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The old "the market can stay irrational longer than you can stay solvent" adage still holds true. But I would be surprised if this particular bubble lasts as lo

The old "the market can stay irrational longer than you can stay solvent" adage still holds true. But I would be surprised if this particular bubble lasts as long as Madoff's, since the facts are available for everyone to see, unlike Madoff's case.

6gvONxR4sf7o 6y ago
At what point do you throw your hands in the air and say that "the market can stay irrational longer than you can stay solvent" means "the market is irrational, mostly smoke and mirrors." Stocks seem to have little more intrinsic value than bitcoin over a long enough period as to make the difference silly. It's all speculation/gambling, not investment, as far as I can tell.
- dragontamer 6y ago
  Are you still getting a quarterly dividend at 3.25% APY from KO? (Coke) I think that KO stock you have might still be valued, and probably valued well. Just stay away from the stupid memes, and you'll find plenty of value. ------ Does the stock O still have a good dividend? Does O still follow the general trends of real-estate as expected? (Ex: O's assets are mostly houses in residential areas. O largely goes up when the housing market is good, and goes down when the housing market is bad). As such, O provides you with a low-cost way to expose yourself to the real-estate market without having to invest 6-figures to do so. That's plenty of value right there. Short-selling O, or buying call/put options on O can similarly provide more sophisticated financial instruments against the housing market. --------- I don't know what your expectations of the stock market are. But... a quarterly dividend from my dividend stocks + exposure to hard to enter markets are the main jobs of it for me. And I think its pretty good at both.
- lamontcg 6y ago
  This is the real fascinating thing to watch. There's more and more people who believe in this kind of nihilism that since there's corruption and bubbles in the real economy that it is entirely fiction. And that is giving rise to things like this crazy pumping of GME for the lulz. The trend seems to be that a larger fraction of people have complete disillusionment with all our institutions to the point where nothing matters. That also seems incredibly dangerous to me. By believing that institutions are meaningless and beyond reform that could lead to a much larger systemic collapse in institutions / values / etc.
  - runarberg 6y ago
    I think there is a difference between nihilism towards our society or existence and the feeling that the stock market is crap. The latter does not necessitate towards the former. I think the feeling that the stock market is crap is completely rational for the working public. And hoping for the destruction of it is normal given that the normal person has experienced nothing good coming from it; in fact the normal person sees the stock market as something that the rich use to get richer. Believing that the stock market is crap has nothing to do with our institutions beyond wall street† so it doesn’t necessitate towards this dangerous nihilism that you are so afraid of. In the current discord I see two avenues for this despair. 1. Susceptibility towards populism and fascism. This includes trumpism, and is indeed worrying. Minorities are blamed for all the inequalities even though this stems from wall street and the stock market being crap... (don’t ask me, I don’t understand the logic either). 2. Susceptibility towards socialism. The collapse of wall street is viewed as a favorable outcome in the current class war. The suffering of the Bourgeois is victory to be celebrated. † Well perhaps tangentially the institutions which favors wall street; such as the white house; but that despair translates more to “we should improve our democracy somwhat” rather then “we should abolish democracy”.
    - dragontamer 6y ago
      The Tesla Nevada Gigafactory, and all the jobs it entails, would not exist without the ability for the stock-market to raise billions of dollars. The banks were willing to offer Tesla ~$1.3 Billion IIRC, but the cost of the factory would be $5 Billion total. Furthermore, wages would have to be paid during the "rampup" period. I'd say "having a job at all" is a major advantage to the working public. All TSLA / Elon had to do was issue a secondary offering with a bit of hype to the public investors, and they shoved $Billions into the company, allowing it to expand. --------- You need to work on building cars for months, or even years, before a factory churns a profit. Where do you get the money for that? Well, the Stock Market is absolutely full of people who are willing to risk money (for the promises of more money). If you have a better plan for where a company can raise ~$4 Billion or so, please explain.
      - 6y ago
walexander 6y ago
I don't know why people call Madoff's scheme or Enron bubbles. People acted quite rationally given they believed these companies were not completely fabricating their accounting. Once it was found out what they were doing, the market acted rationally again, but dumping their value to zero.

6gvONxR4sf7o 6y ago

At what point do you throw your hands in the air and say that "the market can stay irrational longer than you can stay solvent" means "the market is irrational, mostly smoke and mirrors." Stocks seem to have little more intrinsic value than bitcoin over a long enough period as to make the difference silly. It's all speculation/gambling, not investment, as far as I can tell.

dragontamer 6y ago
Are you still getting a quarterly dividend at 3.25% APY from KO? (Coke) I think that KO stock you have might still be valued, and probably valued well. Just stay away from the stupid memes, and you'll find plenty of value. ------ Does the stock O still have a good dividend? Does O still follow the general trends of real-estate as expected? (Ex: O's assets are mostly houses in residential areas. O largely goes up when the housing market is good, and goes down when the housing market is bad). As such, O provides you with a low-cost way to expose yourself to the real-estate market without having to invest 6-figures to do so. That's plenty of value right there. Short-selling O, or buying call/put options on O can similarly provide more sophisticated financial instruments against the housing market. --------- I don't know what your expectations of the stock market are. But... a quarterly dividend from my dividend stocks + exposure to hard to enter markets are the main jobs of it for me. And I think its pretty good at both.
lamontcg 6y ago
This is the real fascinating thing to watch. There's more and more people who believe in this kind of nihilism that since there's corruption and bubbles in the real economy that it is entirely fiction. And that is giving rise to things like this crazy pumping of GME for the lulz. The trend seems to be that a larger fraction of people have complete disillusionment with all our institutions to the point where nothing matters. That also seems incredibly dangerous to me. By believing that institutions are meaningless and beyond reform that could lead to a much larger systemic collapse in institutions / values / etc.
- runarberg 6y ago
  I think there is a difference between nihilism towards our society or existence and the feeling that the stock market is crap. The latter does not necessitate towards the former. I think the feeling that the stock market is crap is completely rational for the working public. And hoping for the destruction of it is normal given that the normal person has experienced nothing good coming from it; in fact the normal person sees the stock market as something that the rich use to get richer. Believing that the stock market is crap has nothing to do with our institutions beyond wall street† so it doesn’t necessitate towards this dangerous nihilism that you are so afraid of. In the current discord I see two avenues for this despair. 1. Susceptibility towards populism and fascism. This includes trumpism, and is indeed worrying. Minorities are blamed for all the inequalities even though this stems from wall street and the stock market being crap... (don’t ask me, I don’t understand the logic either). 2. Susceptibility towards socialism. The collapse of wall street is viewed as a favorable outcome in the current class war. The suffering of the Bourgeois is victory to be celebrated. † Well perhaps tangentially the institutions which favors wall street; such as the white house; but that despair translates more to “we should improve our democracy somwhat” rather then “we should abolish democracy”.
  - dragontamer 6y ago
    The Tesla Nevada Gigafactory, and all the jobs it entails, would not exist without the ability for the stock-market to raise billions of dollars. The banks were willing to offer Tesla ~$1.3 Billion IIRC, but the cost of the factory would be $5 Billion total. Furthermore, wages would have to be paid during the "rampup" period. I'd say "having a job at all" is a major advantage to the working public. All TSLA / Elon had to do was issue a secondary offering with a bit of hype to the public investors, and they shoved $Billions into the company, allowing it to expand. --------- You need to work on building cars for months, or even years, before a factory churns a profit. Where do you get the money for that? Well, the Stock Market is absolutely full of people who are willing to risk money (for the promises of more money). If you have a better plan for where a company can raise ~$4 Billion or so, please explain.
    - 6y ago

walexander 6y ago

I don't know why people call Madoff's scheme or Enron bubbles. People acted quite rationally given they believed these companies were not completely fabricating their accounting. Once it was found out what they were doing, the market acted rationally again, but dumping their value to zero.