Economy crash =/= stock market crash?

adindas

masonic said:

adindas said:

If you just play a guessing game, prophecy game your chance to get it right is 50% as the inflation is either up or down.

That's not how probabilities work. Outcomes are not always equally likely. e.g. markets will either crash by 80% this year or they will not. We all have our views about the likelihood of that, but we can all agree it isn't a 50% chance.

It is not about Market crash @80%. This is a different matter.

It is about whether the CPI today, whether it will be up or down from the last month reference e.g 8.3%.

The CPI today could only either up or down from 8.3% last month figure so the probability to get it right is 50%.

masonic

adindas said:

masonic said:

adindas said:

If you just play a guessing game, prophecy game your chance to get it right is 50% as the inflation is either up or down.

That's not how probabilities work. Outcomes are not always equally likely. e.g. markets will either crash by 80% this year or they will not. We all have our views about the likelihood of that, but we can all agree it isn't a 50% chance.

It is not about Market crash @80%. This is a different matter.

It is about whether the CPI today will be up or down from the last month reference e.g 8.3%.

The CPI could only either up or down so jyour chance to get it right is 50%.

I was just using the 80% crash as an example of how something with two outcomes is not a 50:50 bet.

The probability of CPI being up is not 50%, the probability of CPI being down is not 50%, and the probability of CPI staying the same is not 0%. Your chance of getting it right is therefore different, depending on which outcome you guess.

Type_45

Zola. said:

Discounts for all 
Party stonks

And here we go.  Cash sucked in from the sidelines.

Type_45

Absolute carnage today!  Please report in and mark yourselves safe, friends.  My portfolio status at close of play is...   green!

SSLN (silver) is up 2.81%
GJGB (gold miners) is up 2.66% (it's fluctuated massively throughout the day)
SGLN (gold) is up 2.84%


Meanwhile, the equities tracker I would normally have been using (VWRP) is down 2.39%.  The FTSE 100 is down 2.12%.


My crypto is down, but overall my portfolio is still in the green.


EDIT:  UPDATED!

masonic

My wealth preservation funds and gold are once again holding up much better than traditional bonds, inflation linked or nominal. My equities are not looking too bad, but they're being flattered by the falling pound.

Type_45

masonic said:

My wealth preservation funds and gold are once again holding up much better than traditional bonds, inflation linked or nominal. My equities are not looking too bad, but they're being flattered by the falling pound.

How does the falling GBP affect SSLN, SGLN and GJGB?

Prism

Type_45 said:

masonic said:

My wealth preservation funds and gold are once again holding up much better than traditional bonds, inflation linked or nominal. My equities are not looking too bad, but they're being flattered by the falling pound.

How does the falling GBP affect SSLN, SGLN and GJGB?

Because two of those are priced in US Dollars and the other (GJGB) is mostly in Dollars of various types.

masonic

Type_45 said:

masonic said:

My wealth preservation funds and gold are once again holding up much better than traditional bonds, inflation linked or nominal. My equities are not looking too bad, but they're being flattered by the falling pound.

How does the falling GBP affect SSLN, SGLN and GJGB?

Those three are all priced in GBP, so some of the gain you see will be from the falling pound. GBP:USD fell about 1.4% today, so you'd still be in the green in USD, but by roughly half the GBP amount. A metals purist might say the funds held their value, but both the dollar and pound devalued.

Type_45

Today's CPI means we'll get more aggressive rate rises, which will kill the economy, which will lead to fiscal loosening, which will lead to a melt up, which will lead to the 80% crash.

Prism

Type_45 said:

Today's CPI means we'll get more aggressive rate rises, which will kill the economy, which will lead to fiscal loosening, which will lead to a melt up, which will lead to the 80% crash.

You have just described the standard cycle which happens over and over again, so far without leading to an 80% crash. I am always expecting a 50% crash in equities at some point but 80% seems to be pushing it.