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I feel like we're talking about two different things here... You stated: > it's quite possible to recognize growing risk that a market isn't pricing in How i

by mbesto 13y ago

I feel like we're talking about two different things here... You stated: > it's quite possible to recognize growing risk that a market isn't pricing in How is this possible? What data, metrics, tools, do you have that shows an increase in risk other than a basic "intuition"? That's my point - if such a tool did exist to the common person (as you suggest, the techie in SV who isn't saving), financial institutions would be all over that. They aren't (but they claim to be) The blog post you reference, is just one data point. Just because one person feels that way, doesn't mean the whole culture is that way. > They assume that they have job security and will always be able to jump to another six-figure job with a phone call or two. As a result, many fail to save. I'm not disagreeing with this sentiment, but we'd both be drawing fairly baseless conclusions. Counter-point - Are there not loads of people who survived the 90's .com boom and making a killing today in SV? (i.e. PG is one example) So why would savings matter then?

7Figures2Commas 13y ago
> How is this possible? What data, metrics, tools, do you have that shows an increase in risk other than a basic "intuition"? That's my point - if such a tool did exist to the common person (as you suggest, the techie in SV who isn't saving), financial institutions would be all over that. They aren't (but they claim to be). The challenge is not finding data; the challenge is identifying which data is truly important and allowing yourself to make objective decisions based on the data. I'll give you a simple example: I am currently short JC Penney through options. Before I took my positions, one of the things I noted was a divergence between what the equities market was saying about the company's prospects and what the credit market was saying about the company's prospects. The credit market was notably more pessimistic about the company's position at the time (obviously measured by the risk of JC Penney defaulting on its debt), and now you see the equities market catching up. From what I can tell, a lot of folks in Silicon Valley don't even want to look at data. Startups with little to no revenue raising million-plus convertible notes with $5-15 million caps and sub-5% interest rates? And some of them have already raised capital? That's a data point that makes junk bonds yielding 7% look good by comparison.

by mbesto 13y ago

7Figures2Commas 13y ago

> How is this possible? What data, metrics, tools, do you have that shows an increase in risk other than a basic "intuition"? That's my point - if such a tool did exist to the common person (as you suggest, the techie in SV who isn't saving), financial institutions would be all over that. They aren't (but they claim to be). The challenge is not finding data; the challenge is identifying which data is truly important and allowing yourself to make objective decisions based on the data. I'll give you a simple example: I am currently short JC Penney through options. Before I took my positions, one of the things I noted was a divergence between what the equities market was saying about the company's prospects and what the credit market was saying about the company's prospects. The credit market was notably more pessimistic about the company's position at the time (obviously measured by the risk of JC Penney defaulting on its debt), and now you see the equities market catching up. From what I can tell, a lot of folks in Silicon Valley don't even want to look at data. Startups with little to no revenue raising million-plus convertible notes with $5-15 million caps and sub-5% interest rates? And some of them have already raised capital? That's a data point that makes junk bonds yielding 7% look good by comparison.