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I even heard it here that that’s it, recession is a sure thing. This or that indicator flipped and it’s all over. Heard people talk about it around town. I deba

by rdtsc 7y ago

I even heard it here that that’s it, recession is a sure thing. This or that indicator flipped and it’s all over. Heard people talk about it around town. I debated moving my retirement investments around even. But a voice in the back of my head was telling to not bother, since there is always someone saying the big crash is going to happen next week. And eventually it will happen, but probably not next week...

alexandercrohde 7y ago
yeah, the thing is NOBODY knows. If anybody ever knew the market was going down, they'd keep it a secret and short it. And if they KNEW it was going up they'd keep it secret and buy. A good thing to keep in mind while the "experts" are bombarding you with their theories.
- mycall 7y ago
  I invited NOBODY to my house yesterday to discuss this very situation. NOBODY told me there is secret and I should listen to NOBODY. So here I am.
gooseus 7y ago
Funny, I had the opposite voice in my head telling me I needed to definitely take my money out, even though I was sure at least a portion of the predictions about yield curves was hype and people making noise to get attention/clicks. My intuition seems to think that even if the market recover/gain some more in the near term, it's not going to go much further before hitting a correction/recession. In addition there is simply too much uncertainty around Brexit, Trump, Iran/Saudis, China/Hong Kong, climate-driven black swans, tech bubbles (e.g. AI, blockchain). I ended up taking money out at the end of July and am not sweating my decision, even though we've recovered about what we lost in August at this point. This shit is a house of cards, I don't have a problem missing out on marginal gains if it means avoiding a major crash.
- rolltiide 7y ago
  There is a bullish thesis for everything you described. Trump? Strongly suggesting that the US push yields lower, and the only tool it has to do that is by adding more money into the market. Fueling the nonstop 30-year bull market in treasuries and other government bonds, before fueling the excess capital flows into every other asset. Iran/Saudis? Epic Oil Boom Town of unprecedented proportions with coastal US and middle america being the primary recipients. Tech bubbles? A by product of excess money added to the markets, see the 'Trump' entry. China/Hong Kong? What? You gotta really re-evaluate how relevant that situation actually is. Everyone's had plenty of time to deleverage their exposure to that city, and nobody is going to get involved. The surrounding megacities in Guangzhou have all the output now. HK is 3% of China's GDP and has been functioning as an administrative convenience to circumvent customs duties, for years. Sorry about the people, it has nothing to do with the global markets. China itself is an accounting basket case though, but thats always been the case and not a new issue for your portfolio. Brexit? Britain's problem more than anybody else, people have had even longer to deleverage exposure there, and its a slow motion train wreck that the whole rest of the EU has already moved on from. Climate black swans? Well you got me there. The whole point of a black swan is something not being in the model. This is always true and not quantifiable, you either have the appetite or not.
  - gooseus 7y ago
    You make all good points and seem to have way more knowledge than I do on these points. I'm a complex systems person though, and it's the interactions between all these things which has spoiled my appetite. I'm not saying I'm right or that anyone should follow my lead, simply pointing out that these things, taken as a whole, makes the future seem very uncertain and leads me to side with the more cautious camp.
    - rolltiide 7y ago
      It's fair. I don't know what anybody is going to do. But lending hasn't dried up and interest rates will be lower than ever letting businesses roll over any maturing debt for some time. If people collectively decide to stop buying that stuff then yeah you'll get your crash, distressed companies, and massive layoffs. but with the European Central Bank starting up QEternity and the Federal Reserve about to start to QE4eva, they're going to be pumping all debt and holding it to maturity...
edoceo 7y ago
You don't have to make a dramatic move. If you're nervous maybe just move some capital from riskier vehicles to more stable. Got some upside from some stock? Maybe take that profit and move to a Cash type position. Diversity of Investment.
- phailhaus 7y ago
  That is still a somewhat dramatic move, since it constitutes a taxable event.
api 7y ago
Markets are feedback driven. If enough people believe there will be a recession there probably won't as the recession will already be priced in. If on the other hand everyone starts saying "it's different this time!" that means it's time to run for the hills and start stockpiling canned food and shotguns.
RickJWagner 7y ago
Exactly. Two pieces of advice, from investing great Jack Bogle: 1) "Nobody knows nothing." This means nobody can predict what's going to happen. Nobody. 2) Pick your asset allocation and "Stay the course". This means determine how much risk is appropriate for you, invest in an appropriate portfolio, and don't deviate from your plan. Follow these two (and maybe a few more), and prosper.

by rdtsc 7y ago

alexandercrohde 7y ago

yeah, the thing is NOBODY knows. If anybody ever knew the market was going down, they'd keep it a secret and short it. And if they KNEW it was going up they'd keep it secret and buy. A good thing to keep in mind while the "experts" are bombarding you with their theories.

mycall 7y ago
I invited NOBODY to my house yesterday to discuss this very situation. NOBODY told me there is secret and I should listen to NOBODY. So here I am.

gooseus 7y ago

Funny, I had the opposite voice in my head telling me I needed to definitely take my money out, even though I was sure at least a portion of the predictions about yield curves was hype and people making noise to get attention/clicks. My intuition seems to think that even if the market recover/gain some more in the near term, it's not going to go much further before hitting a correction/recession. In addition there is simply too much uncertainty around Brexit, Trump, Iran/Saudis, China/Hong Kong, climate-driven black swans, tech bubbles (e.g. AI, blockchain). I ended up taking money out at the end of July and am not sweating my decision, even though we've recovered about what we lost in August at this point. This shit is a house of cards, I don't have a problem missing out on marginal gains if it means avoiding a major crash.

rolltiide 7y ago
There is a bullish thesis for everything you described. Trump? Strongly suggesting that the US push yields lower, and the only tool it has to do that is by adding more money into the market. Fueling the nonstop 30-year bull market in treasuries and other government bonds, before fueling the excess capital flows into every other asset. Iran/Saudis? Epic Oil Boom Town of unprecedented proportions with coastal US and middle america being the primary recipients. Tech bubbles? A by product of excess money added to the markets, see the 'Trump' entry. China/Hong Kong? What? You gotta really re-evaluate how relevant that situation actually is. Everyone's had plenty of time to deleverage their exposure to that city, and nobody is going to get involved. The surrounding megacities in Guangzhou have all the output now. HK is 3% of China's GDP and has been functioning as an administrative convenience to circumvent customs duties, for years. Sorry about the people, it has nothing to do with the global markets. China itself is an accounting basket case though, but thats always been the case and not a new issue for your portfolio. Brexit? Britain's problem more than anybody else, people have had even longer to deleverage exposure there, and its a slow motion train wreck that the whole rest of the EU has already moved on from. Climate black swans? Well you got me there. The whole point of a black swan is something not being in the model. This is always true and not quantifiable, you either have the appetite or not.
- gooseus 7y ago
  You make all good points and seem to have way more knowledge than I do on these points. I'm a complex systems person though, and it's the interactions between all these things which has spoiled my appetite. I'm not saying I'm right or that anyone should follow my lead, simply pointing out that these things, taken as a whole, makes the future seem very uncertain and leads me to side with the more cautious camp.
  - rolltiide 7y ago
    It's fair. I don't know what anybody is going to do. But lending hasn't dried up and interest rates will be lower than ever letting businesses roll over any maturing debt for some time. If people collectively decide to stop buying that stuff then yeah you'll get your crash, distressed companies, and massive layoffs. but with the European Central Bank starting up QEternity and the Federal Reserve about to start to QE4eva, they're going to be pumping all debt and holding it to maturity...

edoceo 7y ago

You don't have to make a dramatic move. If you're nervous maybe just move some capital from riskier vehicles to more stable. Got some upside from some stock? Maybe take that profit and move to a Cash type position. Diversity of Investment.

phailhaus 7y ago
That is still a somewhat dramatic move, since it constitutes a taxable event.

api 7y ago

Markets are feedback driven. If enough people believe there will be a recession there probably won't as the recession will already be priced in. If on the other hand everyone starts saying "it's different this time!" that means it's time to run for the hills and start stockpiling canned food and shotguns.

RickJWagner 7y ago

Exactly. Two pieces of advice, from investing great Jack Bogle: 1) "Nobody knows nothing." This means nobody can predict what's going to happen. Nobody. 2) Pick your asset allocation and "Stay the course". This means determine how much risk is appropriate for you, invest in an appropriate portfolio, and don't deviate from your plan. Follow these two (and maybe a few more), and prosper.