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Ask HN: What are you doing now to profit from the current or upcoming recession?

• theandrewbailey 4y ago
  I've kept my 401k investments the same. I still have a good 30 years before I have to sweat bullets about it. If money is still coming in during low points, I shouldn't have to be too concerned, unless I get laid off. I'm also stocking up on necessities; food in particular. Not only is there a recession, have you noticed how many crops weren't planted, and how much less fertilizer is being used? Livestock numbers are down, too. Famine is coming. > I see comments on HN once in a while about how they did [clever thing X] during a recession years ago and made money. Survivor bias. Most clever financial things/hacks lose money.
  • deleted 4y ago
    [deleted]
  • youainti 4y ago
    > Survivor bias. Most clever financial things/hacks lose money. Thanks for pointing this out. The other option is that the clever thing ties you up so you miss out on other opportunities.
• rvz 4y ago
  It maybe a bit late to enter in a short now over a potential reversal over the whole market slide. Perhaps it may reverse shortly up and then after another week or so it go down further. So I'd wait for it to reverse a bit first. I'd argue we were already in a 'recession' many months ago. [0] [0] https://news.ycombinator.com/item?id=29508238 https://news.ycombinator.com/item?id=29508238
• robcohen 4y ago
  Well, this isn’t a great plan, but I’m betting that the bottom will fall out at one point and crypto will crater hard. Until then, I’m taking my DCA (dollar cost average) funds and keeping them in Gemini and Abra Earn (50% each) and getting 7.15/7.5% return. When that happens, I’ll move quick to transfer my funds to whatever exchange has the most liquidity and I’ll pick either Ethereum or Cardano and spend half of my DCA money, then continue to buy more if anything drops 20% or more. I’ve done this twice before, and it’s worked pretty well so far. My DCA funds will likely be 5-10% of my net work at that point.
  • carabiner 4y ago
    Nice. I'm unemployed right now (by choice) with minimal savings, but if I was still working I'd definitely be buying right now via DCA or value cost averaging. I bought a lot when pandemic started, mostly S&P 500 and Norwegian Cruise Lines and profited a lot. Sold them after a year to avoid the short-term tax hit.
  • potatototoo99 4y ago
    In the event crypto craters hard, how likely are Gemini and Abra Earn not to go bankrupt if they're offering 7% returns guaranteed (I assume).
    • cheriot 4y ago
      This. Any time there's a rate of return above short term treasuries the question becomes, "what's the risky asset this is invested in?"
    • joemazerino 4y ago
      Celsius, anyone?
      • robcohen 4y ago
        It's not a risk-free bet, but considering it's not a signficant amount of my net worth I'm happy to take the chance for a multiple ROI.
• mikece 4y ago
  Improving my DevSecOps skills as folks who can sell themselves as doing the jobs of three people will be more attractive in the eyes of employers (even if it's really just the same dev job I've been doing all along).
  • mxuribe 4y ago
    Its funny this comment was more of what i was expecting to see here...but am seeing all this finance hustle and shuffle! :-D
• zenbryo 4y ago
  The statistical probability is a deep depression, the "k-wave" is about time to crash now in its fifth cycle. Making a profit is probably unlikely, but getting rid of all your personal debt and stocking up or investing in stuff people cant be without like food, medicine or energy might be a good bet.
• softcactus 4y ago
  Build up my savings to the point where I can live comfortably for 2+ years without a paycheck, or 4+ on a tight budget. DCA into ETFs with the leftovers. Buy a little bit more non-perishable food than I need every time I go to the store. Extra bag of beans and rice here and there. Also eating unhealthier than usual since I figure if there's a food shortage or energy shortage during the winter I'd rather be 15lbs overweight. Continue to learn skills that I think will be valuable in the future/will get me ahead of the average person in my field. I was a child in 2008 so I have never experienced a bad labor market, but I figure I just need to be more employable than average (if I am mistaken then that's what the 2+ years of savings are for). There is always money to be made and people will want to hire those with skills that can make them money. If tech is in a bubble then just being able to make CRUD apps wont land six figure salaries anymore. I'll need a good reason for someone to hire me.
  • karmakurtisaani 4y ago
    > Also eating unhealthier than usual since I figure if there's a food shortage or energy shortage during the winter I'd rather be 15lbs overweight. You might end up regretting this one.
    • softcactus 4y ago
      My weight fluctuates pretty normally depending on my exercise level. When I'm actively lifting weights I am in a calorie surplus and usually end up a bit overweight. Losing weight is fairly easy. You just count calories, avoid sugars, and eat high-fiber foods at the start of the meal to feel more full for longer. I recognize that 'gain weight for the winter famine' is a bit extreme but I'm just willing to gain 5 extra lbs than I normally would.
• johnyzee 4y ago
  If you are liquid, a good time to pick up some real estate will probably be in about a year's time. Around 2008, a typical property dropped to half its value, then doubled and tripled in the next five-six years. Just buy it and rent it out on a time limited contract while you wait for the property rebound.
  • rco8786 4y ago
    This makes a (pretty huge) assumption that the characteristics of this recession will match the last one. But the underlying fundamentals appear to be very different, so far.
    • PaulDavisThe1st 4y ago
      ... indeed, to the point where there is still debate about this actually is a recession. NBER, for example, have not yet called it (likely on account of the employment situation, which is very non-recession-like).
      • llampx 4y ago
        The Fed first claimed that there would be no inflation due to their COVID monetary policies and the fiscal policies of the government, then that it would be transitory. https://www.businessinsider.com/fed-keeps-key-rate-near-zero-sees-inflation-as-transitory-2021-4?utm_medium=ingest&utm_source=markets https://www.businessinsider.com/fed-keeps-key-rate-near-zero... Take what theses official mouthpieces say with a pinch of salt, because part of their box of tools is jawboning on TV. Fake it till you make it policymaking.
        • rco8786 4y ago
          This is why my original comment ended with "so far". In any case, we definitively do not have millions of people sitting on ARMs that just went from from 2% to 7% like we saw in '08.
  • imnotreallynew 4y ago
• UncleOxidant 4y ago
  Bonds have been pummeled this year - it's going to be time to buy some bond funds soon. Been buying 6-month to 2-year duration treasuries via treasurydirect.gov - 2yr is paying over 4% now. Yeah, that's less than inflation, but definitely way better than what I was getting in the bank. I was going to mention iBonds for an easy 9.6% return, but it's Sept 30 so too late for getting in on that if you haven't (EDIT: apparenlty you can still get in on it through October). Not sure about short ETFs at this point - not saying we've seen the bottom yet, but the market is already down a good bit this year. Keep some powder dry so you can pick up some good deals over the next 6 to 12 months (bonds and equities). Inflation tends to be sticky so it's quite possible that the Fed will have to raise rates more than their current target (which is something in the 5% range) - if that's the case then you'll probably want to lock in some longer term treasuries if they manage to get over 6% yield (not saying that's going to happen, but it seems like it could be a possibility and you'd want to be positioned to take advantage of that)
  • dom96 4y ago
    > Been buying 6-month to 2-year duration treasuries via treasurydirect.gov - 2yr is paying over 4% now Anyone know what the equivalent of this is in the UK?
    • DoingIsLearning 4y ago
      UK gilt is issued by HM Treasury you can buy it in the open market (most banks buy it all so you can never really buy from the Treasury directly). _Again_ buying gilt and buying an ETF that tracks gilt is not the same.
  • smaddox 4y ago
    Looks like the iBond rate applies through Oct, so not too late.
    • tylorr 4y ago
      You'll get a months worth of that rate but then it will change. Could go up or down.
• inerte 4y ago
  Doing the same as I ever did over the last 9 years since I moved to the US. Buying Vanguard funds, going index with 401k. My only recent addition was Fundrise 2 years ago.
• camnora 4y ago
  They say you shouldn't try to time the market, which is probably good advice. However, my approach is/was: - back in April, moved 401k fund from S&P allocation to cash equivalent (2% yield). Note: this wasn't a cash out, just reallocation. - Bought long-dated treasuries (10 yr and 30 yr). Allocated through July and August. This one is not doing well, but allocation was sized appropriately (< 2% of portfolio). - pooling any excess capital in a savings account until volatility calms down. - have a couple rentals and plan to continue holding. It will be interesting to see some buying opportunities in the upcoming year or two.
• deanmoriarty 4y ago
  I haven't been doing anything at all, beside some mechanical tax-loss harvesting. Suffered -21% YTD returns (~$800k lost on paper) on my 3-fund portfolio, which includes roughly 85/15 stocks/bonds. Thanks to new contributions my net worth since last year is "just" down -11%. I haven't increased the rate of my new contributions because I have always dumped all my savings in the market since forever, I never kept any "dry powder" for moments like these as I always thought it was too much opportunity cost. Actually, thinking about it, the rate of new contributions significantly decreased this year because a good chunk of my pay is in FAANG RSUs :-) It sucks, but I know I don't know anything and I can't risk timing the market and being double-slapped (first slap: taxes to liquidate the portfolio; second slap: not catching the market rebound, when/if it will happen). Again, it sucks when you think how much stuff I could have bought with the ~$800k I lost on paper. My parents, old-school folks, think I am completely insane and irrational for letting this happen, and they also though this in March 2020 when I didn't sell. I literally have my dad texting me every other day begging me to sell. But surprisingly you get used to it, and I do not think I would panic, nor change my plans, even if we go much lower from here.
  • boomchinolo78 4y ago
    Man, you're not one of those hopeless souls that "don't know anything and can't risk timing the market" your folks do seem to have a clue
    • deleted 4y ago
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    • ZoomerCretin 4y ago
      Timing the market is almost always a bad idea. If he had sold in March 2020, he almost certainly would not have bought back in until the market picked up again, losing out on a lot of market gains.
      • brad0 4y ago
        I think it's somewhat possible to time the markets given monetary policy. Monetary policy and stimulus during COVID caused a currency devaluation. If nothing else changes, the value of assets should increase, relative to a currency. The same thing happened with monetary policy in March 2022. Interest rates went up, stocks went down. I'm curious what others think.
• kypro 4y ago
  It's only ever clever in hindsight. It's possible the best move right now is to buy 3x levered NASDAQ ETFs. And in hindsight it will look genius and obvious - market is down, buy levered ETFs. But the fact the market is down so much and you're now thinking about shorting kinda explains why it's not easy. Also, bare in mind the only way to make money from a short position is to know when to sell - so how much further do you think markets will fall?
  • djbusby 4y ago
    Which ETF is that?
    • compumike 4y ago
      TQQQ is an example: https://totalrealreturns.com/s/TQQQ https://totalrealreturns.com/s/TQQQ I’m not recommending this. Be careful. It’s daily leverage (intended for short term use). If you look at it over longer periods, there is very very substantial drag. As a short term gamble with a single digit percentage of your portfolio, maybe. See also this article about risks of leveraged ETFs: https://www.bogleheads.org/wiki/Leveraged_and_inverse_ETFs https://www.bogleheads.org/wiki/Leveraged_and_inverse_ETFs Edit: here’s a chart comparing TQQQ to plain QQQ: https://totalrealreturns.com/s/TQQQ,QQQ https://totalrealreturns.com/s/TQQQ,QQQ
      • djbusby 4y ago
        Oh, I'm not buying it, am bogelhead. Still off this year but had cash around to "but the dip" as they say.
  • elteto 4y ago
    Leveraged ETFs are what I consider “pro” level financial instruments. If you don’t trade them for a living you are probably better off not trading them at all. It’s extremely common to misunderstand how the leverage works and think that “oh if I hold a -3x leveraged S&P500 ETF it will give me 3x if the index goes down”. It doesn’t work exactly like that because the time horizon where you hold it matters a lot. A lot of times you only realize that 3x if you trade in and out intraday.
• ManuelKiessling 4y ago
  Let my accumulating ETFs accumulate cheaper for a while.
• opportune 4y ago
  I also sold almost all my non-retirement stocks near the top and stopped purchasing more in mid 2021. I ignored the “timing the market” advice because it was obvious we were in an asset bubble and once inflation was in the mix, given low unemployment, the Fed mandate obviously pointed to interest rate hikes. I’d not purchase short ETFs unless you know what you are doing. They are not the same as your standard long ETF. They have to pay for the cost to borrow, likely have much higher management fees than eg Vanguard ETFs, and of course in the long run are not something you want to hold. You’d probably be better off holding short term treasuries (basically cash) hedged with some 1+y calls on broad market funds. If you want to buy back in sooner you could sell medium term puts. Or just lock in the gains you already made by purchasing now. Please please please before you buy a bond ETF recognize that it’s not the same as buying a bond. With a bond index you can lose money at mark-to-market that you’d only recoup after decades of interest or if we want back down to lower rates. While, in my opinion, the 1y outlook was clear 1y ago, it’s a lot less clear now. I don’t think anybody knows how high rates are going to have to go to stop inflation, the Fed timeline, and how bad a potential recession would be. An amicable end to the war in Ukraine could also fix the energy crisis quickly.
  • thunky 4y ago
    > I also sold almost all my non-retirement stocks near the top You're halfway there. Let us know when you get back in.
    • opportune 4y ago
      I’m personally planning on starting to buy back next week now that I am seeing so many retail investors interested in purchasing short ETFs. As I buy back in I hope to sell some puts with my cash In case you’re being snarky, it’s easy for me to “beat” the market now because I just have to buy back below like 5% off ATH. I also don’t think I can time the market any more, I (and many others actually) just saw a special macro opportunity during the end of the last bull run
      • thunky 4y ago
• jiggywiggy 4y ago
  I invested in shell big time corona times was down for stupid reasons went up 50%. Still paying off. Still a safe bet. Although not much growth expected.
• zmmmmm 4y ago
  First thing is stand back a little from the hype and don't buy 100% into whatever consensus that there is going to be a recession. We may be looking back in retrospect and picking "right now" as the bottom and you liquidated everything at the worst possible time.
• compumike 4y ago
  It is pretty hard to profit from short ETFs. The two you mentioned (SH, SQQQ) are pretty good destroyers of purchasing power: https://totalrealreturns.com/s/SH,SQQQ https://totalrealreturns.com/s/SH,SQQQ
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• tester756 4y ago
  I'm purchasing cheap stocks of two companies that went really down, but have (in my opinion) strong assets/capabilities that will get them to old prices or more within next: company 1: 2-3 years company 2: 2-5 years again.
• deleted 4y ago
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• glouwbug 4y ago
  Buy the dip
  • randerson 4y ago
    That is like trying to catch a falling knife right now.
    • glouwbug 4y ago
      If you're holding for 30 years what does it matter?
      • randerson 4y ago
        Unless this turns out to be the US's equivalent to Japan in 1990, you'll probably end up ahead either way. But you just may have missed the dip!
        • glouwbug 4y ago
          Even if this is the ninety's NIKKEI you just cut your losses and keep buying. The NIKKIE is up 200%+ since it's drop. There's always money to be made
• gmays 4y ago
  Last recession I made millions off real estate. Every $100k invested has grown 3-4X, but more importantly continues to return ~1.5% to 2% monthly in rent, plus offers significant depreciation expense at tax time. I doubt those conditions will ever happen again — I was lucky with timing. This recession I bought a significant portion of select ‘pandemic stocks’ I thought have good fundamentals after they dropped 70-90% earlier this year (I was already all in cash anticipating a recession). My hope is in ~3 years that investment will 3X when the market recovers. I wish I had better ideas on the next opportunity this recession, but by definition they will always be contrarian. My next big bet will likely be on myself with a startup, which I haven’t done in a decade.
  • robcohen 4y ago
    Which recession stocks did you pick?
    • gmays 4y ago
      - Affirm - Coinbase - Cloudflare - Netflix - Peloton - Roblox - Shopify - Snapchat - Snowflake - Unity Peloton is the only one I regret so far — seems to be a falling knife I tried to catch, but still have some hope they can offload the inventory, grow distribution through Amazon/retail and drive up subscription revenue. But seems increasingly unlikely.
      • carabiner 4y ago
        These are all closely correlated as tech stocks. It is probably very similar to a nasdaq index fund.
        • thiht 4y ago
          Not an expert at all but intuitively I had the same feeling as carabiner. Can someone explain the downvotes?
        • gmays 4y ago
          Not exactly. They are all tech stocks, but NASDAQ has large cap tech stocks, which 'only' saw a ~30% drop YTD in the index. The ones I invested in were growth stocks that saw particularly steep corrections of around 70-90% when I invested. My bet was that though they were overvalued, it was an overreaction that would on average get me a ~3X return in 3 years. So yes, they are similar, but IMO the similarity was an overreaction that was not based on fundamentals. As mentioned earlier, I'd make the same bet again now for all but Peloton. Keep in mind these are longer-term (3+ year) investments. If you watch the market, the wild swings (especially in these stocks) still tell us the market doesn't know how to value them. Back to the OP's question, to get any significant outsized return you often have to be contrarian AND right. I felt I knew enough about the fundamentals of these companies and the market that I had enough confidence to make the bet. Only time will tell.
• outside1234 4y ago
  So crazy that we are just all mutually agreeing there is a recession when it is not clear that there is going to be. Group psychology is just amazing like that. Don't time your investments - use asset allocation to decide what you invest in and then always just do what it says. So if your target allocation is 75% stocks and 25% bonds, just buy stocks and bonds in the appropriate mix with your savings to keep your ratio level. This tends to have you buy stocks when they are low and sell high by the nature of maintaining this ratio. Do this rebalancing twice a year. For most of this, this will mean just buying more of something to rebalance with the savings from the previous six months.
  • pb7 4y ago
    What is your criteria for whether we are in/not in a recession?
    • ceejayoz 4y ago
      There’s never been one coinciding with a full-employment unemployment rate. If this is a recession, it’s unusual.
      • pb7 4y ago
        Doesn’t unemployment follow a contraction in the economy? We’re seeing a lot of layoffs* right now because business has slowed down, and if other companies also have hiring freezes, those people will stay unemployed. *and it looks like just the beginning
        • ceejayoz 4y ago
          It's not typical to have rock-bottom unemployment and blowout monthly job numbers on the way into a recession, no. https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/is-us-in-a-recession-employment-unemployment.aspx https://www.shrm.org/resourcesandtools/hr-topics/talent-acqu... > Yet economists seem to agree that if the U.S. is in a recession, it's unlike any previous one. > "This is going to be about the most pleasant way to go through a recession," said Ron Hetrick, senior economist at Lightcast. "Employers are still starving to get employees. They were never able to hire them when they had so much demand. I absolutely believe this is not going to be the kind of pain that we usually associate with a recession, historically speaking."
• quickthrower2 4y ago
  Considering borrow AUD to finance a property in London in a FX play of sorts. I am keeping an eye out and if the GBP crashes more I might go ahead. The "hedge" might be, if it the GBP crashes even more after to live in the UK, and earn a remote salary. I am waiting longer for a deeper crash. If I miss the boat, that is fine (I would rather miss the boat than risk getting on a rocky boat). Weirdly, for us non-US tech people who haven't accumulated millions at FAANGs, finding a good remote job could be the best move. In tech, your "recession" is still better than our non-recession! Main thing is look after your health.... !
• rr888 4y ago
  It really depends a lot on how secure your job is, if you have a big mortgage etc. Shorting is really risky, in any bear market you get massive upswings that can really hurt.
  • noobly 4y ago
    You don't have to necessarily short to express bearish beliefs, right? LEAP options seem like a great way to articulate your financial predictions without being exposed to excess risk, but idk anything.
• baskethead 4y ago
  I've been short since November, and my portfolio is up about 100% YTD. I think the market is going to drop even further, 2008-2009 style, so I'm gearing up for that.
• asdev 4y ago
  ride out the recession and not waste time or lose money trying to time the market
  • Insanity 4y ago
    Same here. I guess it depends on how risk averse one is.
• User23 4y ago
  > Wondering if it might be worthwhile to invest in short ETFs like SH, SQQQ. Geared ETFs only maintain their benchmark intraday. They aren’t something you want to hold unless you really know what you’re doing.
• qbasic_forever 4y ago
  I read somewhere hedge funds are investing heavily in private prisons. Make of that what you will.
  • PaulDavisThe1st 4y ago
    Finally! They know we're going to soon start locking up white collar criminals with sentences commensurate with the financial value associated with their crimes. It will be a bonanza for the private prison industry! /s
• tomxor 4y ago
  Philosophical perspective: Should you? Energy is more expensive, food is more expensive, both due to real shortages. If we are going into a recession it makes it even more difficult to afford on average, a huge chunk of the population is going to struggle to eat, to keep warm, many will die. You want to figure out how to personally profit off the recession - further increasing the difficulty for others to get their share of the limited resources during - so should you? Unless you are intending to profit by providing some kind of intrinsic value to society which could improve the situation even indirectly, I'd say no, it's unethical to exploit this situation to extract wealth using financial tools.
  • joemazerino 4y ago
    Yes, you should.
    • kaskakokos 4y ago
      If you should, if your philosophy is to take advantage of the weakest, I hope you won't cry if in the not too distant future someone takes advantage of your weaknesses. Otherwise, your philosophy should be reviewed for being incoherent. And remember, kids, this strange gluttony that our civilization possesses is the cause of many of the world's problems.
  • robcohen 4y ago
    You should. Like it or not the world is finite with limited resources. There are winners and losers. If you want to help people, then win and start a scholarship or pay off someone's medical debt. No sense in suffering with everyone else when you were smart enough not to.
    • gmd63 4y ago
      The finance industry argues publicly that it's responsible for funding the sciences and the study of Old Nature while it builds an opaque jungle of New Nature in which it preys on other humans. When the "losers" wise up to what you claim and collectively want to kill you, who will the smart person be then? I'm not personally feeling that towards you, just illustrating a completely rational hypothetical response of a large group of someone you'd label suckers or losers.
• Arete314159 4y ago
  I'm planning to buy a lot of T-bills. Not treasury indices or funds: Actual T-Bills. A person might sell their holdings in like a TIPS fund when the general market crashes b/c they need liquidity. So you need the underlying treasury. And also put the max into series i bonds, currently at ~9%. If you're a couple, you can put $20k in now and $20k in January, all paying the CPI as the interest rate. I tried a few "clever" options positions this year, not with a lot of money. Even when I was right I still wasn't really able to capitalize on it, b/c you have to be right at the exact right time, not when your options expire or dwindle to worthlessness. It's a tricky game. Just keeping your powder dry and staying in cash and cash equivalents will see you doing well. Then in 2-3 years when real estate crashes, buy something.
• xupybd 4y ago
  I'm keeping up my regular purchases while the market is on sale. I intend to keep doing that for the next 30 years and am banking on none of this mattering in the long term.
• homethrowaway 4y ago
  I had a big bonus from my employer getting acquired, so I went and bought a house with cash rather than getting a mortgage and investing it. Sure, I might have lost out on potential returns in the long term, but if I invested it and the market immediately tanked I’d be out a bunch of money. With the house, no matter what happens to home values (or my employment), I’ve got a house. (Honestly after seeing what the markets have been doing lately, I’m glad I did.)
  • gaws 4y ago
    > I went and bought a house with cash rather than getting a mortgage and investing it How much was the bonus?
• pedalpete 4y ago
  The 3 thoughts I like to play with when thinking about investments are 1) don't try to time the market 2) be greedy when others are fearful 3) don't measure your portfolio based on the high water mark I didn't sell everything at the top, though I suspected a drop was coming, I just hodl (not just crypto, stocks too). I have confidence that the companies I stock in and the crypto I keep are in companies/projects that I want to see succeed, not just those that I think will provide the best return, though those two things often overlap. However, now is the time to be greedy, and I'm sure that time will continue for the next 12-18 months. Is this the bottom? Probably not, but it may be bottom enough. The last point is what I find interesting where everyone says they "lost 20%, 40%, etc etc" but I've never understood why they take the high water mark and not what the market "should" have been priced at. We are confident 2020/2021 were significant bubbles driven by monetary policy. So why would we consider the top of the bubble to be what our portfolios should have been valued at? I prefer to look at the price from 2019, and look at the return on investment from there, or earlier if you like. Compare where your portfolio is to had you been in cash or other investments. To me, this is the way to take the long view. Yes, you could have sold at the top, you didn't, so you never had that value. I find this mentality helps me keep an eye on the longer-term. YMMV
  • all2 4y ago
    I've been measuring my buy'n'hold portfolio in terms of total gain / time. Have I "lost" a bunch of money since the peak? Yes (most of my stocks are tech). Do I care about losses since the peak? No, that isn't how I measure value. I've taken a similar tack when determining the value I have in a vehicle for example (or the cost/location of an apartment relative to common commute destinations). Basically, the value of the thing is in the utility I get out of it, rather than what others would pay for it. My car, for example, gives me a huge amount of utility in terms of visiting family, friends, engaging in hobbies, traveling relatively unfettered, etc. If I had to value that utility I would compare what I can currently do with the closest conceivable alternatives. It makes for a fun spreadsheet puzzle, to be honest. The last time I dug in and did the math, it was for housing location and cost, commute distance and cost, and cost-of-time.
    • 4y ago
• simonswords82 4y ago
  Just sold 10% of my business for £1.1m. Sitting on it, waiting to see what the world does next
  • b20000 4y ago
    what kind of business?
    • simonswords82 4y ago
      Data management software for financial investment managers
• yuan43 4y ago
  The time to make a move into a bubble that has burst is when nobody cares anymore. CNBC has moved onto other things. Cramer has nothing to say. You can go for weeks without it even being a topic of regular conversation. All those house flipper programs have been canceled. When the former golden children come up in conversation, the most likely response is "that's still a thing?" I guarantee you won't want to buy that market because it looks dead and set to drop further. But it's really instructive to go back and look at charts for various assets after bubble implosions. There's plenty of time to get in after the Johnny-come-latelies have been margin called into oblivion and even the diamond hands have folded. The absolute worst time to make a move is during a downturn. Things tend to get extremely volatile on both the upside and downside. Everyone is excited. There's hope! Not a chance! Which way will it turn out? It keeps buyers and the faithful clinging to hope. Buy some time after they've capitulated and completely written off the market. Go back to those charts and notice that the strongest rallies happen in bear markets. Buy after the last bull has admitted defeat. My canary in that coal mine will be Tom Lee: https://www.cnbc.com/tom-lee/ https://www.cnbc.com/tom-lee/ When this perma-bull turns bearish, you'll know the waters are safe. To answer your question, I'm waiting. Waiting for stuff to get as boring as watching paint dry.
  • dogmatism 4y ago
    Man, with that theory, it's time to buy weed stocks!
    • ImprovedSilence 4y ago
      zomg, genius! I can't wait for Monday now.
  • vagab0nd 4y ago
    > But it's really instructive to go back and look at charts for various assets after bubble implosions. Be careful not to just look at assets that survived. There are plenty of things that people stopped caring, for a reason, which did not survive.
• senectus1 4y ago
  a friend of mine is all about buying gold. It feels like a safe thing to do. but tbh I'm a bit bewildered by the state of the world atm.I'm trying hard to not get into further debt and just keeping my head down.
  • sparrish 4y ago
    Most of those close to me are buying gold, silver for investments. Also guns and ammo, which are not bad investments (to be sold at a later time) but can also be used if things get weird. Me? I'm just trying to keep gas in my car.
    • carabiner 4y ago
      Everyone goes through a prepping phase. It's just a phase though.
  • b20000 4y ago
    gold has been dropping in price, so not sure what to think
    • senectus1 4y ago
      yeah my earlier mentions friend is also perplexed and puts it down to "people just not understanding how economics works". I'm inclined to agree... before trump I was beginning to see a picture of the world as being a lot less organized and professional than I was being led to believe.. Post Trump and I'm convinced that the world is and has always been an unhinged crazy town. I believe even less in conspiracy theory's than I used to (and I've always been a Occam's Razor sort of guy). There is no truly organized world order with a great plan... (to borrow from the meme) we're all just a bunch of smooth brains trying to fool each other that we're part of the wrinkled brain elites. Gold seems like a historically safe bet. thats as close to a plan as I'm going to get, otherwise yeah head down and keep on carrying on.
• austinjp 4y ago
  This is called "disaster capitalism". Why not choose a different path?
  • b20000 4y ago
    like what? work at a FAANG and enrich them?
    • austinjp 4y ago
      There's a huge number of options that aren't "be a disaster capitalist" or "work at a FAANG". HN et al are keen to "find a pain point" and iterate solutions. The pain point that millions of people are suffering with at the moment (specifically relating to OP's post) is the global economic down-turn. Plenty of opportunity to start a business that might actually help others. Personal budget management, debt consolidation, energy efficiency advice, etc etc etc.... How about trying to make the world a better place while turning a profit? How about "disaster philanthropy"? OP mentioned ETFs, a pooled investment that typically tracks an index, and specifically "short" ETFs. Shorting is basically gambling that a benchmark will fall in value, i.e. profiting from loss. There's plenty written by economists/politicos about whether this is ethical, whether it actually constitutes "disaster capitalism", and so on. Personally, I find it a shame that a global economic down-turn which will damage millions of lives prompts someone to think how they can use their existing money to make more money for themselves. I'm not advocating that OP should be negligent about their personal finances. I'm not suggesting that "insulating" themselves (as they quite understandably see it) is a bad plan. I would suggest that these things might be achieved by other means. My post was simply to say there are choices to be made.
• jp0d 4y ago
  Let me start by stating that I'm quite happy for all the wealthy people sharing their insights about finance and how they're planning to stay rich or cut losses during the upcoming recession. Bravo. I personally however am trying to do nothing. I'm 37 year old and I recently found out that I've high blood pressure and higher than normal cholesterol levels. I also came to know about the passing of a few individuals of similar age brackets in my inner circles. None of this will matter. Take care of your health. That's what I'm trying to do at this point. Exercise, enjoy a bit walk in the bush, go to beach this summer etc.. I think that's quite a profitable affair!
  • mbrodersen 4y ago
    Nothing stops you from looking after your health and your future financial situation. That’s what I do.
    • andreareina 4y ago
      The subtext here is that worrying about optimization can impact their health, especially with them maybe being in a more susceptible population.
      • jp0d 4y ago
        Aptly written. Yes, that's exactly what I meant. Thank you. @mbrodersen I don't disagree with you. But at this stage I'm just trying to be content with whatever I have. I like my job, hopefully that's not going to be impacted. Just trying to take a break from overthinking.
        • mbrodersen 4y ago
          I understand. But let me note that I spend maybe 1 hour a week looking after and optimising my long term investments. So it isn’t a time burden. The “one clever trick” is to invest 10% of your monthly income in long term investments (index funds for example) and reduce your living standards accordingly. Sacrificing a bit of the here and now for the future. As for health I have spent maybe 10 hours listening to many of the great talks on health by experts on YouTube (Low Carb Down Under for example) and adjusted my diet accordingly. And I spend 30 min a week improving my muscle mass (following the book “Body by Science”). So in summary it doesn’t have to take a lot of time to look after both your financials and your health.
• pmorici 4y ago
  Seems like the time to short the market was before it crashed. If your were lucky enough to have sold the top it’s probably time to start thinking about buying again.
• deleted 4y ago
  [deleted]
• balderdash 4y ago
  Sell cash covered puts at a strike price you would be willing to buy back into the market at.
  • nathanasmith 4y ago
    It's my luck with this play that I sell the puts with strikes right where I want to buy, the market dips, then bounces before expiration and I don't get assigned. I keep the premium but that's usually a pittance compared to what I could have made had I just bought the dip (that I wanted to buy anyway!). Of course when the price drops to your strikes you could use some extra cash to buy shares but then you're holding shares and the short puts at the same time so there's a trade off, i.e. you can't go all in on both. And you sure don't want to buy those puts back during the dip as they'd be hideously expensive and it'd obviously defeat the purpose of the original trade. This stuff is never easy.
• lamontcg 4y ago
  I wouldn't suggest investing in short ETF or buy puts or anything like that if you don't know what you're doing and don't have to ask me about it. In past tightening cycles the Fed has had to hold interest rates elevated for around a year before a recession set in. If that happens again then we may see a dead cat bounce over the 6-12 month time period and everything may recover. You could wind up shorting the market right at a medium term low. The fact that we're talking about doing that on HN could be a contrarian indicator that near term sentiment is way too pessimistic. I do strongly believe that we're not anywhere near the bottom yet since inflation is being driven by wage growth and the Fed has announced that they're going to increase unemployment. With unemployment still so historically low this is not the time to buy yet either. The roller coaster ride is going to get a lot lower, I just don't know what the exact path it is going to take to get there or exactly when the ETA is, so I can't see there's any useful way to trade it. You might be able to guess the correct path and just get lucky and have it work out, but you will be straight up gambling. You should know your exit strategy if you do that and understand what information coming in will make you abort your strategy if you recognize that reality isn't agreeing with your model in order to limit your losses.
• _8j50 4y ago
  I think all this recession talk is not good. Consumer confidence will affect recessions so planning for it like this makes it a certainty instead of a possibility. You should always have a risk averse financial plan, nothing happened as far as I know that requires a drastic change in financial planning by everyone.
  • BenGosub 4y ago
    There are some very alarming things going on, like the situation in Great Britain, where it's still not clear how bad it is. I am afraid that the same can happen to the euro, lose additional 30-50% buying power vs the Dollar and cause further wreckage in the financial system. Another thing to worry about is if the US will be able to rollover their debt at these elevated interest rates. The cost is becoming huge and the alternative is to inflate it. I think that in the short term the best position is cash and maybe some commodities, oil is a good entry after a few months of decline. I would definitely buy some Bitcoin and Ethereum, especially if Bitcoin goes sub 15K, but even if the bottom is in, I think some will be good for my portfolio. Stocks are an inflation hedge, especially value and utilities. I don't think it's still a good time for tech stocks, not until the situation with energy and interest rates improves. In terms of profiting from the crisis, if we get a crash sub 15K in BTC it might be the best multi year opportunity for entry. If you want to bet even bigger maybe buy another L1, since that one might go x25 when BTC goes x10.
• kirso 4y ago
  I am trying to build new skills by learning front-end / back-end dev. I don't know whether its ever going to be useful to me, but I really freaking enjoying it! Aside of that, I am also investing in understanding myself better and see what can be done in the next professional chapter to maximise free time and not the income. On the investment side, I am just keeping on buying ETFs but not looking at whats the value. Always on the lookout for new shifts and new markets appearing to potentially start exploring new topics and feeding the curiosity.
• swah 4y ago
  Honestly: trying to get a job that pays enough to let me save something.
• not_enoch_wise 4y ago
  Sell tickets to stoicism seminars.
• throwarayes 4y ago
  I'm always hedging against my current employer by having a public presence and building my personal brand. I don't need to be rich. But I want to have a job I like and work on interesting work. If my current employer has layoffs, my boss is bad, or I have to deal with some crappy situation - I'm always in a position to leave. I like to regularly interview (well really 'take calls/offer advice/talk to people') and get into the habit of advertising my skills. During a recession this is more important than ever...
• RickJWagner 4y ago
  Very encouraged to read all the Boglehead-type comments here. Kudos to you, Hacker News! Financial literacy is important.
• sershe 4y ago
  One thing I did that really, really didn't work is buying a lot of bond funds. Just buying a lot of individual bonds seemed too complicated, so I did that and apparently bond funds don't behave like bonds and just go down on sentiment... It's my biggest ever loss investing anything so far, and unlike stocks I suspect it won't go up very fast. Painful lesson, I now buy some bonds but only individually - i.e. treasuries or Goldman Sachs/Bank of America bonds on dips. Dunno much about bonds though, so I don't buy much. Another thing that didn't work out so well although on a much smaller scale are international funds. What's up with international funds, I don't know. Seems like whatever international things they are investing in have been going nowhere for the last 5 years, luckily I only have very little. I wish there was ELI5 somewhere about this. One of the things that worked surprisingly well in a sideways/down market is selling a cash-covered put ladder on SPY. I try to get $650-850 for a 3mo put, resulting in rather implausible strike prices. Unlike stock puts, where you can automatically catch a falling knife, I am not actually sure what the catch is with SPY, other than if it's the money you might need soon (i.e. you don't want to have to sell when you get assigned). I feel like, in the absolute worst case, you get assigned a lot and SPY tanks for a long time a-la Japan; that would be bad but most other investments you could have conceivably made, including just buying SPY, would do just as bad or worse. If OTOH we say buying SPY low is good, you basically only get assigned at big drops - it's automatic market timing (that also takes care of "oh noes it's going to hell I cannot buy now" mental block - I wish I this going during the COVID drop!). I got assigned once last year, I think around the dip in June, so it's still barely in the red, even after the horror show last month, compared to my buy-and-hold SPY purchases since then. OTOH if you don't get assigned you make 7-10% interest on cash used to cover, effectively (e.g. selling a 3mo SPY 335 put for $650). I also sell implausible 3mo calls on that SPY I got assigned, mostly because I have lots of index funds already via buying and holding so I don't care if it misses a huge market rally.