7 ms·

"Be fearful when others are greedy, and greedy when others are fearful". Buy buy buy!!

by stuff4ben 4y ago

HWR_14 4y ago
The market's still not reset to 2020 levels.
- smolder 4y ago
  Adjusting for inflation? Looking at the djia right before the pandemic and now it's very close. Our money is certainly worth less.
  - spamizbad 4y ago
    On the upside our money buys significantly more crypto than it did a year ago.
    - smolder 4y ago
      It's unfortunate that people are convinced that cryptocurrencies are worth anything.
  - abduhl 4y ago
    Yes, but that’s just transitory.
Supermancho 4y ago
Become upside down on those buys for the next decade? I never understood the popularity of this blanket pablum, other than to sound edgy in a noise of bad news. You don't buy everything that dips every time it dips. Some companies will not survive long enough to bounce back. You also have the inflation eating away at theoretical, eventual, gains.
- ddorian43 4y ago
  The index will come back. SP500/QQQ.
  - School-Cotton 4y ago
    > The index will come back How do you know?
    - phillipcarter 4y ago
      They don't, but it's probably a decent estimate. This could also mark the fall of the USA, the entire world economy, and life as we know it on the planet. But I'd like to think that enough people are incentivized to not have any of that happen that it's a better bet to buy some stocks when they're low.
    - dahfizz 4y ago
      If the broad indices are down in the long term, then we are in an economic/society collapse scenario where small optimizations in investing strategy becomes completely meaningless.
      - School-Cotton 4y ago
        Japan's broad index was down for thirty years: https://www.theguardian.com/world/2019/dec/28/how-japan-has-fared-in-30-years-since-the-stock-market-bubble-burst https://www.theguardian.com/world/2019/dec/28/how-japan-has-... They continued being a highly-developed country throughout that period, with nothing that can be described as a "society collapse scenario".
    - orev 4y ago
      They don’t. But the typical response when you point this out is something like “if it doesn’t, then we have much bigger problems to worry about”, and then the conversation stops there. Nobody has a plan for this, or even seems to consider it, just like the “fact” that real estate could never go down (proven wrong in the last recession). That’s the point where joining a prepper group becomes the correct response, or at least a good hedge.
deleted 4y ago
[deleted]
OrangeMonkey 4y ago
We are hiking interest rates, investments into businesses are harder to achieve with VC staying aside, and consumer sentiment is falling daily. Look, sometimes when people are fearful there is a reason. Don't jump into a pool filled with razorblades because everyone is outside the pool pointing and screaming. I personally think we are in for a ride that will remind people that stocks are, in fact, risk assets. In both theme parks and finance, know the ride you are getting on.
- lumost 4y ago
  It’s interesting what happens when you look at an individual’s valuation through the lens of DCF as a function of interest rates. As an individual, your net present value diminishes as interest rates fall, and increases as they rise relative to a hypothetical growth stock. As is the case with any other productive asset. In order to fight inflation with higher rates, the fed may need to get interest rates high enough that people stop simply demanding more money from their employers, and start saving.
  - OrangeMonkey 4y ago
    Funny you say that - there is a horror show during inflation that we haven't hit yet (but could be close to): wage-price-spiral. "Things cost more" -> "Employees demand more money" -> "Businesses have to pay them more money." -> "Businesses raise prices" -> "Things cost more" -> repeat. The only way (besides war) that this cycle is broken is with a deep hitting recession where people are just happy they have jobs forget the raises.
    - lumost 4y ago
      I mean.. there is certainly room for profits to fall and productivity to rise in the current economy. Treating wage price dynamics as a zero-sum game does not seem like the correct approach
      - OrangeMonkey 4y ago
        It may not be the approach that fills us with glee, but its a historical approach. In all of history, when an economy has hit a wage-price spiral the only things that break this is war or a deep recession.
newaccount2021 4y ago
BitwiseFool 4y ago
I'll be greedy when others are in abject despair. Or in other words, I'm waiting on the sidelines for a while longer. Call me a doomer, but I believe the economic turbulence we are experiencing right now is just the beginning of a far more significant downturn.
- dalyons 4y ago
  Curious why do you think that though? It’s only dooming if there’s no reasoning behind the negativity :)
  - BitwiseFool 4y ago
    The major central banks of the world, The Federal Reserve, The European Central Bank, and the Bank of Japan all face the seemingly impossible task of trying to control inflation while simultaneously dealing with supply shortages and the downstream effects of sanctions against Russia. Because the US, EU, and Japan all have significant amounts of debt, the kind of interest rate hikes necessary to address the inflation would cripple their ability to borrow and service debt at the levels necessary to support their current level of deficit spending. So that will either lead to austerity, or pressure on the banks to keep interest rates lower than needed out of sheer necessity. Doing that would keep the governments solvent, but would allow inflation to run wild. I don't think the war is going to end anytime soon, so the odds of commodities going back to normal seems unlikely. Cynically, given the choice between default and having us plebeians lose value due to inflation and recession, our leaders will pick the latter. They won't choose to destroy their own government. To be clear, I don't think this is an economic apocalypse. I just foresee the most significant downturn of my lifetime on the horizon because we seem to be in a perfect storm of problems with solutions that are mutually exclusive.
    - dalyons 4y ago
      thank you for elaborating! Everything you say makes sense, and is hard to argue against. I guess i just disagree somewhat in the magnitude of these factors, im a bit more optimistic. I think its hard to imagine a bigger-than-2008 size collapse at present - i think demand destruction / recession will slow things down enough to avoid that kind of fall.
notsapiensatall 4y ago
"The market can remain irrational longer than you can remain solvent". Don't bet the farm this early in the cycle.
- orev 4y ago
  How early are we in the cycle? Nobody knows. One could point to the huge dip when Covid hit as the start of it, so two years isn’t long enough to wait? You’d have to be Nostradamus to know anything at this point. This is why DCA is the recommended strategy, as you never know when to go all in.
time_to_smile 4y ago
I can't tell if you're being sarcastic or not, but this advice comes from a period of 100 years of more or less constant global economic growth. This advice only holds if you maintain that such growth can be maintained in perpetuity. As we start to see more and more constraints on energy and resources globally, and realize that we're living in a world funded by debt we might not be able to pay, it's a fairly reasonable position that infinite growth is in fact not possible on a finite planet. The assumption that everything will always eventually go up is a pretty bold one and worth taking with a grain of salt.
- nonameiguess 4y ago
  That isn't true. The advice to buy is based on a belief in a high probability that, for the next 20-50 years, depending on your retirement horizon, a broadly diversified portfolio of highly liquid asset classes will appreciate relative to whatever legal tender currency you'd otherwise hold. Infinite growth in perpetuity is not required at all. As far as I know, if this proved to not be true, it would represent the first time ever since publicly-tradeable equity shares in private companies were invented. You're effectively saying you think the remainder of the 21st century will be worse for the industrialized west than all recent history, including a period of two world wars, the Spanish Flu epidemic, and the Great Depression all happening back to back to back to back. That is a fairly extraordinary claim that doesn't seem to be helped much by the fact that Earth will at some point hit a carrying capacity, which has always been true.
  - xyzzy123 4y ago
    More like the sum total of promises that've been made is greater than our collective capacity to deliver on them.
  - time_to_smile 4y ago
    > You're effectively saying you think the remainder of the 21st century will be worse for the industrialized west than all recent history Yes, that is exactly what I am saying. And there is ample evidence for this, despite HNs general refusal/inability to process this.
deleted 4y ago
[deleted]
greedo 4y ago
"Don't try to catch a falling knife."
RickJWagner 4y ago
Unlike Warren Buffet, I don't have an 'elephant gun' to take out of the closet. So maybe consider DCA'ing in. That way, if you happen to miss the bottom ('trying to catch a falling knife') you don't get burned so badly.

"Be fearful when others are greedy, and greedy when others are fearful". Buy buy buy!!

HWR_14 4y ago

The market's still not reset to 2020 levels.

smolder 4y ago
Adjusting for inflation? Looking at the djia right before the pandemic and now it's very close. Our money is certainly worth less.
- spamizbad 4y ago
  On the upside our money buys significantly more crypto than it did a year ago.
  - smolder 4y ago
    It's unfortunate that people are convinced that cryptocurrencies are worth anything.
- abduhl 4y ago
  Yes, but that’s just transitory.

Supermancho 4y ago

Become upside down on those buys for the next decade? I never understood the popularity of this blanket pablum, other than to sound edgy in a noise of bad news. You don't buy everything that dips every time it dips. Some companies will not survive long enough to bounce back. You also have the inflation eating away at theoretical, eventual, gains.

ddorian43 4y ago
The index will come back. SP500/QQQ.
- School-Cotton 4y ago
  > The index will come back How do you know?
  - phillipcarter 4y ago
    They don't, but it's probably a decent estimate. This could also mark the fall of the USA, the entire world economy, and life as we know it on the planet. But I'd like to think that enough people are incentivized to not have any of that happen that it's a better bet to buy some stocks when they're low.
  - dahfizz 4y ago
    If the broad indices are down in the long term, then we are in an economic/society collapse scenario where small optimizations in investing strategy becomes completely meaningless.
    - School-Cotton 4y ago
      Japan's broad index was down for thirty years: https://www.theguardian.com/world/2019/dec/28/how-japan-has-fared-in-30-years-since-the-stock-market-bubble-burst https://www.theguardian.com/world/2019/dec/28/how-japan-has-... They continued being a highly-developed country throughout that period, with nothing that can be described as a "society collapse scenario".
  - orev 4y ago
    They don’t. But the typical response when you point this out is something like “if it doesn’t, then we have much bigger problems to worry about”, and then the conversation stops there. Nobody has a plan for this, or even seems to consider it, just like the “fact” that real estate could never go down (proven wrong in the last recession). That’s the point where joining a prepper group becomes the correct response, or at least a good hedge.

deleted 4y ago

[deleted]

OrangeMonkey 4y ago

We are hiking interest rates, investments into businesses are harder to achieve with VC staying aside, and consumer sentiment is falling daily. Look, sometimes when people are fearful there is a reason. Don't jump into a pool filled with razorblades because everyone is outside the pool pointing and screaming. I personally think we are in for a ride that will remind people that stocks are, in fact, risk assets. In both theme parks and finance, know the ride you are getting on.

lumost 4y ago
It’s interesting what happens when you look at an individual’s valuation through the lens of DCF as a function of interest rates. As an individual, your net present value diminishes as interest rates fall, and increases as they rise relative to a hypothetical growth stock. As is the case with any other productive asset. In order to fight inflation with higher rates, the fed may need to get interest rates high enough that people stop simply demanding more money from their employers, and start saving.
- OrangeMonkey 4y ago
  Funny you say that - there is a horror show during inflation that we haven't hit yet (but could be close to): wage-price-spiral. "Things cost more" -> "Employees demand more money" -> "Businesses have to pay them more money." -> "Businesses raise prices" -> "Things cost more" -> repeat. The only way (besides war) that this cycle is broken is with a deep hitting recession where people are just happy they have jobs forget the raises.
  - lumost 4y ago
    I mean.. there is certainly room for profits to fall and productivity to rise in the current economy. Treating wage price dynamics as a zero-sum game does not seem like the correct approach
    - OrangeMonkey 4y ago
      It may not be the approach that fills us with glee, but its a historical approach. In all of history, when an economy has hit a wage-price spiral the only things that break this is war or a deep recession.

newaccount2021 4y ago

BitwiseFool 4y ago

I'll be greedy when others are in abject despair. Or in other words, I'm waiting on the sidelines for a while longer. Call me a doomer, but I believe the economic turbulence we are experiencing right now is just the beginning of a far more significant downturn.

dalyons 4y ago
Curious why do you think that though? It’s only dooming if there’s no reasoning behind the negativity :)
- BitwiseFool 4y ago
  The major central banks of the world, The Federal Reserve, The European Central Bank, and the Bank of Japan all face the seemingly impossible task of trying to control inflation while simultaneously dealing with supply shortages and the downstream effects of sanctions against Russia. Because the US, EU, and Japan all have significant amounts of debt, the kind of interest rate hikes necessary to address the inflation would cripple their ability to borrow and service debt at the levels necessary to support their current level of deficit spending. So that will either lead to austerity, or pressure on the banks to keep interest rates lower than needed out of sheer necessity. Doing that would keep the governments solvent, but would allow inflation to run wild. I don't think the war is going to end anytime soon, so the odds of commodities going back to normal seems unlikely. Cynically, given the choice between default and having us plebeians lose value due to inflation and recession, our leaders will pick the latter. They won't choose to destroy their own government. To be clear, I don't think this is an economic apocalypse. I just foresee the most significant downturn of my lifetime on the horizon because we seem to be in a perfect storm of problems with solutions that are mutually exclusive.
  - dalyons 4y ago
    thank you for elaborating! Everything you say makes sense, and is hard to argue against. I guess i just disagree somewhat in the magnitude of these factors, im a bit more optimistic. I think its hard to imagine a bigger-than-2008 size collapse at present - i think demand destruction / recession will slow things down enough to avoid that kind of fall.

notsapiensatall 4y ago

"The market can remain irrational longer than you can remain solvent". Don't bet the farm this early in the cycle.

orev 4y ago
How early are we in the cycle? Nobody knows. One could point to the huge dip when Covid hit as the start of it, so two years isn’t long enough to wait? You’d have to be Nostradamus to know anything at this point. This is why DCA is the recommended strategy, as you never know when to go all in.

time_to_smile 4y ago

I can't tell if you're being sarcastic or not, but this advice comes from a period of 100 years of more or less constant global economic growth. This advice only holds if you maintain that such growth can be maintained in perpetuity. As we start to see more and more constraints on energy and resources globally, and realize that we're living in a world funded by debt we might not be able to pay, it's a fairly reasonable position that infinite growth is in fact not possible on a finite planet. The assumption that everything will always eventually go up is a pretty bold one and worth taking with a grain of salt.

nonameiguess 4y ago
That isn't true. The advice to buy is based on a belief in a high probability that, for the next 20-50 years, depending on your retirement horizon, a broadly diversified portfolio of highly liquid asset classes will appreciate relative to whatever legal tender currency you'd otherwise hold. Infinite growth in perpetuity is not required at all. As far as I know, if this proved to not be true, it would represent the first time ever since publicly-tradeable equity shares in private companies were invented. You're effectively saying you think the remainder of the 21st century will be worse for the industrialized west than all recent history, including a period of two world wars, the Spanish Flu epidemic, and the Great Depression all happening back to back to back to back. That is a fairly extraordinary claim that doesn't seem to be helped much by the fact that Earth will at some point hit a carrying capacity, which has always been true.
- xyzzy123 4y ago
  More like the sum total of promises that've been made is greater than our collective capacity to deliver on them.
- time_to_smile 4y ago
  > You're effectively saying you think the remainder of the 21st century will be worse for the industrialized west than all recent history Yes, that is exactly what I am saying. And there is ample evidence for this, despite HNs general refusal/inability to process this.

deleted 4y ago

[deleted]

greedo 4y ago

"Don't try to catch a falling knife."

RickJWagner 4y ago

Unlike Warren Buffet, I don't have an 'elephant gun' to take out of the closet. So maybe consider DCA'ing in. That way, if you happen to miss the bottom ('trying to catch a falling knife') you don't get burned so badly.