether the model aircraft kit market will behave the same the next time. Plus it's more risky. If I buy a stock, I don't have to worry about it being fake, getting damaged, I can sell trivially at the touch of a button. The point isn't investing, it's to get the hobby gear you want at a good price. Any potential resale profit is very much a secondary concern.
- benj111 7y ago
  "the time to buy is when there's blood in the streets" Baron Rothschild People are human, they over react to bad news, they inflate bubbles, etc, etc. It isn't just hedge funds and professional investors you're up against, and even if you are, so? The average hedgefund bod will be thinking about the year end bonus, a stock that may bounce back in 18 months isnt of interest to them. And the higher ups don't want to end up bottom of the performance tables so they aren't going to keep it either. Then theres the fact that the efficient market hypothesis can only really deal with knowns. The depth of a recession is an open question, sure you can make an educated guess, but theres plenty of wiggle room to take a different view, or maybe I should say your differing view is a vote in setting the 'correct' price. And finally, I'm not entirely sure the efficient market hypothesis has even been proven, exhibit A) Long Blockchain https://www.bloomberg.com/news/articles/2017-12-21/crypto-craze-sees-long-island-iced-tea-rename-as-long-blockchain https://www.bloomberg.com/news/articles/2017-12-21/crypto-cr...

goatinaboat 7y ago

I would expect luxury goods manufacturers to suffer during a recession Well, you can look at say Rolex to see what happens. They suffered yes but they didn’t cut (list) prices because that would undermine their status. Instead they launched Tudor as the budget-Rolex brand and that seems to have worked OK (for the company anyway). Luxury goods manufacturers often have long histories and are able to look further ahead than a single economic cycle.

benj111 7y ago
List prices aren't stock prices the gg(?)p was talking about buying luxury goods stocks, not luxury goods themselves. Plus the 2nd hand market would be more relevant to what you're suggesting. Edit: Spelling

ThrustVectoring 7y ago

>So it does seem to be an opportunity you can exploit. There are effectively zero opportunities you can exploit by simply purchasing the stock of publicly traded companies. The probability that they bounce back after a recession is incorporated into the price, the professional investors and hedge funds you're trading against aren't idiots. >Your second paragraph seems to have shifted to a completely different asset class. No doubt there was fantastic prices on model aircraft kits, but you need to know the market, and it isn't apparent to me whether the model aircraft kit market will behave the same the next time. Plus it's more risky. If I buy a stock, I don't have to worry about it being fake, getting damaged, I can sell trivially at the touch of a button. The point isn't investing, it's to get the hobby gear you want at a good price. Any potential resale profit is very much a secondary concern.

benj111 7y ago
"the time to buy is when there's blood in the streets" Baron Rothschild People are human, they over react to bad news, they inflate bubbles, etc, etc. It isn't just hedge funds and professional investors you're up against, and even if you are, so? The average hedgefund bod will be thinking about the year end bonus, a stock that may bounce back in 18 months isnt of interest to them. And the higher ups don't want to end up bottom of the performance tables so they aren't going to keep it either. Then theres the fact that the efficient market hypothesis can only really deal with knowns. The depth of a recession is an open question, sure you can make an educated guess, but theres plenty of wiggle room to take a different view, or maybe I should say your differing view is a vote in setting the 'correct' price. And finally, I'm not entirely sure the efficient market hypothesis has even been proven, exhibit A) Long Blockchain https://www.bloomberg.com/news/articles/2017-12-21/crypto-craze-sees-long-island-iced-tea-rename-as-long-blockchain https://www.bloomberg.com/news/articles/2017-12-21/crypto-cr...