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I've had this same thought, but everyone seems to be sitting in cash? No one wants to invest unless everyone else invests. Seems the emperor is suddenly naked.

JumpCrisscross 4y ago
> everyone seems to be sitting in cash? What is this based on? Every indicator suggests we’re still in a risk-on mode as an economy. It’s why we have inflation.
- EGreg 4y ago
  Yield curve inverted and interest rates have begun to go up. Risk on?
  - JumpCrisscross 4y ago
    > curve inverted and interest rates have begun to go up. Risk on? Yes, we’re still seeing billions of dollars being deployed into start-ups [1], crypto and the like. We are less risk on than we were. But within America, there is no flight to safety. (Internationally, it’s more complicated.) [1] https://fortune.com/2022/04/08/venture-capitals-2022-slowdown-4-charts/amp/ https://fortune.com/2022/04/08/venture-capitals-2022-slowdow...
- baq 4y ago
  Don’t know which indicators you’re looking at, but the bond market disagrees.
gabereiser 4y ago
You should see the volume of the last 24 hours. No one is sitting on cash unless they are hobbyists.
- zmgsabst 4y ago
  That’s ironic. If you’d sold your S&P500 on Monday and bought back on Friday, you’d have gained 2.7 shares per 100 sold. If you’d sold your S&P500 a month prior and bought back on Friday, you’d have gained a 8 shares per 100 sold. If you’d sold your S&P500 six months prior and bought back on Friday, you’d have gained 14 shares per 100 sold.
  - gabereiser 4y ago
    You just described a hobbyist. Institutions don’t sit on cash for that long, nor do they buy S&P in any significance. [0] Berkshire Hathaway - https://www.dataroma.com/m/holdings.php?m=BRK https://www.dataroma.com/m/holdings.php?m=BRK
    - carnitine 4y ago
      Interesting that you cite BRK, who famously have been sitting on ~150bn in cash recently. Professional investors absolutely sit on cash all the time.
      - gabereiser 4y ago
        Yeah, they did, and within a month or two it was reinvested elsewhere. Whether it was pulling out of American Airlines in favor of more shares of Chevron, or doubling down on tech stocks. BRK doesn’t just sit on 150bn in cash for longer than they have to. Not saying they don’t sit on cash but they definitely don’t sit on it for a year or more.
      - gabereiser 4y ago
        Show me a hedge fund that sat on more than 1% of their holdings for more than a year. I’ll wait.
    - zmgsabst 4y ago
      Yes — I called it ironic because a hobbyist sitting on cash out performed the market over the past six months. Institutions “making moves” aren’t magic — and often fail to beat indexes, which in turn failed to beat cash over the past six months. Sometimes the hobbyist mindset wins.

JumpCrisscross 4y ago

> everyone seems to be sitting in cash? What is this based on? Every indicator suggests we’re still in a risk-on mode as an economy. It’s why we have inflation.

EGreg 4y ago
Yield curve inverted and interest rates have begun to go up. Risk on?
- JumpCrisscross 4y ago
  > curve inverted and interest rates have begun to go up. Risk on? Yes, we’re still seeing billions of dollars being deployed into start-ups [1], crypto and the like. We are less risk on than we were. But within America, there is no flight to safety. (Internationally, it’s more complicated.) [1] https://fortune.com/2022/04/08/venture-capitals-2022-slowdown-4-charts/amp/ https://fortune.com/2022/04/08/venture-capitals-2022-slowdow...
baq 4y ago
Don’t know which indicators you’re looking at, but the bond market disagrees.

gabereiser 4y ago

You should see the volume of the last 24 hours. No one is sitting on cash unless they are hobbyists.

zmgsabst 4y ago
That’s ironic. If you’d sold your S&P500 on Monday and bought back on Friday, you’d have gained 2.7 shares per 100 sold. If you’d sold your S&P500 a month prior and bought back on Friday, you’d have gained a 8 shares per 100 sold. If you’d sold your S&P500 six months prior and bought back on Friday, you’d have gained 14 shares per 100 sold.
- gabereiser 4y ago
  You just described a hobbyist. Institutions don’t sit on cash for that long, nor do they buy S&P in any significance. [0] Berkshire Hathaway - https://www.dataroma.com/m/holdings.php?m=BRK https://www.dataroma.com/m/holdings.php?m=BRK
  - carnitine 4y ago
    Interesting that you cite BRK, who famously have been sitting on ~150bn in cash recently. Professional investors absolutely sit on cash all the time.
    - gabereiser 4y ago
      Yeah, they did, and within a month or two it was reinvested elsewhere. Whether it was pulling out of American Airlines in favor of more shares of Chevron, or doubling down on tech stocks. BRK doesn’t just sit on 150bn in cash for longer than they have to. Not saying they don’t sit on cash but they definitely don’t sit on it for a year or more.
    - gabereiser 4y ago
      Show me a hedge fund that sat on more than 1% of their holdings for more than a year. I’ll wait.
  - zmgsabst 4y ago
    Yes — I called it ironic because a hobbyist sitting on cash out performed the market over the past six months. Institutions “making moves” aren’t magic — and often fail to beat indexes, which in turn failed to beat cash over the past six months. Sometimes the hobbyist mindset wins.