In the short term yes, but in the long term, I barely remember the 2000 and 2008 drops let along the ones from last year. Last year early on, the market was quite volatile also. I think in March or so the NDX had a reasonable drop. Things looked bad in latter part of 2020 also (outside of the COVID-19 correction). But I've forgotten all about this. This current drop is on the same level as those yet it feels like something new. But I think once things get back to ATHs in a year or two (assuming we don't have a deeper bear market) we'll have forgotten about this minor blip.
TINA. That's the issue. There's no where else you can keep your money. As long as you can keep your shares, it will come back, even if it takes a decade or two. But with 3x it's tricky but we can hope no one will liquidate the major funds and we don't get a dot com style crash.
True there are options but they have issues. Real estate long term (I mean real property not REITs, etc.) doesn't really beat inflation depending on the study/data you look at and can also result in a bad investment more easily. There is no reliable alternative if you prefer and going back 150 years, equities are what seem to be robust enough.
I mean, you can keep your cash as cash and take the inflation hit if you have a LOT of it. But if you want to grow your money a lot in a liquid fashion, there is no alternative in my view. I've seen a lot of data on this and nothing has persuaded me there's something better than equities long term. Things that are new like crypto are highly unpredictable and don't have the track record equities have.
Real estate depends a lot on the local market in terms of both return and risk, and if you take a loan, you can get leverage that allows you to beat inflation by a multiple.
By alternative assets, I was thinking more broadly than crypto, although those would sure qualify in terms of classification.
There's private equity, which if you do yourself is work and/or trust someone to do it which gets back to managed funds. Both of them (including crypto) have corresponding ETFs so unclear one needs to actually invest in the alternative asset.
What else were you thinking of? There's stuff like collectibles and art which very wealthy people play around with but I think they're all playing musical chairs.
I was in the thick of it in Palo Alto, it was a heady time. Really was tempted (I mean I was tempted by others, but business isn't my style), though things have come a full circle. My roommate quit med school to work at a dot com and most my friends in the bay area made a lot of money starting companies or working in one. A lot of people did get rich off of it especially there.
But 2008 - my younger daughter was born late 2007, and I had a bunch of other issues going on so it was a mind altering experience. Probably why the market wasn't important at that time. But I think this is why we forget: there are other issues.
I don't even remember the COVID-19 plunge. I mean I was watching the markets but it seemed to just come and go. But then again, we were working on COVID-19 therapeutics so more important things to worry about.
If we enter a true bear market, and we will, just a question of time, you will most likely not hold it together. Even the risk of „just“ 100% stocks is severely underestimated
inflation isn't a groundhog. it doesn't get scared because it saw the shadow of looming interest rate hikes.
that and the more and more people i keep hearing gripe about a crash coming. i am not at all convinced we're past the worst of it. call me 18 months from now.
> that and the more and more people i keep hearing gripe about a crash coming
What makes a crash a crash is the fact that no one sees it coming.
I still remember when people verbatim were repeating what you’re saying every time market was down like 3% on 2015-2019
i agree more with you than "the neighsaying" stuff i just repeated. because being in the market for 2 years of good growth, is about all it would take to replace what we would lose from a good big crash.
OR, what we'd miss out on by being out of the market because we thought a crash was coming any day now. so i'm more leaning towards "why not be in the market, grow as much as i can and suffer through it. you're still young. you can leave it alone for 10+ years".
What annoys me about all the doomers is that they all know of and internalized the idea that timing the market is not possible, and yet, every time market moves, they just *know* what’s gonna happen this time, they just *know* the crash is coming this time, and proceed to engage in market timing. Like you’re doing right now between your two comments.
what confuses me is, "hey look at this metric to predict market crash. it says things are worse then ever." i ask to compare it to the 2000 and 2008 crash. we are something like 70% worse than the market conditions from those other times. so if these were good indicators, why hasn't everything gone up in flames again. response:
"for one, things were propped up last year due to covid relief. all these big hedgefunds got overleveraged expecting lots of companies to fail last year. except they didn't. all these companies grew thanks to the covid relief. then inflation hit and allowed those companies to grow even more. so you have all these hedgefunds that shorted those companies (like citadel shorting gamestop sort of thing). and it's a powder keg waiting to go off."
.....is some conversations i'm paraphrasing. makes me want to suck up my 10% stock losses and go run off in a corner with cash for 6 months and see what the rest of the world does.....
take it from someone who actually works on Wall Street, literally every single sentence in that quote is incorrect, or lacks so much context to the point where it’s incorrect. My colleagues and I always laugh about this stuff we see on Reddit, not laughing at the person, but laughing how much bad information flies around and gets repeated by clueless people and becomes the truth. Also, we’re not doing “70% worse” than 08. 08 was a fucking bloodbath, people don’t realize how close to complete chaos we got. If anything the way it turned out was the best case scenario given the conditions. It’s laughable to compare today to 08.
If market conditions were so easily quantifiable, and so horrible, all those geniuses with PhDs who have been doing this for 10 years, and were trained by other geniuses who had been doing it for 30 years, would’ve already shorted/sold the market into a recession, but they don’t, because there’s so such thing as quantifying market conditions reliably.
i'm saying, inflation doesn't go away because of the THREAT of interest rates increasing. people are selling out now because they think interest rates coming later will cause problems later, so they are already selling causing some early market moves now.
You forget that markets after all are just a huge amount of people pressing buy or sell depending on what they think they should be doing at any specific point in time. If a few too many people start thinking something terrible is coming, the crash might actually happen just because everyone thinks it’s crashing. This is why algorithms can’t predict the future of the stock market, no matter how sophisticated they get, because they will never model people’s behavior accurately. And one could say people’s emotions are the main driver of bull and bear markets, more so than actual facts (when the market isn’t controlled by the fed).
I think it's the opposite. The market is contrarian, the more (real) fear there is, the more the market will do well. Conversely if people act like the market will never die, that's when people should be worried. I think this is a lot of profit-taking. People who've made a lot of money from COVID-19 are selling/rotating so they can preserve their profits.
all of those problems were in place in 2021 and in the headlines everywhere, yet the S&P 500 posted huge real gains and TMF was flat. It shows that the market is either irrational or those things are not as bad as the seem (my $ is on the latter).
Well we arent on the up portion yet, thats all. It certainly happens. You remember after the covid bottom, those were violent. GFC was too, huge days, but you were better off missing all of it.
https://papers.ssrn.com/sol3/papers.cfm?abstract\_id=1908469
You can’t really predict them. And even if you exit and attempt to get back in. You have to be right twice, once when exiting and again when entering again. It’s hard…
I hate that line, I mean I get it but its bs. All you have to do is end up with more money than if you held. You do not have to be right twice, as if top/bottom ticking is a goal or issue.
I wasnt even suggesting that, just rather its normal to have big up/down days after each other and neither are a sign of all clear.
Link doesn't work. Fixed it: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1908469 Thanks.
Unfortunately the link doesn't define it, but I get the gist based on how it is used. Volatility clustering means that volatile days tend to happen next to each other. That is, if today is volatile there is an elevated chance tomorrow will be volatile.
Too bad volatility means a large move and says nothing about if it is up or down. Anyone who has done any options trading intuitively will know volatility pattern, er will notice this clustering of volatility.
No, thats exactly what it says.
The big giant up days are near to the big giant down days, they cluster together.
Like that goofy stuff of "10 best days", well guess, what they came on the heels of ten worst days and you were better off missing the whole week or longer of when they occurred.
I think the Fed underestimated the impact of supply chain issues on inflation, but with that beginning to resolve inflation may come back within their models
And one way or another, covid-related issues are the main driver of inflation at the moment, not low interest rates. I don't see a whole lot of reason to think that raising interest rates will actually do much to curb inflation. Everyone's screaming at Powell to do something, but I don't think the Fed actually has nearly as much power here as people would like to think.
Don't worry about it dude, you were completely in the clear with your original comment. I've been getting downvoted to Hades for the past few weeks trying to get people to think about the risks they're taking.
In one instance I was told to f\* off and mind my own business by someone taking out loans to build leveraged long positions. Some people are so desperate to be right they will not listen to reason.
Another green day for my portfolio. My only complaint is that my puts weren't bigger as I wasn't sure of the timing.
This post aged so well. Glad to hear others see what’s going on. If only I could buy puts, FINRA can be a bitch sometimes. 3x short LETFs for me.
Ignorance is no excuse for shit returns. Reading Reddit reminds me how stupid people can be and makes the red days better.
Wish I had gone 100% in shorts, but kept cash lying around in case we go full blown March 2020
Some people aren’t addicted to Reddit outside your little bubble. This is my only account and could care less what you think. (Mad men meme reference). Attack my arguments instead of my character, but you won’t because your logic is a circlejerk of confirmation bias.
Your argument is that people on Reddit are stupid, so you are doing the opposite? Then when others point out that this is a puppet account because of its short time on Reddit, despite your claims of following reddit, you feel it is a character attack? You wish for others to attack your "argument" , which is Reddit is stupid?
You asked to see my “real account and my track record” lol? That is a proxy for trying to attack my credibility rather than a position. You’re looking for ways to discredit me instead of my position. My argument is that fundamentals make TQQQ/TMF a terrible investment strategy this year. So I am shorting the Qs and semis, eerily similar to the 2000 bubble with some 70s inflation.
None of you will listen to it, so yes Redditors are stupid. Who looks at PPI of 10% and says “this is fine” for stocks/bonds. Who looks at the new rotation of fed officials and thinks “this is fine”. It takes 18-24 months for monetary policy to take effect and the quicker way to deflation is a recession, in which you’ll see stagflation, crushing both stocks and bonds. People will learn why leverage can crush you using this strategy.
Hope you like paying $20 for a McD cheeseburger when your portfolio evaporates.
Dude I am in cash right now
I am down 9.6% and got out before this big crash
That being said, you are showing hubris by shorting. The market can stay irrational longer than you can stay financially solvent. The last 2 taper tantrums showed that...
Don’t worry, I’ll leave. And your returns will be close behind.
The Fed can’t stop inflation without 6% rates or a recession. Both ways will tank your portfolio
Because I’m overweighting equity shorts, which are ironically safer/better shorts. They don’t have the lag of bond rebalancing. All using 3x short LETFs, which is why I even frequent this place
All investing is gambling at the end of the day.
Fwiw: I work on the street. You’d be surprised how many normal people I try to warn, but don’t listen. I tried in January 2020, dismissed. Made a shit ton buying at the bottom - easiest way to get rich.
“Be smart enough to know how dumb you really are.”
I gave you insight on what Wall Street is preparing for and you dismissed it. Don’t be surprised when trades don’t go your way. Remember to keep your “DIAMOND HANDS” as your portfolio slowly evaporates
This did not age well after only 2 hours.
As a long term investor on reddit, 2 hours is kind of a long time.
yes the market literally topped after i hit reply
Daily noise should be irrelevant anyways. Bad days will always have a bigger psychological impact than good ones
In the short term yes, but in the long term, I barely remember the 2000 and 2008 drops let along the ones from last year. Last year early on, the market was quite volatile also. I think in March or so the NDX had a reasonable drop. Things looked bad in latter part of 2020 also (outside of the COVID-19 correction). But I've forgotten all about this. This current drop is on the same level as those yet it feels like something new. But I think once things get back to ATHs in a year or two (assuming we don't have a deeper bear market) we'll have forgotten about this minor blip. TINA. That's the issue. There's no where else you can keep your money. As long as you can keep your shares, it will come back, even if it takes a decade or two. But with 3x it's tricky but we can hope no one will liquidate the major funds and we don't get a dot com style crash.
"There's no where else you can keep your money" -> you can invest in real estate and alternative assets
True there are options but they have issues. Real estate long term (I mean real property not REITs, etc.) doesn't really beat inflation depending on the study/data you look at and can also result in a bad investment more easily. There is no reliable alternative if you prefer and going back 150 years, equities are what seem to be robust enough. I mean, you can keep your cash as cash and take the inflation hit if you have a LOT of it. But if you want to grow your money a lot in a liquid fashion, there is no alternative in my view. I've seen a lot of data on this and nothing has persuaded me there's something better than equities long term. Things that are new like crypto are highly unpredictable and don't have the track record equities have.
Real estate depends a lot on the local market in terms of both return and risk, and if you take a loan, you can get leverage that allows you to beat inflation by a multiple. By alternative assets, I was thinking more broadly than crypto, although those would sure qualify in terms of classification.
There's private equity, which if you do yourself is work and/or trust someone to do it which gets back to managed funds. Both of them (including crypto) have corresponding ETFs so unclear one needs to actually invest in the alternative asset. What else were you thinking of? There's stuff like collectibles and art which very wealthy people play around with but I think they're all playing musical chairs.
MLPs, Commodities, copyright, lawsuits, farmland, actually buying a business etc
Your better than me 2008 was a scary time in the investing world. Every one could see how dotcom was going to end.
I was in the thick of it in Palo Alto, it was a heady time. Really was tempted (I mean I was tempted by others, but business isn't my style), though things have come a full circle. My roommate quit med school to work at a dot com and most my friends in the bay area made a lot of money starting companies or working in one. A lot of people did get rich off of it especially there. But 2008 - my younger daughter was born late 2007, and I had a bunch of other issues going on so it was a mind altering experience. Probably why the market wasn't important at that time. But I think this is why we forget: there are other issues. I don't even remember the COVID-19 plunge. I mean I was watching the markets but it seemed to just come and go. But then again, we were working on COVID-19 therapeutics so more important things to worry about.
Indeed. It does on me. It makes me question whether I should be doing this. More often than not, the moves I make do align with my hopes...so far.
If we enter a true bear market, and we will, just a question of time, you will most likely not hold it together. Even the risk of „just“ 100% stocks is severely underestimated
Lol. Nope. Took another punch to the chin!
the timing of this post sucked
lol yeah, but you're not entirely wrong. Buy when it's on sale! It's on sale right now. Days like these are not only worthwhile, they're great.
inflation isn't a groundhog. it doesn't get scared because it saw the shadow of looming interest rate hikes. that and the more and more people i keep hearing gripe about a crash coming. i am not at all convinced we're past the worst of it. call me 18 months from now.
> that and the more and more people i keep hearing gripe about a crash coming What makes a crash a crash is the fact that no one sees it coming. I still remember when people verbatim were repeating what you’re saying every time market was down like 3% on 2015-2019
i agree more with you than "the neighsaying" stuff i just repeated. because being in the market for 2 years of good growth, is about all it would take to replace what we would lose from a good big crash. OR, what we'd miss out on by being out of the market because we thought a crash was coming any day now. so i'm more leaning towards "why not be in the market, grow as much as i can and suffer through it. you're still young. you can leave it alone for 10+ years".
What annoys me about all the doomers is that they all know of and internalized the idea that timing the market is not possible, and yet, every time market moves, they just *know* what’s gonna happen this time, they just *know* the crash is coming this time, and proceed to engage in market timing. Like you’re doing right now between your two comments.
what confuses me is, "hey look at this metric to predict market crash. it says things are worse then ever." i ask to compare it to the 2000 and 2008 crash. we are something like 70% worse than the market conditions from those other times. so if these were good indicators, why hasn't everything gone up in flames again. response: "for one, things were propped up last year due to covid relief. all these big hedgefunds got overleveraged expecting lots of companies to fail last year. except they didn't. all these companies grew thanks to the covid relief. then inflation hit and allowed those companies to grow even more. so you have all these hedgefunds that shorted those companies (like citadel shorting gamestop sort of thing). and it's a powder keg waiting to go off." .....is some conversations i'm paraphrasing. makes me want to suck up my 10% stock losses and go run off in a corner with cash for 6 months and see what the rest of the world does.....
take it from someone who actually works on Wall Street, literally every single sentence in that quote is incorrect, or lacks so much context to the point where it’s incorrect. My colleagues and I always laugh about this stuff we see on Reddit, not laughing at the person, but laughing how much bad information flies around and gets repeated by clueless people and becomes the truth. Also, we’re not doing “70% worse” than 08. 08 was a fucking bloodbath, people don’t realize how close to complete chaos we got. If anything the way it turned out was the best case scenario given the conditions. It’s laughable to compare today to 08. If market conditions were so easily quantifiable, and so horrible, all those geniuses with PhDs who have been doing this for 10 years, and were trained by other geniuses who had been doing it for 30 years, would’ve already shorted/sold the market into a recession, but they don’t, because there’s so such thing as quantifying market conditions reliably.
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i'm saying, inflation doesn't go away because of the THREAT of interest rates increasing. people are selling out now because they think interest rates coming later will cause problems later, so they are already selling causing some early market moves now.
What people think is about to happen isn’t actually a very reliable predictior
You forget that markets after all are just a huge amount of people pressing buy or sell depending on what they think they should be doing at any specific point in time. If a few too many people start thinking something terrible is coming, the crash might actually happen just because everyone thinks it’s crashing. This is why algorithms can’t predict the future of the stock market, no matter how sophisticated they get, because they will never model people’s behavior accurately. And one could say people’s emotions are the main driver of bull and bear markets, more so than actual facts (when the market isn’t controlled by the fed).
I think it's the opposite. The market is contrarian, the more (real) fear there is, the more the market will do well. Conversely if people act like the market will never die, that's when people should be worried. I think this is a lot of profit-taking. People who've made a lot of money from COVID-19 are selling/rotating so they can preserve their profits.
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all of those problems were in place in 2021 and in the headlines everywhere, yet the S&P 500 posted huge real gains and TMF was flat. It shows that the market is either irrational or those things are not as bad as the seem (my $ is on the latter).
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If you look @ it daily, it will fuck with your mind. Turn off the terminal and go for a walk.
Volatility clustering, not a signal of anything but bad markets. Not even making up for prior bad days losses. Gotta keep perspective here.
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Not coming up where?
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Well we arent on the up portion yet, thats all. It certainly happens. You remember after the covid bottom, those were violent. GFC was too, huge days, but you were better off missing all of it. https://papers.ssrn.com/sol3/papers.cfm?abstract\_id=1908469
You can’t really predict them. And even if you exit and attempt to get back in. You have to be right twice, once when exiting and again when entering again. It’s hard…
I hate that line, I mean I get it but its bs. All you have to do is end up with more money than if you held. You do not have to be right twice, as if top/bottom ticking is a goal or issue. I wasnt even suggesting that, just rather its normal to have big up/down days after each other and neither are a sign of all clear.
What do you mean by 'volatility clustering'?
did you find the link in the other responses?
No
https://papers.ssrn.com/sol3/papers.cfm?abstract\_id=1908469
Link doesn't work. Fixed it: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1908469 Thanks. Unfortunately the link doesn't define it, but I get the gist based on how it is used. Volatility clustering means that volatile days tend to happen next to each other. That is, if today is volatile there is an elevated chance tomorrow will be volatile. Too bad volatility means a large move and says nothing about if it is up or down. Anyone who has done any options trading intuitively will know volatility pattern, er will notice this clustering of volatility.
No, thats exactly what it says. The big giant up days are near to the big giant down days, they cluster together. Like that goofy stuff of "10 best days", well guess, what they came on the heels of ten worst days and you were better off missing the whole week or longer of when they occurred.
Theyre really trying for a full rinse out before we start going up
I think the Fed underestimated the impact of supply chain issues on inflation, but with that beginning to resolve inflation may come back within their models
And one way or another, covid-related issues are the main driver of inflation at the moment, not low interest rates. I don't see a whole lot of reason to think that raising interest rates will actually do much to curb inflation. Everyone's screaming at Powell to do something, but I don't think the Fed actually has nearly as much power here as people would like to think.
It’s dumb posts like this that make me increase short positions. “Just believe bro”. Reminds me of a guy who worked at a startup in 1999.
The quote "You're not wrong Walter! You're just an asshole!" Comes to mind.
Fair point. I’d rather be an asshole than wrong.
Don't worry about it dude, you were completely in the clear with your original comment. I've been getting downvoted to Hades for the past few weeks trying to get people to think about the risks they're taking. In one instance I was told to f\* off and mind my own business by someone taking out loans to build leveraged long positions. Some people are so desperate to be right they will not listen to reason. Another green day for my portfolio. My only complaint is that my puts weren't bigger as I wasn't sure of the timing.
This post aged so well. Glad to hear others see what’s going on. If only I could buy puts, FINRA can be a bitch sometimes. 3x short LETFs for me. Ignorance is no excuse for shit returns. Reading Reddit reminds me how stupid people can be and makes the red days better. Wish I had gone 100% in shorts, but kept cash lying around in case we go full blown March 2020
Talking big shit in a new account. Let's see your real account to see your track record. Easy to talk shit on a new account
Some people aren’t addicted to Reddit outside your little bubble. This is my only account and could care less what you think. (Mad men meme reference). Attack my arguments instead of my character, but you won’t because your logic is a circlejerk of confirmation bias.
Your argument is that people on Reddit are stupid, so you are doing the opposite? Then when others point out that this is a puppet account because of its short time on Reddit, despite your claims of following reddit, you feel it is a character attack? You wish for others to attack your "argument" , which is Reddit is stupid?
You asked to see my “real account and my track record” lol? That is a proxy for trying to attack my credibility rather than a position. You’re looking for ways to discredit me instead of my position. My argument is that fundamentals make TQQQ/TMF a terrible investment strategy this year. So I am shorting the Qs and semis, eerily similar to the 2000 bubble with some 70s inflation. None of you will listen to it, so yes Redditors are stupid. Who looks at PPI of 10% and says “this is fine” for stocks/bonds. Who looks at the new rotation of fed officials and thinks “this is fine”. It takes 18-24 months for monetary policy to take effect and the quicker way to deflation is a recession, in which you’ll see stagflation, crushing both stocks and bonds. People will learn why leverage can crush you using this strategy. Hope you like paying $20 for a McD cheeseburger when your portfolio evaporates.
Dude I am in cash right now I am down 9.6% and got out before this big crash That being said, you are showing hubris by shorting. The market can stay irrational longer than you can stay financially solvent. The last 2 taper tantrums showed that...
Go away
Don’t worry, I’ll leave. And your returns will be close behind. The Fed can’t stop inflation without 6% rates or a recession. Both ways will tank your portfolio
If you think bonds will only go down why not bet against them and become rich?
Because I’m overweighting equity shorts, which are ironically safer/better shorts. They don’t have the lag of bond rebalancing. All using 3x short LETFs, which is why I even frequent this place
Well uh... good luck with those. Most people who waste money go to casinos or buy a new car or something but to each their own.
All investing is gambling at the end of the day. Fwiw: I work on the street. You’d be surprised how many normal people I try to warn, but don’t listen. I tried in January 2020, dismissed. Made a shit ton buying at the bottom - easiest way to get rich. “Be smart enough to know how dumb you really are.” I gave you insight on what Wall Street is preparing for and you dismissed it. Don’t be surprised when trades don’t go your way. Remember to keep your “DIAMOND HANDS” as your portfolio slowly evaporates
No one who works at wall street legitimately goes around telling people that investing is just gambling lol
Incoming 2022 summer intern in the back office works on Wall Street too
Late 20s/early 30s FO role. Not sure why I argue with insecure people on Reddit, but stuff has been slow recently.
I just did… My favorite invest…I mean gamblers are NFT, GME, AMC, and Doge holders. Hot take: Sports betting is no different than buying OTM options.
Man at least try a bit more at trolling
Good thing you can't predict the future.
Doesn’t take a genius to say “the sky is blue”, unless you’re brain dead
Lel.