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There's also the saying though of "buy when there's blood in the streets, especially if it's your blood". All got to go up sometime. Just how much capital do yo

by piffey 7y ago

There's also the saying though of "buy when there's blood in the streets, especially if it's your blood". All got to go up sometime. Just how much capital do you have to wait out the drop?

Finnucane 7y ago
>All got to go up sometime. Why?
- whatshisface 7y ago
  We're not near any fundamental limits on growth. They exist, but the economy can get a lot bigger before it hits them. I have heard some really daft arguments about it ("the observable universe is finite!") and some less daft arguments ("resource shortages are more likely than asteroid mining within our lifetimes") but all of these predictions are for things a long time in the future.
  - Finnucane 7y ago
    Or even "our political economy is managed by corrupt morons who would rather see the world burn than deal with our actual problems."
  - reroute1 7y ago
    Just because you aren't at the limit doesn't mean that it will go up though
    - whatshisface 7y ago
      Yes, it does. All of the processes that have driven growth in the past are still working, and they will until they reach their limits. That's what it means for them to have limits. Why would people stop engaging in economic activity while it's still possible to do so?
      - blackflame7000 7y ago
        Because the markets are funded by people and people are irrational.
- ethanbond 7y ago
  Well, it doesn't really, but if it doesn't then it won't matter much where your money is.
  - justinmeiners 7y ago
    Japan has had stagnant stocks for decades and isn't in collapse.
- wsc981 7y ago
  I view it as such: do you believe we have achieved peak efficiency with regards to production of goods and providing services? If not, there’s room for the economy to grow. I am not an economist though, this is just my layman’s view.
  - jjeaff 7y ago
    The actual question is whether the market thinks that future efficiency gains are on the way or not. If the market does, then that efficiency is already priced in and you can't make any money off of it. What you actually have to figure out is: is there any unexpected future efficiency gains that the market doesn't expect. You have to know something that the market does not.
    - strbean 7y ago
      > The actual question is whether the market thinks that future efficiency gains are on the way or not. If the market does, then that efficiency is already priced in and you can't make any money off of it. Isn't this ignoring opportunity cost, uncertainty, etc.? If the expectation of future gains is priced in, wouldn't treasury bonds sell for face value + remaining interest on the secondary market?
      - outworlder 7y ago
        I guess they are assuming perfect knowledge.
        strbean 7y ago
        I'm sure all the players are acting rationally as well!
  - turc1656 7y ago
    This isn't quite true. I get what you're saying, but from a technical perspective, it's not accurate. The markets also go up based on the total money supply in the system. If the government takes on a lot of debt, eventually a portion of that makes its way to the stock market, among other places. You don't actually need to improve efficiency/productivity if the government has tools like the discount rate, open market operations, the ability to alter margin requirements on derivatives, fed funds rate, as well as programs and policies like MMIF, TAF, CPPF, ABCP, TALF, ZIRP, to manipulate the money supply and the velocity/flow rates of money.
- nightski 7y ago
  At the very least wouldn't inflation cause an upward trend even if small?
tbrock 7y ago
He’s not wrong but remember “the markets can remain irrational longer than you can remain solvent” -- ancient financial proverb
- ethbro 7y ago
  That was coined for investment capital that comes with a cost. E.g. (in its simplest) borrowing money to trade with, and then having to make regular payments to maintain your positions. Assuming you have no pressing needs for your invested capital (e.g. most retail investors), the market cannot actually stay irrational longer than you can remain solvent.
  - isignal 7y ago
    This is true for typical long positions but not for time based options. Some retail investors do buy those too.
    - turc1656 7y ago
      Time-based options have a fixed cost which you pay up front. So again, there is no risk of insolvency because you've already paid up front and capped your losses.
      - _lacan 7y ago
        Not if your strategy is to short the contracts instead of buying it.
Nuzzerino 7y ago
There's also the saying "Don't catch falling knives".
swsieber 7y ago
> All got to go up sometime Well, the companies that don't go bust.

by piffey 7y ago

There's also the saying though of "buy when there's blood in the streets, especially if it's your blood". All got to go up sometime. Just how much capital do you have to wait out the drop?

Finnucane 7y ago

>All got to go up sometime. Why?

whatshisface 7y ago
We're not near any fundamental limits on growth. They exist, but the economy can get a lot bigger before it hits them. I have heard some really daft arguments about it ("the observable universe is finite!") and some less daft arguments ("resource shortages are more likely than asteroid mining within our lifetimes") but all of these predictions are for things a long time in the future.
- Finnucane 7y ago
  Or even "our political economy is managed by corrupt morons who would rather see the world burn than deal with our actual problems."
- reroute1 7y ago
  Just because you aren't at the limit doesn't mean that it will go up though
  - whatshisface 7y ago
    Yes, it does. All of the processes that have driven growth in the past are still working, and they will until they reach their limits. That's what it means for them to have limits. Why would people stop engaging in economic activity while it's still possible to do so?
    - blackflame7000 7y ago
      Because the markets are funded by people and people are irrational.
ethanbond 7y ago
Well, it doesn't really, but if it doesn't then it won't matter much where your money is.
- justinmeiners 7y ago
  Japan has had stagnant stocks for decades and isn't in collapse.
wsc981 7y ago
I view it as such: do you believe we have achieved peak efficiency with regards to production of goods and providing services? If not, there’s room for the economy to grow. I am not an economist though, this is just my layman’s view.
- jjeaff 7y ago
  The actual question is whether the market thinks that future efficiency gains are on the way or not. If the market does, then that efficiency is already priced in and you can't make any money off of it. What you actually have to figure out is: is there any unexpected future efficiency gains that the market doesn't expect. You have to know something that the market does not.
  - strbean 7y ago
    > The actual question is whether the market thinks that future efficiency gains are on the way or not. If the market does, then that efficiency is already priced in and you can't make any money off of it. Isn't this ignoring opportunity cost, uncertainty, etc.? If the expectation of future gains is priced in, wouldn't treasury bonds sell for face value + remaining interest on the secondary market?
    - outworlder 7y ago
      I guess they are assuming perfect knowledge.
      - strbean 7y ago
        I'm sure all the players are acting rationally as well!
- turc1656 7y ago
  This isn't quite true. I get what you're saying, but from a technical perspective, it's not accurate. The markets also go up based on the total money supply in the system. If the government takes on a lot of debt, eventually a portion of that makes its way to the stock market, among other places. You don't actually need to improve efficiency/productivity if the government has tools like the discount rate, open market operations, the ability to alter margin requirements on derivatives, fed funds rate, as well as programs and policies like MMIF, TAF, CPPF, ABCP, TALF, ZIRP, to manipulate the money supply and the velocity/flow rates of money.
nightski 7y ago
At the very least wouldn't inflation cause an upward trend even if small?

tbrock 7y ago

He’s not wrong but remember “the markets can remain irrational longer than you can remain solvent” -- ancient financial proverb

ethbro 7y ago
That was coined for investment capital that comes with a cost. E.g. (in its simplest) borrowing money to trade with, and then having to make regular payments to maintain your positions. Assuming you have no pressing needs for your invested capital (e.g. most retail investors), the market cannot actually stay irrational longer than you can remain solvent.
- isignal 7y ago
  This is true for typical long positions but not for time based options. Some retail investors do buy those too.
  - turc1656 7y ago
    Time-based options have a fixed cost which you pay up front. So again, there is no risk of insolvency because you've already paid up front and capped your losses.
    - _lacan 7y ago
      Not if your strategy is to short the contracts instead of buying it.

Nuzzerino 7y ago

There's also the saying "Don't catch falling knives".

swsieber 7y ago

> All got to go up sometime Well, the companies that don't go bust.