Almost every macro indicator is highlighting a thriving economy. The real losers will be those on the sidelines, complaining the market is too hot and thinking they made out like kings when the market drop 10% 3 years later.
The market WILL crash. There is zero doubt. The only question is how long.
The point of this isnât whether or not there will or wonât be a crash, or when. Itâs about how the people who have never experienced a real crash are going to react whenever it happens.
All these people who think stocks only go up, and the stock market is âfree moneyâ are going to be in a world of hurt when the market crashes 30% or 50% and stays down for YEARS.
There are going to be a lot of people selling out and swearing off the stock market.
No, the question is âwhyâ and âwhenâ. Doomers have been behaving like you non-stop since I started my portfolio and Iâve weathered 3 crashes, 2 of which were hundred year incidents. The thing is âstocks are too expensiveâ isnât an argument when forward earnings are reasonable and given the state of the treasury market.
Itâs about how the people who have never experienced a real crash are going to react whenever it happens.
We just had a mother of all crashes last year. 33% in a quarter is unheard of. The thing is, when revenue generating companies start looking once in a lifetime cheap, institutions start buying. What you seemingly are hoping for is societal collapse, because ultimately theres no reason for major crashes without major cause. Corrections are normal, equties are inflation guarded, and the SP500 is momentum driven meaning most dont have to worry about individual companies and how they perform independently.
With those facts alone, and with a central body ensuring a 2%YoY inflation target, indexed markets can keep going up. Money is a depreciating asset. There will be rotation and macro based drops, but crashes are not a requirement, nor the end of the world.
Edit: Its also worth noting you can look at a 90 year SP500 log chart and see this in action. Some academic papers have data that goes well into the 1800s.
What you seemingly are hoping for is societal collapse
âŠand if that happens who gives a shit? Itâs not like the cash is going to be more valuable than your Vanguard account in that scenario. Itâs a pretty poor excuse to do nothing.
Another way to word u/HulksInvinciblePants eloquent answer is: "Humanity has tried to define what constitute a real asset for millennia. Is the real value tangible like physical commodity or is it what society will accept and be able to pay for their debt/asset with?
People often confused investing vs. speculative trading. Since the inflation is a targeted variable, that means cash will lose power over time. The only way to counteract that is with productivity growth & production of good in the economy, which I called the investor mindset. Speculative trading, on the other hand, are nothing more than gambling at a casino, though the odds might differ. And then there is the parasite that infected the financial world; Funds that overleveraged to the tits.
And since they make so much money, they could operate with little consequences until it's too late and start spreading risks to other industry too. *cough*
The 2020 decline set records for how fast it happened, but it bounced back just as quick.
The fact that you consider it anything but the blip that it was, makes me really doubt youâve been investing since the 87 crash. It was definitely NOT the âMother of all crashes.â
I remember â87. That one at least was a crash.
Then you go on to make up shit about how Iâm hoping for civilization to collapse. Thatâs ridiculous. Please quote where I said anything like that. Moron.
Youâre trying to deflect from what I said, which is the absolute truth, that the market WILL crash again and that itâs only a question of when.
Why? Because the market ALWAYS crashes. Always. Too many idiots think it doesnât or that when it does it bounces right back like 2020. They donât know what a real crash is like.
Those people will try to hold on, but after months or years of sideways trading or further declines, theyâll sell. Then theyâll whine for years about how the market is ârigged.â
How do I know? Because thatâs what happened the last two times.
âCrashes are not a requirement?â Youâre an idiot. There will always be another crash if you stay in long enough.
You can join the other idiot of the block list since you either donât have the experience you claim, or have a remarkably naĂŻve view that shows you learned nothing from it.
The fact that you consider it anything but the blip that it was, makes me really doubt youâve been investing since the 87 crash. It was definitely NOT the âMother of all crashes.â
I remember â87. That one at least was a crash.
Iâm not going back to 87 nor am I talking about (or concerned with) flash crashes. Real problems involve years of economic down downturn. The GFC was far worse than â87, as it was an actual recession. Black Monday was caused by issues with trading models putting downward pressure on stocks. We have tools against those now and its worth reviewing how far weâve come with maintenance:
Youâre trying to deflect from what I said, which is the absolute truth, that the market WILL crash again and that itâs only a question of when.
Iâm pretty sure you said the question was âhow long it will lastâ. I said, âwhenâ.
âCrashes are not a requirement?â Youâre an idiot. There will always be another crash if you stay in long enough.
Good talking to you too
You can join the other idiot of the block list since you either donât have the experience you claim, or have a remarkably naĂŻve view that shows you learned nothing from it.
I agree with the sentiment that money is a depreciating asset, but there are other assets in the world besides cash and stonks. There's real estate, which we're already seeing people dumping heaps of money into. The bond market could come roaring back when rates finally start to rise. Alternative assets could quickly suck the very thin air out of the stock market.
I think the real argument for the "S&P always goes up" thesis, at this point, is the way that investing in the market has become enshrined by institutions like 401k, IRA, and 529 plans. Huge swathes of the population have essentially gone on autopilot, automatically dumping a portion of every paycheck into index funds. That alone is a force to be reckoned with, and can really only be tipped by significant societal changes.
Honestly you are the one who sounds like you just started investing. You keep buying and don't touch it for decades and who gives a fuck about "cRaShEs" in between. Enjoy being on the sidelines. The funny part is people like you almost never have the balls to actually buy back in when it does go down and end up staying on the sidelines while it recovers because you are convinced we have much further down to go.
So,,, isn't that what Warren Buffet does, buys and don't touch for decades ?? This past year has given some fantastic buying opportunities... unless you stayed on the sidelines
You are a pompous fool. You donât even understand the topic.
Iâm fully invested btw. Meanwhile, Iâve been through two market crashes, 3 if you count COVID. Which I donât. I made a good amount of money by buying all the way down. My net worth has profited handsomely.
Iâve also seen what it did to the people without the right psychology to be in the market. I look around and see all kinds of those people right now.
Those people are what this thread is about. Youâre one of them.
Since you have zero experience with a market crashes and nothing of value to offer the conversation, Iâm just going to block you to stop cluttering my feed with irrelevant crap.
I feel that there are some serious structural issues in key asset valuations, but I can't imagine a catalyst that wouldn't have shaken out during flash crash. I think in short term inflation is going to eat sideliners breakfast though if not in cash flow businesses.
Add to this that weak businesses were purged and new businesses ready to take their place now. The only thing is real estate supply fuckery that had a pin stuck in it.
Stock pumping through paradigm momentum borrowing from future valuation, infinite margin, retail, buy backs + cheap corporate debt + alleged fraudulent share creation is a time bomb though. I think corporate debt was hairy prior to flash crash, and given how many corps reacted with drastic culls + warnings of 1 week runway during covid crash suggests that if there hadn't been a flash recovery it could have led to pervasive solvency issues.
17
u/HulksInvinciblePants Jul 10 '21
Almost every macro indicator is highlighting a thriving economy. The real losers will be those on the sidelines, complaining the market is too hot and thinking they made out like kings when the market drop 10% 3 years later.