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Weird that you mention the stock market and then conclude that there are only two outcomes: bust or success. If anyone can learn anything from the stock market

by pigpop 5mo ago

Weird that you mention the stock market and then conclude that there are only two outcomes: bust or success. If anyone can learn anything from the stock market it's that boom and bust are cycles that oscillate around a trend and everything tends to revert toward longer term trajectories. So, yes everyone is caught up with and overhyping AI and yes there will be a bust after the boom at some indeterminate point but that isn't the end of the story and we'll see a rise and further oscillation afterwards while we get better at applying the technology.

ufish235 5mo ago
Yes and my partners father has been calling for a bust for the last decade and everything has simply taken off.
- Muromec 5mo ago
  I don't see any taking off actually
  - warumdarum 5mo ago
    I think in a way we have seen a take off, by detaching the hype bubble from success metrics. Companies making products being bought by companies making products, that are hyped by machines, bought bymachines and evaluated for viability by machines. If economy is to hack the API of VC this has taken off! For now.
  - dmoy 5mo ago
    I think they meant the stock market more generally? S&P 500 is up what, like 4x in the last 10 years?
    - Muromec 5mo ago
      If I would drink 4x more beer that would concerning, but the number going up 4x should make things better how exactly?
      - ludwik 5mo ago
        This was said in the context of a person predicting a stock market bust, so of course a stock market index price is the relevant number here.
        Muromec 5mo ago
        Yeah, fair. I still can't shake off the nagging feeling most of it being a scam somehow and not the business as usual scam. The gut feeling that things proclaimed and observed don't add up.
    - tardedmeme 5mo ago
      That's just inflation, which is primarily controlled by the government via the money supply. It doesn't mean anything. What does mean something is the severe deflation in wages and consumer goods - why is all the money printing remaining in the rich person's realm instead of trickling down?
      - Muromec 5mo ago
        Peasants aren't picking up enough shit after the rich to distill traces of gold from it, that's why
      - dmoy 5mo ago
        Inflation is not up 4x in the last 10 years...
        tardedmeme 5mo ago
        Depends what you measure. I already said it hasn't been affecting wages or consumer goods and that's weird.
        dmoy 5mo ago
        Very, very few things even in isolation have inflated 4x in the last 10 years. But as for this > why is all the money printing remaining in the rich person's realm instead of trickling down? Always has been, it's kinda one of the defining features of capitalism
        tardedmeme 5mo ago
        > Very, very few things even in isolation have inflated 4x in the last 10 years. The assets in the S&P 500 have, that's what was brought up.
        dmoy 5mo ago
        Right, but that's a separate thing from inflation, so I don't think you can describe it as "that's just inflation".
- code_biologist 5mo ago
  As a bear that's been very confused by markets failing to exhibit mean reversion in 2019 and 2022, and now with the Hormuz energy crisis, I've thought a lot about this. There's a lot of new things happening. Fed/QE intervention that has never stopped, just been more well disguised. Fiscal/government spend intervention. I think Mike Green's work on the rise of passive investing is really good, in particular explaining how it prevents mean reversion in absence of changing net cash flows into passive instruments. Passive will also induce or worsen the bust if net cash ever starts to flow out passive. Green's youtube interviews are great. All to say, your SO's dad would have been right at any point prior to the current financial cycle. Knowing what's changed doesn't make forecasting easier though.
kalkin 5mo ago
I mean, there's a reason I started with a distancing phrase about a "reasonable argument"; I think what I'm suggesting is an interesting lens but does not capture the whole picture. But also, even if bust is business as usual in the big picture and not a social disaster long term, it's of course not what individual investors want for their particular current investments.
slumberlust 5mo ago
You're describing the Gartner cycle: https://en.wikipedia.org/wiki/Gartner_hype_cycle https://en.wikipedia.org/wiki/Gartner_hype_cycle
- chatmasta 5mo ago
  No, he’s describing the Business Cycle, with literature about it predating Gartner by a few centuries: https://en.wikipedia.org/wiki/Business_cycle https://en.wikipedia.org/wiki/Business_cycle
uncivilized 5mo ago
Your comment and the parent comment are not in disagreement.

by pigpop 5mo ago

ufish235 5mo ago

Yes and my partners father has been calling for a bust for the last decade and everything has simply taken off.

Muromec 5mo ago
I don't see any taking off actually
- warumdarum 5mo ago
  I think in a way we have seen a take off, by detaching the hype bubble from success metrics. Companies making products being bought by companies making products, that are hyped by machines, bought bymachines and evaluated for viability by machines. If economy is to hack the API of VC this has taken off! For now.
- dmoy 5mo ago
  I think they meant the stock market more generally? S&P 500 is up what, like 4x in the last 10 years?
  - Muromec 5mo ago
    If I would drink 4x more beer that would concerning, but the number going up 4x should make things better how exactly?
    - ludwik 5mo ago
      This was said in the context of a person predicting a stock market bust, so of course a stock market index price is the relevant number here.
      - Muromec 5mo ago
        Yeah, fair. I still can't shake off the nagging feeling most of it being a scam somehow and not the business as usual scam. The gut feeling that things proclaimed and observed don't add up.
  - tardedmeme 5mo ago
    That's just inflation, which is primarily controlled by the government via the money supply. It doesn't mean anything. What does mean something is the severe deflation in wages and consumer goods - why is all the money printing remaining in the rich person's realm instead of trickling down?
    - Muromec 5mo ago
      Peasants aren't picking up enough shit after the rich to distill traces of gold from it, that's why
    - dmoy 5mo ago
      Inflation is not up 4x in the last 10 years...
      - tardedmeme 5mo ago
        Depends what you measure. I already said it hasn't been affecting wages or consumer goods and that's weird.
        dmoy 5mo ago
        Very, very few things even in isolation have inflated 4x in the last 10 years. But as for this > why is all the money printing remaining in the rich person's realm instead of trickling down? Always has been, it's kinda one of the defining features of capitalism
        tardedmeme 5mo ago
        > Very, very few things even in isolation have inflated 4x in the last 10 years. The assets in the S&P 500 have, that's what was brought up.
        dmoy 5mo ago
        Right, but that's a separate thing from inflation, so I don't think you can describe it as "that's just inflation".
code_biologist 5mo ago
As a bear that's been very confused by markets failing to exhibit mean reversion in 2019 and 2022, and now with the Hormuz energy crisis, I've thought a lot about this. There's a lot of new things happening. Fed/QE intervention that has never stopped, just been more well disguised. Fiscal/government spend intervention. I think Mike Green's work on the rise of passive investing is really good, in particular explaining how it prevents mean reversion in absence of changing net cash flows into passive instruments. Passive will also induce or worsen the bust if net cash ever starts to flow out passive. Green's youtube interviews are great. All to say, your SO's dad would have been right at any point prior to the current financial cycle. Knowing what's changed doesn't make forecasting easier though.

kalkin 5mo ago

I mean, there's a reason I started with a distancing phrase about a "reasonable argument"; I think what I'm suggesting is an interesting lens but does not capture the whole picture. But also, even if bust is business as usual in the big picture and not a social disaster long term, it's of course not what individual investors want for their particular current investments.

slumberlust 5mo ago

You're describing the Gartner cycle: https://en.wikipedia.org/wiki/Gartner_hype_cycle https://en.wikipedia.org/wiki/Gartner_hype_cycle

chatmasta 5mo ago
No, he’s describing the Business Cycle, with literature about it predating Gartner by a few centuries: https://en.wikipedia.org/wiki/Business_cycle https://en.wikipedia.org/wiki/Business_cycle

uncivilized 5mo ago

Your comment and the parent comment are not in disagreement.