4 ms·

If all the homes in your neighborhood are overpriced people will simply not buy them, and others who are less price sensitive will. It’s very difficult to “mak

If all the homes in your neighborhood are overpriced people will simply not buy them, and others who are less price sensitive will. It’s very difficult to “make a killing” off overpriced equities. Even lay analysts who read financial reports know most marketable securities in the US are overpriced. The ones that aren’t simply aren’t attractive investments. Go peruse a few hundred US companies and read their financials. Tons of unattractive investments available today.

kqr 4y ago
Alternatives for dealing with overpriced stocks are abundant: shorting, options, index futures, etc.
- cj 4y ago
  In the parent's example, "shorting" the overpriced neighborhood may never produce a return since overpriced houses can remain overpriced for a very long time (decades).
  - kqr 4y ago
    This is basically saying "it's not overpriced if enough people believe it to be the correct price" which yeah, sure. In that case it's impossible to make money on most overpriced asset classes (other than those you can make yourself).
  - jandrese 4y ago
    Seems like they can stay overpriced for as long as there is no better place to put the money.
    - glofish 4y ago
      then it wasn't overpriced no? Overpriced means that you can get it for cheaper.
- csa 4y ago
  > Alternatives for dealing with overpriced stocks are abundant: shorting, options, index futures, etc. All of these either have a timing component or some sort of a penalty for holding them when the market increases, even if just temporarily. There is no downside equivalent of blindly DCA buying and holding a broad basket of stocks (like index funds).
losteric 4y ago
What can a (US) layperson invest in if all marketable securities are overpriced?
- throw0101a 4y ago
  > What can a (US) layperson invest in if all marketable securities are overpriced? Just buy the S&P 500 or a total market (Russell 3000) fund and let The Market™ sort it out. Putting a little away every month will generally work out over the long-term (at least of retirement goals): * https://ofdollarsanddata.com/just-keep-buying/ https://ofdollarsanddata.com/just-keep-buying/
  - dadoge 4y ago
    The literal point of the article is that too many people dollar cost averaging is why we have a bubble
    - throw0101c 4y ago
      > The literal point of the article is that too many people dollar cost averaging is why we have a bubble Yes, I know. I've been hearing Burry make rumblings on this since 2019. But if Burry is wrong and there is no bubble (with no eventual popping), then by sitting on the sidelines waiting for the (never-to-come pop) you're costing yourself returns: * https://ofdollarsanddata.com/the-cost-of-waiting/ https://ofdollarsanddata.com/the-cost-of-waiting/ * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... And even if there is a bubble, investing and staying invested, will also generally work out fine over the long term: * https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ https://awealthofcommonsense.com/2014/02/worlds-worst-market...
- csa 4y ago
  The options have decreased dramatically since 2008, since cheap money has pretty much caused all asset classes to have inflated prices. The best course is/was to start your own business and sell it, since the investment market has/had deep pockets and is looking for alpha above a relatively low benchmark anywhere it can find it. Real estate was really good for a while (until 2011-2012 or so), but that is back to not being so good today. Note that PE started getting into residential real estate, so that squeezed out a lot of opportunities in that market that used to be easier to access. My tack has been: 1. Invest in things into which I have unique insights. These aren’t that common, and they are not always easy to access, but they exist. 2. I am holding a lot of cash and waiting for things to correct. 3. I am also building businesses and funding others to do so. I am not a financial advisor, I am not your financial advisor, and this is not financial advice.

kqr 4y ago

Alternatives for dealing with overpriced stocks are abundant: shorting, options, index futures, etc.

cj 4y ago
In the parent's example, "shorting" the overpriced neighborhood may never produce a return since overpriced houses can remain overpriced for a very long time (decades).
- kqr 4y ago
  This is basically saying "it's not overpriced if enough people believe it to be the correct price" which yeah, sure. In that case it's impossible to make money on most overpriced asset classes (other than those you can make yourself).
- jandrese 4y ago
  Seems like they can stay overpriced for as long as there is no better place to put the money.
  - glofish 4y ago
    then it wasn't overpriced no? Overpriced means that you can get it for cheaper.
csa 4y ago
> Alternatives for dealing with overpriced stocks are abundant: shorting, options, index futures, etc. All of these either have a timing component or some sort of a penalty for holding them when the market increases, even if just temporarily. There is no downside equivalent of blindly DCA buying and holding a broad basket of stocks (like index funds).

losteric 4y ago

What can a (US) layperson invest in if all marketable securities are overpriced?

throw0101a 4y ago
> What can a (US) layperson invest in if all marketable securities are overpriced? Just buy the S&P 500 or a total market (Russell 3000) fund and let The Market™ sort it out. Putting a little away every month will generally work out over the long-term (at least of retirement goals): * https://ofdollarsanddata.com/just-keep-buying/ https://ofdollarsanddata.com/just-keep-buying/
- dadoge 4y ago
  The literal point of the article is that too many people dollar cost averaging is why we have a bubble
  - throw0101c 4y ago
    > The literal point of the article is that too many people dollar cost averaging is why we have a bubble Yes, I know. I've been hearing Burry make rumblings on this since 2019. But if Burry is wrong and there is no bubble (with no eventual popping), then by sitting on the sidelines waiting for the (never-to-come pop) you're costing yourself returns: * https://ofdollarsanddata.com/the-cost-of-waiting/ https://ofdollarsanddata.com/the-cost-of-waiting/ * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... And even if there is a bubble, investing and staying invested, will also generally work out fine over the long term: * https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ https://awealthofcommonsense.com/2014/02/worlds-worst-market...
csa 4y ago
The options have decreased dramatically since 2008, since cheap money has pretty much caused all asset classes to have inflated prices. The best course is/was to start your own business and sell it, since the investment market has/had deep pockets and is looking for alpha above a relatively low benchmark anywhere it can find it. Real estate was really good for a while (until 2011-2012 or so), but that is back to not being so good today. Note that PE started getting into residential real estate, so that squeezed out a lot of opportunities in that market that used to be easier to access. My tack has been: 1. Invest in things into which I have unique insights. These aren’t that common, and they are not always easy to access, but they exist. 2. I am holding a lot of cash and waiting for things to correct. 3. I am also building businesses and funding others to do so. I am not a financial advisor, I am not your financial advisor, and this is not financial advice.