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| ▲ | badpun 4 days ago | parent | next [-] | | I personally have just 20% of my net worth in stocks, as they seem very expensive right now. A crash would allow me to increase my allocation at reasonable prices. | |
| ▲ | ath3nd 4 days ago | parent | prev | next [-] | | With stock prices divorced from reality, the ones who benefit are the having the funds to buy in volume, the gamblers, and the ones hyping the stocks and creating the illusion of profitability and growth. Years ago it would have been unthinkable to have so many unprofitable companies with unclear path to profitablility having such a high valuation, but we have normalized frenzied gambling as a society. The current absolute balloon of a market is about to pop, and sadly, the people who hyped the stocks are also the ones knowing when to jump ship, while the hapless schmucks who believed the hype will most likely lose their money, along with a lot of folks whose retirement investment funds either didn't due their diligence or were outright greedy. In a way, as a society we deserve this upcoming crash, because we allow charlatans and con people like Musk, Zuck and Sam to sell us snake oil. | |
| ▲ | keernan 4 days ago | parent | prev [-] | | Who benefits from high stock prices? Certainly not people regularly buying stocks or stock ETFs/Funds. | | |
| ▲ | Gravey 4 days ago | parent [-] | | I suppose if you’re operating on the assumption that tech stocks are vastly overinflated then this makes sense. Otherwise I would expect the people that are regularly buying these securities would be happy that they’re increasing in value, no? | | |
| ▲ | keernan 4 days ago | parent | next [-] | | No. The 'goal' of investing (e.g. regularly buying) means attempting to own as many shares as possible. That is achieved by buying low and selling high. Buyers benefit from lower prices, not higher. So many investors get this concept wrong. I suppose they get excited because what they bought went up in value and they have a sense of being enriched. But, that is backwards. That is what they want 20-40 years from now when it will almost certainly be the case that prices are not just higher, but much higher, than today. But, when they are buying shares, the goal is to pay the lowest price possible. If I am 20 years old, I am screaming: crash and burn baby! Crash and burn! Gimme those shares at 50% off yesterday's price. | | |
| ▲ | thunky 4 days ago | parent [-] | | > I am screaming: crash and burn baby! Crash and burn! Gimme those shares at 50% off yesterday's price. Sure, but once you reach the point where you have a lot of money in the market you probably won't enjoy watching 50% of it disappear, even if it means your next auto investment is for a nice bargain price. Also, when the stock market crashes usually bad things accompany it. Like a depressed economy and job losses. | | |
| ▲ | keernan 3 days ago | parent | next [-] | | >>Sure, but once you reach the point where you have a lot of money in the market you probably won't enjoy watching 50% of it disappear, even if it means your next auto investment is for a nice bargain price. I assume I am investing to build wealth. That means my goal is to never spend down my wealth. When I retire, I am withdrawing a maximum 4% a year and expect my portfolio to average >6% per year. When I die I will own the largest number of shares I ever owned in my lifetime (assuming for simplicity sake I own a total stock index fund as my sole investment). So, my goal remains to celebrate buying low since I never intend to sell shares (how this is managed upon retirement is a slightly more complex subject, probably involving 'buckets' of assets to cover withrawals so a 50% crash doesn't change the overall thinking that the price of shares is irrelevant to stock that will never be sold). edit: speaking theory when I say "when I retire" because I've already been retired for almost a decade. My portfolio continues to grow (highest ever literally at yesterday's close). | | |
| ▲ | thunky 3 days ago | parent [-] | | > my goal is to never spend down my wealth Never spend it, but you're ok with it being taken from you? You're a special case retiree if you can watch the market take half of your life savings and cheer it on. Especially with a 4% withdrawal rate, which fails a lot of 30 year backtests. > I am withdrawing a maximum 4% a year and expect my portfolio to average >6% per year. When I die I will own the largest number of shares I ever owned in my lifetime. A lot of successful backtests end with significantly fewer shares, too. There are no guarantees here. There has to be some floor where you stop cheering on a market crash, because if it drops low enough for long enough then you are screwed and so are your heirs. Be careful what you wish for. | | |
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| ▲ | ath3nd 3 days ago | parent | prev [-] | | > Also, when the stock market crashes usually bad things accompany it. Like a depressed economy and job losses. It's our own fault for tying the stock market performance to our economy's performance. Why would I, a train worker, should have my pension affected by Sam a
Altman's bad decision making or by Enron's lies and deception. It's our own fault that the stock market is so volatile and that we tie so much of our economy to a financial gambling machine that's become increasingly divorced from reality in the last couple of decades. Like you are putting money on a stock that trades at 1000 on a company that is 10 years away from being profitable? You deserve your money to go poof. | | |
| ▲ | thunky 3 days ago | parent [-] | | > Like you are putting money on a stock that trades at 1000 on a company that is 10 years away from being profitable? You deserve your money to go poof. Who is suggesting that? NVDA trades at 57x earnings, MSFT 37, GOOG 22. The article is about META and they are 27x. These are the big companies that dominate the s&p that we're talking about. I don't think anyone is suggesting to put their life savings into Anthropic. They can't anyway, it's not public. The s&p PE is 30, which is high, but still lower than it was in 2020 before the AI "bubble" started. |
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| ▲ | hdgvhicv 4 days ago | parent | prev [-] | | The ponzu scheme of SPY is great until it stops. 10% of America’s payroll gets lumped into it each month and generational wisdom is you get a 10% ROI despite the economy growing 2%. At some point that will collapse, and it won’t be pretty. | | |
| ▲ | thunky 4 days ago | parent [-] | | > The ponzu scheme of SPY is great until it stops TINA (there is no alternative). Inflation will eat your cash. Bonds hardly generate (real) returns unless you want to take big risks with duration. Real estate is over inflated. Gold is speculative. Crypto is...not real. What's left? | | |
| ▲ | ath3nd 4 days ago | parent | next [-] | | Valuation of companies tied to their real current profits! If a company is unprofitable now, it doesn't make sense and is wholly wrong that its stock is trading 1000x more than other companies which actually turn a profit. The difference from public ownership to public gambling is huge in its impact to society, especially when the markets crashes. | | |
| ▲ | thunky 3 days ago | parent [-] | | So rather that someone auto-investing a slice of their paycheck into a s&p fund in their 401k, they should instead learn how to evaluate company financials so they can pick winners from a non tax advantaged account? This is a losing strategy for the large majority, and it's been demonstrated repeatedly that even professional investors can't beat the market especially after considering fees. https://www.investopedia.com/articles/investing/030916/buffe... |
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| ▲ | idiomat9000 2 days ago | parent | prev [-] | | Shorts om the ponzian pyramids. | | |
| ▲ | hdgvhicv a day ago | parent [-] | | The market can stay Irrational longer than you can stay solvent |
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