4 ms·

When even sage of Omaha can’t find opportunities to invest it definitely hints towards a stock market crash or correction soon. For those of you that might need

When even sage of Omaha can’t find opportunities to invest it definitely hints towards a stock market crash or correction soon. For those of you that might need to cash out some money in the coming years (maybe when you get made redundant) I would definitely recommend to rebalance at least some of the portfolio into bonds. Stock market will likely outperform in a long enough time period but it might be too long for some.

soared 3y ago
This is true regardless of the article, people who need to cash out soon should make less risky investments. I won’t cash out for decades and would love a crash where I can buy cheaper stock :)
refulgentis 3y ago
The fundamental misalignment between the economy and commentary on it seems to be continuing. The top comment on an HN article about a 40% jump in profit for a business with $130,000,000,000 in the banks is directing people to prepare for a stock market crash.
- ramesh31 3y ago
  Nearly every blue chip company just posted historical record Q3 earnings, yet the market is in full on correction territory. We ceased to be coupled with it a long time ago.
  - s1artibartfast 3y ago
    The market price for goods and stocks depend on their alternatives.
    - refulgentis 3y ago
      Can you explain further how this relates to a projected stock market crash? (Other than ECO101 of 'if bonds go up stocks go down')
      - s1artibartfast 3y ago
        Do you have a specific question? 99% of it comes down to Econ101 and asking where the best return is expected. Edit: Berkshire Hathaway's largest position is apple. PE of 30, or 3.3% of value, and take on some risk. Alternatively, you can purchase bonds at a 5.3% rate, and basically no risk. You will put your money in bonds unless you have a hot tip about apple sales. You might even sell some of your apple stock to buy more bonds.
        refulgentis 3y ago
        If you're projecting a crash, I assume there's more to it than "bonds up stocks down". Is there?
        s1artibartfast 3y ago
        Depends on what you are calling a crash. I didn't make any specific claim, but I expect stocks to continue going down as long as bonds are high. Berkshire Hathaway's largest position is apple. PE of 30, or 3.3% of value, and take on some risk. Alternatively, you can purchase bonds at a 5.3% rate, and basically no risk. You will put your money in bonds unless you have a hot tip about apple sales. You might even sell some of your apple stock to buy more bonds. If apple stock dropped 30%, then it still would yield less than risk free bonds. Edit: Berkshire Hathaway earnings are up 40% because they are buying bonds, not selling more product.
  - refulgentis 3y ago
    Correction? I'm like maybe I missed something? Let's look at SPY, haven't done that in a month - 3% off ATH - up 25% YoY - up 2% MoM - up 5% WoW Shrug
    - ramesh31 3y ago
      >3% off ATH - up 25% YoY - up 2% MoM - up 5% WoW Take a look at the 6 month. We're at the top of a 5 day dead-cat from the last dip right now. I'd put SPY at 420 for 11/10 if I were a gambling man. Not saying we're headed for a "crash", but there is simply no case to be made for equities in the next 18 months if you are concerned with capital preservation.
deleted 3y ago
[deleted]
zooq_ai 3y ago
This is a bad guideline. Buffett never invested in MSFT, GOOG, AMZN, NVDA, META/FB, NFLX, TSLA and only very lately bought AAPL. Any early investor of these stocks would have beaten BRK Typically, growth stocks look expensive. Traditional 'Atom' companies had a limit to how much they can grow, while 'Bit' companies (I'm including AMZN, NVDA, AAPL here) seem to keep piercing the MAX frontier function. Buffett of course doesn't invest in companies that he has little expertise in. Rule of Investing : Build a model of the world and constantly update it with new information. Guidelines, Indicators, Correlations are meant to be broken. Build an internal LLM that include long-term successful investors from Buffett to Shkreli and people with integrity like Aswath
- Ekaros 3y ago
  On other hand take something like Cisco, which if you invested in 2000 would look like really really bad bed... It might be that today's Nvidia is Cisco from back then...
jlmorton 3y ago
An important point to be made here is that Berkshire's cash pile is not reported in real terms. Rates are pretty high, and cash sitting in US Treasuries are earning 5%. When you have $150 billion, that's $7 billion/year growth just in interest. But it's not actually $7 billion in real growth, it's mostly just inflated. Berkshire had $149 billion 2021. They have $157 billion today. That's actually a decrease in real terms.
takinola 3y ago
Correction: The sage of Omaha cannot find opportunities to invest at the scale required to be meaningful to his company. If you are reading HN, you are unlikely to be directing capital at this scale so YMMV.

soared 3y ago

This is true regardless of the article, people who need to cash out soon should make less risky investments. I won’t cash out for decades and would love a crash where I can buy cheaper stock :)

refulgentis 3y ago

The fundamental misalignment between the economy and commentary on it seems to be continuing. The top comment on an HN article about a 40% jump in profit for a business with $130,000,000,000 in the banks is directing people to prepare for a stock market crash.

ramesh31 3y ago
Nearly every blue chip company just posted historical record Q3 earnings, yet the market is in full on correction territory. We ceased to be coupled with it a long time ago.
- s1artibartfast 3y ago
  The market price for goods and stocks depend on their alternatives.
  - refulgentis 3y ago
    Can you explain further how this relates to a projected stock market crash? (Other than ECO101 of 'if bonds go up stocks go down')
    - s1artibartfast 3y ago
      Do you have a specific question? 99% of it comes down to Econ101 and asking where the best return is expected. Edit: Berkshire Hathaway's largest position is apple. PE of 30, or 3.3% of value, and take on some risk. Alternatively, you can purchase bonds at a 5.3% rate, and basically no risk. You will put your money in bonds unless you have a hot tip about apple sales. You might even sell some of your apple stock to buy more bonds.
      - refulgentis 3y ago
        If you're projecting a crash, I assume there's more to it than "bonds up stocks down". Is there?
        s1artibartfast 3y ago
        Depends on what you are calling a crash. I didn't make any specific claim, but I expect stocks to continue going down as long as bonds are high. Berkshire Hathaway's largest position is apple. PE of 30, or 3.3% of value, and take on some risk. Alternatively, you can purchase bonds at a 5.3% rate, and basically no risk. You will put your money in bonds unless you have a hot tip about apple sales. You might even sell some of your apple stock to buy more bonds. If apple stock dropped 30%, then it still would yield less than risk free bonds. Edit: Berkshire Hathaway earnings are up 40% because they are buying bonds, not selling more product.
- refulgentis 3y ago
  Correction? I'm like maybe I missed something? Let's look at SPY, haven't done that in a month - 3% off ATH - up 25% YoY - up 2% MoM - up 5% WoW Shrug
  - ramesh31 3y ago
    >3% off ATH - up 25% YoY - up 2% MoM - up 5% WoW Take a look at the 6 month. We're at the top of a 5 day dead-cat from the last dip right now. I'd put SPY at 420 for 11/10 if I were a gambling man. Not saying we're headed for a "crash", but there is simply no case to be made for equities in the next 18 months if you are concerned with capital preservation.

deleted 3y ago

[deleted]

zooq_ai 3y ago

This is a bad guideline. Buffett never invested in MSFT, GOOG, AMZN, NVDA, META/FB, NFLX, TSLA and only very lately bought AAPL. Any early investor of these stocks would have beaten BRK Typically, growth stocks look expensive. Traditional 'Atom' companies had a limit to how much they can grow, while 'Bit' companies (I'm including AMZN, NVDA, AAPL here) seem to keep piercing the MAX frontier function. Buffett of course doesn't invest in companies that he has little expertise in. Rule of Investing : Build a model of the world and constantly update it with new information. Guidelines, Indicators, Correlations are meant to be broken. Build an internal LLM that include long-term successful investors from Buffett to Shkreli and people with integrity like Aswath

Ekaros 3y ago
On other hand take something like Cisco, which if you invested in 2000 would look like really really bad bed... It might be that today's Nvidia is Cisco from back then...

jlmorton 3y ago

An important point to be made here is that Berkshire's cash pile is not reported in real terms. Rates are pretty high, and cash sitting in US Treasuries are earning 5%. When you have $150 billion, that's $7 billion/year growth just in interest. But it's not actually $7 billion in real growth, it's mostly just inflated. Berkshire had $149 billion 2021. They have $157 billion today. That's actually a decrease in real terms.

takinola 3y ago

Correction: The sage of Omaha cannot find opportunities to invest at the scale required to be meaningful to his company. If you are reading HN, you are unlikely to be directing capital at this scale so YMMV.