And Michael Burry has been predicting crashes every few years since the 2008 one.
And Bill Ackman predicted 'hell is coming' at the onset of the pandemic and made $2B [0]. And there were US Senators that also did possibly illegal things to pull money out of the market before the public knew about the pandemic.
Outside of disclosures filed with the SEC, stock trading is anonymous yet they will have all sorts of headlines like today on Yahoo Finance it states "Stock futures tumble on heels of grim warning from FedEx". So all players in the market are just selling everything across the market to the tune of -1.4% because FedEx is having issues? I question headlines in the financial sector, more often lately it feels like its just what they want you to believe to get you to take actions that benefit themselves.
I read a lot of these type of predictions, often you see some people say it's a great time to buy, and others it's a bad time to buy, and generally you will only remember the people who guessed correctly, so none of this helps you today at all. Every time those people who got lucky will appear in some future ad or article making a new prediction, and generally fewer will be lucky twice. In the long run, everyone is likely wrong.
Your comment makes me realize that in the medium term, after most of the unlucky predictors drop off, you are statistically likely to be left with a few really lucky ones (i.e. if a thousand people are tossing coins, you're likely to get one guy with a streak of 10 heads), and these individuals are perfect to put on pedestals as rare and brilliant talents.
> Every time those people who got lucky will appear in some future ad or article making a new prediction, and generally fewer will be lucky twice.
Survivorship bias, survival bias or immortal time bias is the logical error of concentrating on the people or things that made it past some selection process and overlooking those that did not, typically because of their lack of visibility.
This is why the dollar cost averaging technique works so well. No, it's not likely to provide you a financial windfall, but it's also not likely to yield you financial devastation either. If you're investing for retirement then it generates quite a bit of wealth in the long term.
>So all players in the market are just selling everything across the market to the tune of -1.4% because FedEx is having issues?
FedEx's issues is that their volume is down massively. High (nay, accelerating) rates of trade are the foundation of the modern economy. If trade starts to slow down, or, Lord forbid, decline, then yes that can have massive negative repercussions.
Based on the last few years of my (and a relatively wide friend circle) experiences with FedEx I wouldn't be surprised if they are just suffering from getting outcompeted by Amazon and others. If their internal logistics are as bad as what the customer-facing experience would lead me to believe, I worry for their future.
Edit: completely subjective and armchair-quarterback-like opinion, of course.
US military industrial complex donated propaganda research to unis after Korea and it made its way to journalism, behavioral economics, advertising, and marketing programs.
“Stimulate as best as possible an emotional mood, insert talking point so next time that mood bubbles up the message comes to mind.”
Ackman said hell was coming, was appropriately hedged using instruments which would appreciate when hell did indeed come, and made $2bn on his hedge which offset the losses in his equity positions. He didn't net profit $2bn.
Burry is doing a lot of pretty short term speculation, according to his filings. What is a crash for a short term investor might be a bump for a long term one.
They disclose their trades a month or two afterward. If there's any confidential info embedded in those trades its value is probably gone by the time we find out about them.
The key word in hedge fund is hedge. They're not supposed to outperform the market. They're supposed to not fall as far as everything else during a crash as well.
Granted, that's not really how things work in practice anymore, but that's supposed to be the idea.
Why is 'the market' the only benchmark worth comparing to? For many investors it is too volatile, they can take worse performance if the chance of major drawdowns is reduced.
You shouldn't read those headlines. Both the ones walking you off a cliff in increasingly devious ways the interviews with Warren Buffett saying buy and hold which is a pessimal strategy, and the headlines announcing x happened because y as if you should think y leads x. It did not, they don't know that, news blogs get a pass in telling people false causes after the fact, dude it's purely made up and it's a guessing game to train you to guess as it suits them. Plato's Cave.
Yeah some clowns named Ray and Warren also keeps crying wolf about how the economy has issues too. These guys have no idea what they are talking about! I don't think they even trade.
> “There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” he said in an interview with Alex Karp, CEO of software and A.I. firm Palantir.
Adjusting for inflation, the stock market was not "flat" during this period [0]. The DJIA, for example, closed at an effective price of 9,160.41 in January 1966 and closed at an effective price of 3,176.25 in December 1982. That's a 65% drop, which is a pretty big stretch to call "flat".
You are correct, but to clarify, you are saying the value declined when adjusted for inflation. The DJIA average sat around 900 the about a decade, with the real value getting eaten away by the high inflation of the time.
A lot of the adjectives that traders use are different from how casuals would interpret things. They are looking for massive profit opportunities and declare hell on earth when they aren't there because it is for them. People who are just putting 401K money into index funds just need their money to slightly outpace inflation which it will almost always do in a long enough time horizon. We saw an outsize bull market and are now giving up a lot of those gains, but if you just buy and hold, you're nearly guaranteed to come out ahead even if you don't really have much chance of making a killing.
"Nearly guaranteed" may be a stretch. There are decades in US history where you wouldn't really come out ahead (although I'm not sure any alternatives to stock would have done better) but internationally, there are many clear examples where the stock market hasn't been a good investment on a generational basis, like Japan now. The question is how much do you believe in American exceptionalism, are US markets really immune to this kind of failure forever, or have they just been on a really good run?
For those who don't know, Druckenmiller is also very well known for changing his mind the minute facts change which is one of the hallmarks of good trading.
Very true. Plus this is nonsense. Interest rates are still far too low. There is wayyyyy too much money floating around in the system and global growth has slowed. That money will be chasing returns wherever they can find them and that has been the market and now real estate. Both of these will be net up over the next 10 years. It will be choppy for a few years as inflation is battled and interest rates rise a little bit more.
Inflation adjusted won't that look rather flat or negative? Where are these real returns going to be coming from? Hot stocks haven't been paying appropriate dividends for the last two decades.
This is the best comment in all. HN folks don't understand the purpose of this article. You think Druckenmiller is so bearish? for the next 30 yrs? Not a chance. He must have a huge short position on the S&P500, and he likes you to sell your stocks so he could cover at a lower level.
Nah. Druck isn't one of those types. Bill Ackman is.
Druck is just known to change his opinion when the facts change or he comes to a new conclusion. There's some anecdote about him completely flipping on a position when going in and out on an elevator ride that I can't quite remember.
By the way, sideways means that the stock market is going nowhere long or short. IMO, currencies and commodities are a far better place to speculate.
Saying the market was "flat" between 66 and 82 is a ridiculous oversimplification.
There was a pretty strong bull market leading into 1973 which then began the worst bear market since the great depression, lasting until November of 1974.
Then the market bounced and a strong bull market ensued. Net inflation and price over a long period one could argue the market was flat or down, sure, but on a year-to-year basis to argue there was no money to be made or lost holding stocks during this period is just wrong.
If you were clever enough to get out of the market early in the 73-74 bear market and then get in relatively early after the November of 74 rebound, you'd have certainly had good returns. If you think that's just hindsight and nobody could've done that, read Marty Zweig's Winning on Wall Street where he has a section entirely devoted to that period and how he did avoid most of the drawdown.
At this point, I’m expecting both stagflation and a flat market for years to come. Odd that mortgage rate is above 6%, inflation is high, layoffs are happening, and yet the White House is pretending it’s not a recession and won’t say the word.
I don't doubt that high interest rates will cause unemployment to rise, but saying "layoffs are happening" is a little disingenuous. We are still in the midst of one of the strongest labor markets in US history.
The top 40% are unbelievably flush with cash and the job market is strong as ever (bloated tech companies don't count, their value was solely promises anyway).
The fed is fighting to undo the QE it over did during the pandemic
"Layoffs are happening" is not a metric, it's a truism. Layoffs are always happening somewhere, even in a growing economy. How prevalent are layoffs in the overall economy? You didn't even bother to check.
Current mortgage rates have little to do with recession, if at all.
Inflation is a problem, and it could absolutely lead to recession in the near future, but it hasn't yet. This is why the White House is "pretending" we're not in a recession.
Inflation isn't high any more. July was 0% and August was 0.1%. The headline number looks at a 12 month window. Until the very high inflation months earlier this year drop out of that window the headline number will be high. But it does not look like prices are increasing much anymore.
All of the long term trends still point to low inflation like they did before Covid. Slow population growth, technology, and boomers aging out are strong forces keeping inflation in check. IMHO we are going to go back to worrying about deflation in the next 12 months or so.
The reason people find the 'zero inflation' headlines misleading are mainly for three reasons:
1) Aggregate month-to-month inflation metrics were flat/low due to gas prices falling, but many important categories were still quickly inflating. Notably rent, but also food.
2) The reason people normally reference 12 month inflation windows is because many things, like energy prices, are very volatile month to month. It is going to take time to really see the trends.
3) For things that skyrocketed like food, people are hoping to actually see the prices come back down.
So, yeah, you are correct on your numbers, clearly. But as an non-expert, I'm not really sure the current trends are positive. I think they are still pretty troubling.
The CPI was 255.7 in 2019 and estimated to be 294.4 for 2022. That's a 15% increase in three years in an index that's acknowledged to somewhat under-report inflation. CPI could flatline (zero MoM) for the next two years and we would still be at 3% annual inflation over five years, which is above the Fed's target, in addition to all the asset inflation we've had that the CPI doesn't really track. Absolutely nobody who pays real bills will feel like inflation has subsided.
> IMHO we are going to go back to worrying about deflation in the next 12 months or so.
There's a lot of money to be made in the STIRS markets if your prediction comes true.
I have a very different position on this. I think we will see the most growth we’ve ever seen in the next decade and it will be powered by AI.
I think most of these investors don’t really understand how close we are to have very useful AI and what it’s impact will be. We are roughly on the verge of another industrial revolution
None of the AI stuff really solves things like affordable housing or keeping wages up with inflation (or addressing inflation). It's not going to magically give us more energy without environmental impacts, or settle conflicts between countries.
Building another AI-marketed SaaS only benefits people who don't need those benefits. In all likelihood, it'll just give us more bullshit jobs.
> I think most of these investors don’t really understand how close we are to have very useful AI and what it’s impact will be. We are roughly on the verge of another industrial revolution
Tell me more. I'm willing to be persuaded by this position but I'm skeptical.
What specific AI breakthroughs do you think will happen on what timelines?
Just take AI assisted programming, if it makes devs twice as effective at their jobs then its massively increased the output of our most profitable industry.
This is just one field, AI will impact the output of most fields
AI will only be a positive revolution if it's not putting a large number of people out of jobs, but merely increasing their productivity.
Or, if it DOES put a lot of people out of jobs, it would be good for them to have some ownership over the AI, so that it's the labor force who reaps the benefits, not just the corporations. The bad scenario is mega-corps replace lots of humans with a fleet of machines owned by the mega-corp. The better scenario is we see widespread ownership of AI-powered productive property (that is, distributism), such that mega-corps contract out jobs to humans who own that property, and the property allows those humans to provide better service than before.
I think the economy is hitting real, hard barriers in resource extraction, energy usage, and number of people that buy and sell. That’s where stagnation comes from.
The real economy will stagnate. AI can automate some work and intensify future technological discoveries, but that won’t make energy any cheaper, clean our environment, create more humans, or make resources as easily extractable as they were 100 years ago.
The real economy can’t grow too much more than it’s current size, at least in the physical world.
>We are roughly on the verge of another industrial revolution
I was told that the "internet of things" would bring about unparalleled gains in manufacturing, and then that very quietly went away. I'm not holding my breath for AI to deliver on what IoT was supposed to do.
Readit News
And Bill Ackman predicted 'hell is coming' at the onset of the pandemic and made $2B [0]. And there were US Senators that also did possibly illegal things to pull money out of the market before the public knew about the pandemic.
Outside of disclosures filed with the SEC, stock trading is anonymous yet they will have all sorts of headlines like today on Yahoo Finance it states "Stock futures tumble on heels of grim warning from FedEx". So all players in the market are just selling everything across the market to the tune of -1.4% because FedEx is having issues? I question headlines in the financial sector, more often lately it feels like its just what they want you to believe to get you to take actions that benefit themselves.
[0]https://www.cnbc.com/2020/03/25/bill-ackman-exits-market-hed...
Survivorship bias, survival bias or immortal time bias is the logical error of concentrating on the people or things that made it past some selection process and overlooking those that did not, typically because of their lack of visibility.
FedEx's issues is that their volume is down massively. High (nay, accelerating) rates of trade are the foundation of the modern economy. If trade starts to slow down, or, Lord forbid, decline, then yes that can have massive negative repercussions.
Edit: completely subjective and armchair-quarterback-like opinion, of course.
Deleted Comment
23.52B Expected Revenue
23.20B Reported Reported
Difference: ~1%
Jim Cramer said the quiet bits out loud: https://youtu.be/gyaPf6qXLa8
https://youtu.be/r07Gg92YjOI
US military industrial complex donated propaganda research to unis after Korea and it made its way to journalism, behavioral economics, advertising, and marketing programs.
“Stimulate as best as possible an emotional mood, insert talking point so next time that mood bubbles up the message comes to mind.”
I just found out that there's a new ETF being filed that tracks trades by democrats and republicans.
Probably beat the market easily
They try too hard to predict the market, when in the long run if they just stayed long they would have done better.
Granted, that's not really how things work in practice anymore, but that's supposed to be the idea.
So, he was always waiting for this and this time he gets green numbers big time.
https://finance.yahoo.com/news/super-bubble-yet-burst-jeremy...
https://www.cnbc.com/2016/05/04/druckenmiller-get-out-of-the...
https://www.youtube.com/watch?v=4W58zLwdDzM
https://www.cnbc.com/2015/11/03/stanley-druckenmiller-heres-...
https://economictimes.indiatimes.com/news/international/busi...
https://priceonomics.com/the-trade-of-the-century-when-georg...
His streak was something like 25% or 30% over 30 years?
The tide is definitely going out. The Fed created a huge bubble and everyone knew it.
Fed Balance sheet at $9 trillion…
He has been making a lot of similar predictions for a while.
Adjusting for inflation, the stock market was not "flat" during this period [0]. The DJIA, for example, closed at an effective price of 9,160.41 in January 1966 and closed at an effective price of 3,176.25 in December 1982. That's a 65% drop, which is a pretty big stretch to call "flat".
[0]: https://www.macrotrends.net/1319/dow-jones-100-year-historic...
That's what I meant by "adjusting for inflation" and "65% decline". Apologies if that was worded confusingly.
https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
S&P 500 is -3.745%.
Deleted Comment
Druck is just known to change his opinion when the facts change or he comes to a new conclusion. There's some anecdote about him completely flipping on a position when going in and out on an elevator ride that I can't quite remember.
By the way, sideways means that the stock market is going nowhere long or short. IMO, currencies and commodities are a far better place to speculate.
There was a pretty strong bull market leading into 1973 which then began the worst bear market since the great depression, lasting until November of 1974.
Then the market bounced and a strong bull market ensued. Net inflation and price over a long period one could argue the market was flat or down, sure, but on a year-to-year basis to argue there was no money to be made or lost holding stocks during this period is just wrong.
If you were clever enough to get out of the market early in the 73-74 bear market and then get in relatively early after the November of 74 rebound, you'd have certainly had good returns. If you think that's just hindsight and nobody could've done that, read Marty Zweig's Winning on Wall Street where he has a section entirely devoted to that period and how he did avoid most of the drawdown.
The fed is fighting to undo the QE it over did during the pandemic
Current mortgage rates have little to do with recession, if at all.
Inflation is a problem, and it could absolutely lead to recession in the near future, but it hasn't yet. This is why the White House is "pretending" we're not in a recession.
All of the long term trends still point to low inflation like they did before Covid. Slow population growth, technology, and boomers aging out are strong forces keeping inflation in check. IMHO we are going to go back to worrying about deflation in the next 12 months or so.
1) Aggregate month-to-month inflation metrics were flat/low due to gas prices falling, but many important categories were still quickly inflating. Notably rent, but also food.
2) The reason people normally reference 12 month inflation windows is because many things, like energy prices, are very volatile month to month. It is going to take time to really see the trends.
3) For things that skyrocketed like food, people are hoping to actually see the prices come back down.
So, yeah, you are correct on your numbers, clearly. But as an non-expert, I'm not really sure the current trends are positive. I think they are still pretty troubling.
The CPI was 255.7 in 2019 and estimated to be 294.4 for 2022. That's a 15% increase in three years in an index that's acknowledged to somewhat under-report inflation. CPI could flatline (zero MoM) for the next two years and we would still be at 3% annual inflation over five years, which is above the Fed's target, in addition to all the asset inflation we've had that the CPI doesn't really track. Absolutely nobody who pays real bills will feel like inflation has subsided.
> IMHO we are going to go back to worrying about deflation in the next 12 months or so.
There's a lot of money to be made in the STIRS markets if your prediction comes true.
I think most of these investors don’t really understand how close we are to have very useful AI and what it’s impact will be. We are roughly on the verge of another industrial revolution
Building another AI-marketed SaaS only benefits people who don't need those benefits. In all likelihood, it'll just give us more bullshit jobs.
I just heard of this the other day and it is in my queue.
Tell me more. I'm willing to be persuaded by this position but I'm skeptical.
What specific AI breakthroughs do you think will happen on what timelines?
This is just one field, AI will impact the output of most fields
Or, if it DOES put a lot of people out of jobs, it would be good for them to have some ownership over the AI, so that it's the labor force who reaps the benefits, not just the corporations. The bad scenario is mega-corps replace lots of humans with a fleet of machines owned by the mega-corp. The better scenario is we see widespread ownership of AI-powered productive property (that is, distributism), such that mega-corps contract out jobs to humans who own that property, and the property allows those humans to provide better service than before.
The real economy will stagnate. AI can automate some work and intensify future technological discoveries, but that won’t make energy any cheaper, clean our environment, create more humans, or make resources as easily extractable as they were 100 years ago.
The real economy can’t grow too much more than it’s current size, at least in the physical world.
I was told that the "internet of things" would bring about unparalleled gains in manufacturing, and then that very quietly went away. I'm not holding my breath for AI to deliver on what IoT was supposed to do.