> They expect the problem to worsen. The stock market has climbed 23% this year...
The problem will resolve itself if (when?) the market crashes.
I remember the run up to the dot-com bust. I was too much of a bumpkin at the time to even know how I would trade stocks — but I listened to an acquaintance go on and on about how much he was making on the market.
At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.
In time, especially after the next bubble in 2008 when I had become more savvy, I came to see this guy as having been in the market at a time when even a monkey throwing darts could look like Warren Buffet.
So too I think are many of today's investors. (I would include myself but perhaps not: I have been won over by Boglism, a balanced portfolio, infrequent trading, etc.)
The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life. Almost nobody who “saw the crash coming” in the case of the dotcom bubble, or covid, or the subprime crisis made any money, because almost nobody gets the timing or magnitude of the crash right. You can find YouTube channels that have been warning people that a crash is imminent for the last two years. If you had been out of the market for the last two years you would have missed historical gains, and for what? The magnitude of the crash you’re protecting yourself from would now have to be impractically huge for you to come out ahead.
Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in a few years.
Agreed this sort of advice is standard - but many people don’t follow it because it’s boring.
One way to make this sort of advice “not boring” is to apply the advice to 90% of your net worth (or cash flow), but then give yourself permission to “gamble” with the other 10%.
For me, that has fulfilled my personal interest in playing around in the markets for fun while still building/growing a traditional “safe” portfolio at the same time.
I remember at one point a couple years ago, I saw a thread on the Bogleheads forum where people could basically call their shot on market crashes; they would post and timestamp when they exited the market and when they re-entered, so that people could go and calculate if the timing was correct or if they lost money by missing out on market growth.
I might not have the dates correct, but I remember the general strokes of one guy who decided in like 2017 or something that the market had topped out, the crash was coming any moment now, and he sold everything and called his shot. He missed out on three years of incredible gains, and then the market absolutely _crashed_ in early 2020. He got it right, by a very small amount; he had gotten more selling his positions than he would have gotten selling in march 2020. He buys back in at what ended up being the absolute nadir of the market in like april 2020 or something. The rare success story of timing the market, you love to see it.
And then a few days later, he decides that actually, no, the market still has more to drop, and he sells again. Oh well.
This is the reason dollar-cost-averaging works. You buy less (shares) when the market is high, and more when it is low, without thinking about it and without trying to "time" your transactions (which almost always fails unless you have inside info).
> The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life.
What do you think is the root cause for this kind of thinking? It is hard-wired from childhood, or borne of (difficult) experiences?
> Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in a few years.
This assumes that you are talking about the US stock market. Most other stock markets are far slower to recover from economic downturns and crises. Why? Their economies are less dynamic and their political leaders are more fearful of difficult (economic policy) changes.
> The stock market is a mechanism for transferring wealth from the impatient to the patient - Warren Buffett
> For 240 years it's been a terrible mistake to bet against America - Warren Buffett
Lastly: The Nikkei 225 (Japan's most important equity index) peaked in 1990, then took 30+ years to recover.
Also: Look at Mainland China since it was opened to (direct) foreign investment in the last 15 years. Overall: The Mainland China economy has grown a lot, but their stock market is a terrible place to invest.
I just always buy and never sell until the leadership and the board of the company appear to be going full retard. And not in a good way like Netflix pivoting to streaming in 2006 but like HP in 2006. Haha.
The Gov't / Federal Reserve has made it clear they will not let the value of assets drop significantly ever again. The entire planet's capital is now betting on US equities going up and to right forever, and all levers will be used and invented wholesale from nothing to keep that going.
This implies that a sustained crash will only happen if/when these two institutions are no longer capable of supporting the market. In effect, it's a bet against the US, which so far has been a losing one.
There's more to assets than US equities, the Fed would be far more concerned with serious weakness in the Treasury market, and Treasuries often move inverse of US equities.
I wonder if this sets up a moral hazard that only exacerbates a possibly coming crash. People assume the Fed will prevent assets from dropping, which makes them bid up asset prices to even higher levels that even the Fed is incapable of maintaining.
Yea, except the inflation we encountered in the last 3 years were directly from trying to keep asset values from dropping. They are at their ropes end. There really isn't that much room between mass inflation vs. the rich keeping their numbers infinity growing.
> At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.
You lucked out by mistakingly believing he was intelligent. The classic scenario is when your neighbor is obviously an idiot, making tremendous amounts of money in the market, and you have to explain to your spouse why you can't/won't emulate them. That's when even bright, (normally) level-headed people start piling in before the bubble bursts.
> The problem will resolve itself if (when?) the market crashes.
Someone said something like, Everyone thinks they're a genius, when the market only goes up.
Although, one thing different now is the heavy throughout-the-day manipulation of retail investors, effectively making strong social groups and identities around it.
That wasn't a thing when, say, ETrade started, and lots of people dabbled, and found it was hard to lose money, just trading around different companies, with little understanding of how things even supposedly work, much less how things actually worked.
Today, from what I occasionally glimpse, you've got all these supposed skills you're applying as a retail investor/sheep/pawn (including various degrees of snake oil, or thinking you're going to be one of the smarter people on a pump/dump scheme that leaves others holding the bag), and constant social groups where people even self-deprecatingly celebrate huge day-trading losses. Like a wholesome support group that actively encourages you to stick with the bad habit, rather than encourages you to stay sober.
So maybe, when the next big culling comes, you'll have lots of people who can somehow still get margin accounts, and will say, "Blood in the streets, and I'm missing 3 limbs, but, hey, stocks are on sale!" And a thundering chorus of other addicts, and their manipulators, encouraging them.
(Disclosures: S&P 500 ETF with low expense ratio in tax-advantaged, plus an emergency fund that goes nowhere near the market. :)
I've yet to really land on my opinion of the idea of a pending market crash with how much money printing has gone on.
All the standard indicators I look at really line up with the idea that a crash should be coming, or should already have happened. Companies aren't valued based on the fundamentals anymore, for example, and yet here we are.
Its starting to feel more like the perpetually increasing market, despite the fundamentals, is a sign of how weak printing and inflation is making the dollar. Stocks can go up when the companies are worth more (ideally because they are producing more), but prices can also go up because the currency used to value the stocks is taking a serious hit.
This is easy to say but the reality is being a monkey and throwing money in the market over the last 15 years would have made you f u money. Yet most people never did it.
So who is the genius: the guy who remains on the sidelines and eventually is proved right or the guy who remained in the market and did face a brutal correction.
One thing I've learned about myself is that I'll never be the guy on the right end of that mid curve meme so I might as well lean in on being on the left.
I've worked as a software engineer for various investment banks. The best quote and investment advice I've heard on those engagements is "Only monkey's pick bottoms"
Middle of the road, risk managed funds are our best chance of financial success, not individually predicting the market dynamics.
A market crash won’t be a silver bullet. I’ve known several gambling addicts and that’s not how addiction works. They don’t just stop because they lose a bunch of money. They always hold out hope they’ll be able to win everything back “next time”.
> Seeing all kinds of warning signs from family members who never traded or got into crypto until just this past 6 months.
That's just jealousy, Those who sit on the sidelines complain the most. Like I said in my previous post if you didn't see it. I see it as that the barrier to entry for making money has never been lower. Right now, it’s one of the best times in history for anyone to start earning, not just the Wall Street elites. Thanks to AI tools and online platforms, it’s easier than ever. Every week, new tools are being launched, some even claiming returns as high as 400%.
Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
Personally I got into this when the stock market crashed in 2020 and I made shit loads. There are big winners during crashes too, some of the biggest wins.
I see it as that the barrier to entry for making money has never been lower. Right now, it’s one of the best times in history for anyone to start earning, not just the Wall Street elites. Thanks to AI tools and online platforms, it’s easier than ever. Every week, new tools are being launched, some even claiming returns as high as 400%.
Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
Many criticize the retail investor for treating the stock market like gambling, but I think it really does resemble gambling more than investing these days.
How many times have we seen a companies value jump or fall by billions based on a tweet? How many meme stocks have we seen? How many pump and dump SPACs have there been? How many companies have never (and likely will never) made a dime in profit but see their market caps continue to climb?
“Value investing” is dead for most, picking a company that you believe will generate solid long-term revenue is no longer interesting. You need to figure out what is going to 10x tomorrow.
There are things that we could do to slow down the public equity markets and re-establish the relationship between stock price and business fundamentals, but that’s not what almost anyone wants.
I think the bigger problem is having a rational basis for choosing a company and believing in its revenue prospects. It's probably gotten harder now that companies much more commonly reinvest their profits in the company or into stock buybacks, rather than paying a dividend, for tax reasons. (Modulo the tax effects, paying a dividend vs letting the stock appreciate should be a wash, but it's harder to evaluate the current fair value of a stock when your evaluation is based on the expectation of that fair value changing over time.)
The key tenant of value investing is that there exist companies which based on their financial metrics are fundamentally under valued by the market (in opposition to what market price efficiency predicts).
From there, an insane market should provide you with even more opportunities to value invest.
We'll look back and see with clear eyes the transient phenomena that made strange and magical meme stocks and unicorns what they all were. Somewhere in the last 50 years stock investing turned from green-eye-shade economic analysis to a social phenomena that couldn't be bothered with dividends and profits.
I go to the supermarket and milk is on sale, I buy two. But momo clowns go and see milk is on sale and they try to sell the milk they have on hand back to the store. They don't act like the products they buy have fundamental value, because in many cases that value was inflated wildly beyond justification long before the trader ever got started.
I mean, it’s widely understood. There was deregulation in the ‘80s that kicked off the financialization trend (along with private industry customs being invented like Jack Welch’s whole chasing shareholder value uber alles shtick), and then the interest rates cuts in the wake of the 2008 recession (and then again during the pandemic) superheated this kind of behavior.
The thing is, picking a company that actually will generate solid long-term revenue isn't really a thing. You can try, but your success rate, if you're good at it, is going to be about equal to the success rate of companies. There are dozens of studies of professional traders showing this. If you're bad at it, you'll buy into the companies that are pure hype and do worse. And... you probably aren't good at it. Most people aren't.
The people who beat the market consistently have information you don't. Instances of people who call major trends before they happen and get rich are likely survivor bias and not genius.
things haven't changed since vanguard started index funds 5 decades ago. buying and holding diversified assets prevents you from thinking "You need to figure out what is going to 10x tomorrow."
I think the reality is the "don't try to be smart, do these low-risk things because statistically you're too stupid to beat the market" has logic to it, and stats to back it up. But the unspoken part is, "let the rich do that stuff, and their wealth advisors and folks on the golf courses".
So there's an elitist aspect to telling people to back off. We all know people who made a killing on individual stocks, either because they bought them or they worked at a company that issued them.
It's not really elitist. Picking individual stocks is essentially saying "I have brand new insight that nobody else has, and I'm going to earn profit by incorporating that knowledge into prices and be rewarded forgetting it right". This is clearly a very specialized activity, you shouldn't expect to be able to bring brand new, accurate insight, and out predict everyone else in the world, without a deep understanding of economics, finance, and expertise in the specific industry and the company you're trading in. It's no more elitist to say "most people should just buy index funds" than it is to say "most people should just get root canals done by dentists rather than doing it themselves".
So... literally survivorship bias, and insider trading. Great, neither of those make me think I'm arrogant or smart enough to day trade. Nothing about this is elitist.
I've made a killing on 'X' by getting in early and holding over the years. Not one single person in my life knows the details because I want zero responsibility for them getting wrapped up in it, and I know how hard it is for people to be patient and hold when they're chasing a high, I mean profits.
I lost my life savings chasing the dopamine hit and can relate to this. I'm in my mid 30s and suffering from career burnout. I know I can't afford a home when I can barely work full-time so I figured I'd trade. I was up, and up and up!
Then I was down, then up, then down.
One morning I woke up and I was so down, I sold out of fear.
Now I'm left with so little I might as well be starting from scratch.
This feels like gambling and here I thought I was smarter than those people that lost in casinos.
My experience, with a wide variety of generally older friends & associates & such -
If they're talking about an occasional visit to the casino, people will be up front about the fact that they walked into the place with $X in their pocket, and walked out with $Y. Almost always, $X > $Y.
If they're talking about stocks they've bought, people will be incredibly selective, and describe only some of their greatest successes. They could lose money in a rising market, and you'd have to carefully question them to even realize that fact.
Which is ridiculous because while casinos are engineered to ensure $x > $y over time, economies are existentially dependent on the reverse being true over time and across a broad enough portfolio.
Folks you can just buy the S&P 500 and wait. It really is that simple. Money will go down sometimes, up sometimes, down some more, but in the long run it will almost certainly go up. And if it doesn't, the world is crumbling anyway so who cares?
Heh, I'm kind of the opposite. I like talking about the time I gambled with a couple thousand on options and after a rollercoaster experience, lost it.
But my index funds are not an interesting topic, imo.
At this point I’m just watching a slightly younger cohort of men repeat all of my worst digital addiction mistakes like getting inserted into the online video game -> toxic online behavior pipeline (or worse, fascism), ideologies (Musk), crypto and options gambling (thanks Reddit a la 2013 for all of the crypto communities and WSB) too much computer (ouch, my neck, arms and back.)
I’m not doing particularly well, especially mentally, despite having tons of opportunity and successes. Worried about the younger cohorts, but I guess that is a tale as old as time.
I feel like the patterns are more or less the same but the cycles are getting shorter and more pronounced.
I met the son of a family friend today, he's 13, already has an opinion about the Israel/Palestine war and spent $500 in roblox so far, they're not wealthy at all. Back in my days I was stuck in the free to play parts of mmorpgs (or had to beg for months for a $5 monthly membership), playing tf2 (free) and had 0 political ideas or even knew people who cared about politics
When I was 13 I had a paper route and mowed lawns, and with those earnings I spent about $75 per month on video games and comic books, easily exceeding $500 over a year.
It's normal for 13 year olds to have strong opinions on such topics - they have plenty of time to refine them or even change their mind.
I would be more worried about those who by this age didn't develop any interest in geopolitics - it affects them all the same but they typically don't understand why and pick whatever source tells a more compelling story.
$500 in Roblox? that's a lot of money for a 13 year old and that money could likely be spent elsewhere... As far as the opinion about Israel/Palestine it's likely that opinion is inherited from family or cohort and it's not fully their own.
If you don't have decades of built up propaganda it's pretty easy to see that Israel is the bad guy. The condescending "it's complicated" line is part of the propaganda telling you that you're not allowed to come to the obvious conclusion for yourself. My 10 year has figured out that Russia is the bad guy in Ukraine and that Israel is the bad guy in Gaza.
Are they also drinking tons of soda? I can’t believe how much I used to drink. I don’t touch any drink with sugar (other than lactose/latte) nowadays. It’s so disgusting, don’t know how I ever did it in the first place.
Broad brushstrokes incoming and pure speculation but I wrote it out anyway…
Today’s youth are more proactive with their identities these days than we were. We were and remain reactive with our identities. That preference influences what triggers the dopamine hits needed for life.
The drugs of a reactive identity culture are sugar, alcohol, narcotics, work, anything that’s a trope in movies made by boomers. These drugs have consequences that shape the user’s identity. For example: weight gain or burnout.
But the drugs of a proactive identity culture are those that drive the person’s perception of their identity. The live ahead of the consequences. Things like digital social networks, status symbols like shoes, colleges, or jobs, and anything that drives success in those status symbols. Example: Adderall helps the user study, which helps the user get better grades, which opens the door to a better college, which allows the user to flaunt that college association as part of their identity. That doesn’t mean there aren’t consequences to those drugs but those consequences aren’t tropes of modern life just yet because we’re still normalizing their outcomes.
All of this to say: sodas aren’t their thing because soda is “unhealthy” and that drags on their identity.
People want a chance to get rich. They also want excitement.
Doesn't that say more about our jobs that are
a) dead-end for most
b) financially limiting, with a salary that goes up slowly, if at all, unless you find a new job
People want the chance to win, and some meaning, and some daily purpose.
No one cares anymore about the stats of "stock pickers" "day traders" and other arguments for DCAing into index funds and not touching it until you're 65. A 60/40 portfolio. Don't time the market. Efficient market hypothesis. We live in a new world now, and people are willing to gamble. Sentiment is obvious for the average person to get a sense, and they trade on sentiment.
Maybe give people new meaning somehow, or a chance to make unscheduled money other than the slow-as-molasses salary increases.
I don't necessarily call all risky stock activity gambling. At the risk of splitting hairs, it's a little different to buy Tesla stock because of, for the sake of argument, let's say a really bad reason (CEO smart, car go fast), i.e. uninformed, than it is to bet on a number on a roulette wheel.
I think we paint it as gambling because gambling has an aura of naughty judgment about it, as in, "Oh, you're just gambling because you made an uninformed stock purchase." I'd prefer the term speculating or risky stock picking. Gambling, which is banned in many places and is against the law in religious texts, has a taboo because it's addictive. I daresay only a minority of stock trading bros are addicted in that way.
Child rearing is a possible solution—it is our evolutionary “purpose” to reproduce, after all, and most people in the developed world today aren’t doing it.
A bit off-topic, but it’s interesting how this became the de-facto answer to any question related to “meaning of life” in the last 2-3 years in HN/tech circles. I’m not saying you’re wrong, but it’s a bit weird. Like I’m sure everyone knows that? If a person isn’t having a child in their 30s, they either can’t because of multitude of different reasons, or they decided they don’t want to.
Disclaimer: I’m as pro-kid as you can get, just haven’t met a partner who would be on the same page as me yet.
When I was talking about it with my friends, our guess is, people with kids are getting worried. If others aren’t having kids, then their kids might suffer big time in a long run, thus the renewed pressure to keep suggesting the idea to others. Obviously this doesn’t relate to you, just weird how it started in the last few years.
Yes evolution selects for having children survive to reproduce, but that’s not a purpose, that’s just “that which continues, continues”.
> and most people in the developed world today aren’t doing it.
Plenty of species have evolved such that when they sufficiently saturafe their environment and resource carrying capacity, reproduction rates drop through behavior changes based on various signals.
>Child rearing is a possible solution—it is our evolutionary “purpose” to reproduce, after all, and most people in the developed world today aren’t doing it.
I doubt it, that's because to most people it does not feel purposeful, it's a chore. Most people who say it's purposeful are generally the most vocal ones, and I suspect the minority.
The replies are bit harsh. It is a solution to meaningless of life. I am reminded constantly by some of my friends.
But it's also a problem for some. For example, it means moving out of expensive cities, it means worrying about making lots of money (if you live in the U.S.), it means child care is thousands a month, it means health care is thousands a month. It means you have to be responsible and not drink every day. It means potentially not sleeping for a year.
Personally, seeing the stress of my workmates, and how they became more dependent on their jobs, on the shit of the jobs, and how now they're more competitive on the job, and worried... I'd personally choose to write that off.
But I know people who found meaning through child-rearing, as you say!
This is the best answer. From a strictly rational perspective, parenthood makes little sense. The negatives are obvious and intimidating, while the benefits (which are not rational but instinctual) are less clear. Happily, oxytocin is a helluva drug. It will rearrange your universe in the course of an hour, such that all of its substance revolves around a splotchy, squinty little ape.
If you have the math chops, you should really try to get into it just so you can realize you are not going to make a money making algorithm. I got knee deep into it out of boredom during Covid and was able to have the "aha" moment where you realize the best you can do is buy index funds or just long hold companies you believe in that are in your area of expertise.
Extremely solid advice. As someone who has worked at a trading company that makes the big bucks, I can say you (as a single investor) will never consistently beat the market on any remotely interesting instrument. The sheer resources the institutional traders put in is mind boggling. You must understand that you truly are gambling in the face of such a sophisticated opponent. The quicker you understand, the better (hopefully without losing your life savings first). And don't even think about derivatives, you will get eaten up and spat out like you can't imagine.
RenTech was founded by legit signals processing guys who cut their teeth breaking codes for the NSA and basically invented ML for the stock market. They also built the best dataset in the world (at the time) for stock info as a competitive advantage. There's no real way to duplicate what they did today when everyone else is already doing quant trades to take advantage of suckers.
If the gains are huge, it's either temporary luck or they're cheating. You cannot have long term high alpha without either. If you meet a person who can constantly flip a coin heads side up, ask them to keep going and they'll either fail or you'll find the coin is rigged.
I tried for a long time with stocks, then I tried stock options. I eventually moved off to index and treasury futures. No money to be made in stocks, shitty leverage, high fees, LOUSY TAX TREATMENT and to complicate matters further shorting can be problematic. Also no "real" market is open 24h so you really just get to trade open-to-close standard hours. Stocks just have too many things going against you to make any money and thats before you figure your broker is front running you in the first place.
My basic strategy is that the signal/news/data contains no real information beyond whether or not people are buying or selling. When they stop selling I start buying and vice versa. Use your data skills to identify "things that work with regularity" and "things that rarely ever work" while at the same time understanding "literally any strategy works SOMETIMES".
Develop a roughly asymmetric strategy where your average gain is greater than your average loss per trade. The biggest thing you need is to pick some BIG WIN trades and ride them for a large profit. A small percentage of big wins pay for the losers and make the whole thing profitable. Remember that you "Make more money" by trading larger quantities, not by seeking larger moves. You don't "make money" so much as you harvest what the market gives you and if its not giving you close the trade. Your chosen trading system should reflect this.
Size your trades such that if you're betting N shares with $Y dollars now and you take a loss, you're coming back to the table with at least N shares and $Y dollars. Never loose $100 and find yourself in the position of recovering that loss with only $50 to play with. Read about "money management" in gambling for some ideas heres.
Don't be afraid of the short side either as you will make about half your money there. Don't be afraid to bet agains the trend and "call bullshit" on a move - your system should be designed to detect the success rates of these calls and should be looking for those situations.
For me its about using data to make bets where, in the event I win, I win pretty big and in the event I lose, I lose minimally.
USE BRACKET ORDERS FOR ALL POSITIONS OR PERISH.
AUTOMATE YOUR STRATEGY OR PERISH.
ALWAYS TAKE YOUR TRADES OR PERISH.
Making profitable trades here and there is EASY - keeping the money you made on those is the hard part.
EDIT: If you're concerned about "slippage" you have a bad strategy. If the strategy can be undone by a .75pt slip then you need to consider something else.
EDIT: Don't be seduced by the High Frequency Trading bullshit. You don't have the infrastructure for this and the fastest safest Rust code you can write is still connected to some slow retail trading infra here. Plenty of money to be made in Low Freq mode. 20 trades a month per instrument is a lot of trades a month!
Readit News
The problem will resolve itself if (when?) the market crashes.
I remember the run up to the dot-com bust. I was too much of a bumpkin at the time to even know how I would trade stocks — but I listened to an acquaintance go on and on about how much he was making on the market.
At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.
In time, especially after the next bubble in 2008 when I had become more savvy, I came to see this guy as having been in the market at a time when even a monkey throwing darts could look like Warren Buffet.
So too I think are many of today's investors. (I would include myself but perhaps not: I have been won over by Boglism, a balanced portfolio, infrequent trading, etc.)
Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in a few years.
One way to make this sort of advice “not boring” is to apply the advice to 90% of your net worth (or cash flow), but then give yourself permission to “gamble” with the other 10%.
For me, that has fulfilled my personal interest in playing around in the markets for fun while still building/growing a traditional “safe” portfolio at the same time.
I might not have the dates correct, but I remember the general strokes of one guy who decided in like 2017 or something that the market had topped out, the crash was coming any moment now, and he sold everything and called his shot. He missed out on three years of incredible gains, and then the market absolutely _crashed_ in early 2020. He got it right, by a very small amount; he had gotten more selling his positions than he would have gotten selling in march 2020. He buys back in at what ended up being the absolute nadir of the market in like april 2020 or something. The rare success story of timing the market, you love to see it.
And then a few days later, he decides that actually, no, the market still has more to drop, and he sells again. Oh well.
Also: Look at Mainland China since it was opened to (direct) foreign investment in the last 15 years. Overall: The Mainland China economy has grown a lot, but their stock market is a terrible place to invest.
Generally the saw it coming crowd is just sticking it in diversified index and bond funds and doing other things.
At any point or during any stretch of time, one of these sides will be correct.
The fed will juice to keep employment up and tighten to keep inflation down. They will not support stocks at the expense of those mandates
Unfortunately government intervention makes it even more unpredictable when that will be.
You lucked out by mistakingly believing he was intelligent. The classic scenario is when your neighbor is obviously an idiot, making tremendous amounts of money in the market, and you have to explain to your spouse why you can't/won't emulate them. That's when even bright, (normally) level-headed people start piling in before the bubble bursts.
Someone said something like, Everyone thinks they're a genius, when the market only goes up.
Although, one thing different now is the heavy throughout-the-day manipulation of retail investors, effectively making strong social groups and identities around it.
That wasn't a thing when, say, ETrade started, and lots of people dabbled, and found it was hard to lose money, just trading around different companies, with little understanding of how things even supposedly work, much less how things actually worked.
Today, from what I occasionally glimpse, you've got all these supposed skills you're applying as a retail investor/sheep/pawn (including various degrees of snake oil, or thinking you're going to be one of the smarter people on a pump/dump scheme that leaves others holding the bag), and constant social groups where people even self-deprecatingly celebrate huge day-trading losses. Like a wholesome support group that actively encourages you to stick with the bad habit, rather than encourages you to stay sober.
So maybe, when the next big culling comes, you'll have lots of people who can somehow still get margin accounts, and will say, "Blood in the streets, and I'm missing 3 limbs, but, hey, stocks are on sale!" And a thundering chorus of other addicts, and their manipulators, encouraging them.
(Disclosures: S&P 500 ETF with low expense ratio in tax-advantaged, plus an emergency fund that goes nowhere near the market. :)
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All the standard indicators I look at really line up with the idea that a crash should be coming, or should already have happened. Companies aren't valued based on the fundamentals anymore, for example, and yet here we are.
Its starting to feel more like the perpetually increasing market, despite the fundamentals, is a sign of how weak printing and inflation is making the dollar. Stocks can go up when the companies are worth more (ideally because they are producing more), but prices can also go up because the currency used to value the stocks is taking a serious hit.
This sounds like a terrible way to "solve" the problem
Middle of the road, risk managed funds are our best chance of financial success, not individually predicting the market dynamics.
Seeing all kinds of warning signs from family members who never traded or got into crypto until just this past 6 months.
The dotcom crash was huge in terms of the percentage drop
Nasdaq crashed 84%.
https://www.tradingview.com/x/xm2zypvg/
That's just jealousy, Those who sit on the sidelines complain the most. Like I said in my previous post if you didn't see it. I see it as that the barrier to entry for making money has never been lower. Right now, it’s one of the best times in history for anyone to start earning, not just the Wall Street elites. Thanks to AI tools and online platforms, it’s easier than ever. Every week, new tools are being launched, some even claiming returns as high as 400%. Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
They were children in the heyday of abusive loot boxes and cs go gambling.
Turned 18 right around when sports betting apps became legal.
In their early 20s crypto exploded.
Now, apps like yotta prey on them. Stock trading apps make it easy to dump your money on tsla.
Is going to be rough
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Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
How many times have we seen a companies value jump or fall by billions based on a tweet? How many meme stocks have we seen? How many pump and dump SPACs have there been? How many companies have never (and likely will never) made a dime in profit but see their market caps continue to climb?
“Value investing” is dead for most, picking a company that you believe will generate solid long-term revenue is no longer interesting. You need to figure out what is going to 10x tomorrow.
There are things that we could do to slow down the public equity markets and re-establish the relationship between stock price and business fundamentals, but that’s not what almost anyone wants.
In that sense, value investing has always been dead—most people were never interested in that. That's why value investing worked.
The key tenant of value investing is that there exist companies which based on their financial metrics are fundamentally under valued by the market (in opposition to what market price efficiency predicts).
From there, an insane market should provide you with even more opportunities to value invest.
I go to the supermarket and milk is on sale, I buy two. But momo clowns go and see milk is on sale and they try to sell the milk they have on hand back to the store. They don't act like the products they buy have fundamental value, because in many cases that value was inflated wildly beyond justification long before the trader ever got started.
The people who beat the market consistently have information you don't. Instances of people who call major trends before they happen and get rich are likely survivor bias and not genius.
I think the reality is the "don't try to be smart, do these low-risk things because statistically you're too stupid to beat the market" has logic to it, and stats to back it up. But the unspoken part is, "let the rich do that stuff, and their wealth advisors and folks on the golf courses".
So there's an elitist aspect to telling people to back off. We all know people who made a killing on individual stocks, either because they bought them or they worked at a company that issued them.
I've made a killing on 'X' by getting in early and holding over the years. Not one single person in my life knows the details because I want zero responsibility for them getting wrapped up in it, and I know how hard it is for people to be patient and hold when they're chasing a high, I mean profits.
I know people who won big on the ponies or shitcoins, but that doesn't make those smart places to put my money.
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It does require patience, which is admittedly harder to come by when you’re young.
Then I was down, then up, then down.
One morning I woke up and I was so down, I sold out of fear.
Now I'm left with so little I might as well be starting from scratch.
This feels like gambling and here I thought I was smarter than those people that lost in casinos.
If they're talking about an occasional visit to the casino, people will be up front about the fact that they walked into the place with $X in their pocket, and walked out with $Y. Almost always, $X > $Y.
If they're talking about stocks they've bought, people will be incredibly selective, and describe only some of their greatest successes. They could lose money in a rising market, and you'd have to carefully question them to even realize that fact.
Folks you can just buy the S&P 500 and wait. It really is that simple. Money will go down sometimes, up sometimes, down some more, but in the long run it will almost certainly go up. And if it doesn't, the world is crumbling anyway so who cares?
But my index funds are not an interesting topic, imo.
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I’m not doing particularly well, especially mentally, despite having tons of opportunity and successes. Worried about the younger cohorts, but I guess that is a tale as old as time.
I met the son of a family friend today, he's 13, already has an opinion about the Israel/Palestine war and spent $500 in roblox so far, they're not wealthy at all. Back in my days I was stuck in the free to play parts of mmorpgs (or had to beg for months for a $5 monthly membership), playing tf2 (free) and had 0 political ideas or even knew people who cared about politics
I would be more worried about those who by this age didn't develop any interest in geopolitics - it affects them all the same but they typically don't understand why and pick whatever source tells a more compelling story.
Today’s youth are more proactive with their identities these days than we were. We were and remain reactive with our identities. That preference influences what triggers the dopamine hits needed for life.
The drugs of a reactive identity culture are sugar, alcohol, narcotics, work, anything that’s a trope in movies made by boomers. These drugs have consequences that shape the user’s identity. For example: weight gain or burnout.
But the drugs of a proactive identity culture are those that drive the person’s perception of their identity. The live ahead of the consequences. Things like digital social networks, status symbols like shoes, colleges, or jobs, and anything that drives success in those status symbols. Example: Adderall helps the user study, which helps the user get better grades, which opens the door to a better college, which allows the user to flaunt that college association as part of their identity. That doesn’t mean there aren’t consequences to those drugs but those consequences aren’t tropes of modern life just yet because we’re still normalizing their outcomes.
All of this to say: sodas aren’t their thing because soda is “unhealthy” and that drags on their identity.
Doesn't that say more about our jobs that are a) dead-end for most b) financially limiting, with a salary that goes up slowly, if at all, unless you find a new job
People want the chance to win, and some meaning, and some daily purpose.
No one cares anymore about the stats of "stock pickers" "day traders" and other arguments for DCAing into index funds and not touching it until you're 65. A 60/40 portfolio. Don't time the market. Efficient market hypothesis. We live in a new world now, and people are willing to gamble. Sentiment is obvious for the average person to get a sense, and they trade on sentiment.
Maybe give people new meaning somehow, or a chance to make unscheduled money other than the slow-as-molasses salary increases.
I don't necessarily call all risky stock activity gambling. At the risk of splitting hairs, it's a little different to buy Tesla stock because of, for the sake of argument, let's say a really bad reason (CEO smart, car go fast), i.e. uninformed, than it is to bet on a number on a roulette wheel.
I think we paint it as gambling because gambling has an aura of naughty judgment about it, as in, "Oh, you're just gambling because you made an uninformed stock purchase." I'd prefer the term speculating or risky stock picking. Gambling, which is banned in many places and is against the law in religious texts, has a taboo because it's addictive. I daresay only a minority of stock trading bros are addicted in that way.
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Without purpose or a motivator in life people end up getting trapped in mindless rituals. It keeps the reward circuitry in the brain from decaying.
But who needs hobbies, or friendship, or nature, when you have TikTok!
Disclaimer: I’m as pro-kid as you can get, just haven’t met a partner who would be on the same page as me yet.
When I was talking about it with my friends, our guess is, people with kids are getting worried. If others aren’t having kids, then their kids might suffer big time in a long run, thus the renewed pressure to keep suggesting the idea to others. Obviously this doesn’t relate to you, just weird how it started in the last few years.
For what purpose?
> it is our evolutionary “purpose” to reproduce
Yes evolution selects for having children survive to reproduce, but that’s not a purpose, that’s just “that which continues, continues”.
> and most people in the developed world today aren’t doing it.
Plenty of species have evolved such that when they sufficiently saturafe their environment and resource carrying capacity, reproduction rates drop through behavior changes based on various signals.
I doubt it, that's because to most people it does not feel purposeful, it's a chore. Most people who say it's purposeful are generally the most vocal ones, and I suspect the minority.
But it's also a problem for some. For example, it means moving out of expensive cities, it means worrying about making lots of money (if you live in the U.S.), it means child care is thousands a month, it means health care is thousands a month. It means you have to be responsible and not drink every day. It means potentially not sleeping for a year.
Personally, seeing the stress of my workmates, and how they became more dependent on their jobs, on the shit of the jobs, and how now they're more competitive on the job, and worried... I'd personally choose to write that off.
But I know people who found meaning through child-rearing, as you say!
Untrue: e.g., in the US, "Among women and men aged 40–49 in 2015–2019, 84.3% of women had given birth and 76.5% of men had fathered a child."
https://www.cdc.gov/nchs/data/nhsr/nhsr179.pdf
I highly recommend it.
What if we have judged the healthiest of a society on the wrong metrics. And the right one is birth rate?
We might say things are bad for a society if it’s too dangerous or not enough food so the birth rate goes to near zero and as a result it dies.
How is a society that has people being too busy or occupied with other task that neglects reproducing a better society than the latter?
Obvious too much of a birth rate is bad, but too little could also be a sign of an unhealthy environment.
This latter comment of yours was down voted by idiots to the point where it's dead, so I could not respond to it directly.
Anyway, specifics aside, it is actually a good idea - for a variety of reasons.
From what I understand, that fund still does huge gains, and can't get too big.
Note: There's a great podcast on RenTech by Acquired: https://www.acquired.fm/episodes/renaissance-technologies
My basic strategy is that the signal/news/data contains no real information beyond whether or not people are buying or selling. When they stop selling I start buying and vice versa. Use your data skills to identify "things that work with regularity" and "things that rarely ever work" while at the same time understanding "literally any strategy works SOMETIMES".
Develop a roughly asymmetric strategy where your average gain is greater than your average loss per trade. The biggest thing you need is to pick some BIG WIN trades and ride them for a large profit. A small percentage of big wins pay for the losers and make the whole thing profitable. Remember that you "Make more money" by trading larger quantities, not by seeking larger moves. You don't "make money" so much as you harvest what the market gives you and if its not giving you close the trade. Your chosen trading system should reflect this.
Size your trades such that if you're betting N shares with $Y dollars now and you take a loss, you're coming back to the table with at least N shares and $Y dollars. Never loose $100 and find yourself in the position of recovering that loss with only $50 to play with. Read about "money management" in gambling for some ideas heres.
Don't be afraid of the short side either as you will make about half your money there. Don't be afraid to bet agains the trend and "call bullshit" on a move - your system should be designed to detect the success rates of these calls and should be looking for those situations.
For me its about using data to make bets where, in the event I win, I win pretty big and in the event I lose, I lose minimally.
USE BRACKET ORDERS FOR ALL POSITIONS OR PERISH. AUTOMATE YOUR STRATEGY OR PERISH. ALWAYS TAKE YOUR TRADES OR PERISH.
Making profitable trades here and there is EASY - keeping the money you made on those is the hard part.
EDIT: If you're concerned about "slippage" you have a bad strategy. If the strategy can be undone by a .75pt slip then you need to consider something else.
EDIT: Don't be seduced by the High Frequency Trading bullshit. You don't have the infrastructure for this and the fastest safest Rust code you can write is still connected to some slow retail trading infra here. Plenty of money to be made in Low Freq mode. 20 trades a month per instrument is a lot of trades a month!
Historic evidence does not support this statement in the strong sense. Whether it is true, in a weak sense, into the future, is debatable.