How much longer will this bear market go on for?

Prism

Type_45 said:

Prism said:

Type_45 said:

masonic said:

Just to add, I wondered who in particular might be responsible for introducing fairy dust and tropes of the past, and I couldn't not share:

This simply serves to illustrate how much I know.  I've been where most of the posters here are.  I've been that guy who's invested in the stock market and needs to convince myself that it will always be what it has been for the past 40 years.  I've posted those things as you shared and repeatedly refreshed the page as I sought collusion, validation, reassurance. I know every bump on the path of the bull.  I hope it works out well for you.  But if it doesn't, I will buy your bags.  At an 80% discount.

You will probably find that most posters here are neither bull nor bear or in fact have no opinion on what way the markets will move over the coming years. Yet they will still remain invested as their time frames are long - mine for example is hopefully 40+ years. So the only question I need to ask myself is, do I think companies will continue to grow and be profitable over the next 40 years or not? I have no real care what happens in the meantime except for knowing that I have enough set aside or can earn more to cope with significant blips/downturns/crashes along the way - even an 80% crash. 

The only thing that I have no real answer for is complete monetary and government collapse which would wipe out most companies. Oh, and maybe hyper inflation which I can't see happening again in a developed country like ours.

Government collapse?  Where has this come from?

I wish it were true but I don't expect it nor do I recall saying it.

I never mentioned you saying it. I said it would cause a problem for me - everything else is fine. I'm thinking Venezuela, or the Russian communist revolution. I am not sure why you would wish it were true as most people in that country either have little to start with or lose everything when it happens.

Prism

Type_45 said:

masonic said:

Type_45 said:

masonic said:

Just to add, I wondered who in particular might be responsible for introducing fairy dust and tropes of the past, and I couldn't not share:

This simply serves to illustrate how much I know.  I've been where most of the posters here are.  I've been that guy who's invested in the stock market and needs to convince myself that it will always be what it has been for the past 40 years.  I've posted those things as you shared and repeatedly refreshed the page as I sought collusion, validation, reassurance. I know every bump on the path of the bull.  I hope it works out well for you.  But if it doesn't, I will buy your bags.  At an 80% discount.

I've witnessed the Type_45 who posted reasoned comments about VLS and global index trackers, sensible bond allocations etc. went on to foretell a great crash, but counselled that we should probably just stay invested and ride it out. Then, watched on as sense and reason gradually drained away. I hope it one day returns. I hate to disappoint, but if buying opportunities present themselves in the future, I'll be there picking up bargains, not selling out.

Global index trackers, as great as the concept (and reality) is/was are part of the problem.  They have inflated certain companies way beyond where they should be.

Active investors are very capable to inflating shares prices without the help of an index. In 2019 and 2020 the share price of Tesla increased by about 1000% while it was not part of the S&P500. Since it joined at the end of 2020 the share price has gone nowhere

masonic

Type_45 said:

Global index trackers, as great as the concept (and reality) is/was are part of the problem.  They have inflated certain companies way beyond where they should be.

Index funds still only make up a fraction of the market, and owing to the fact they are cap-weighted, they don't inflate 'certain companies', they lift all companies in proportion to their market cap, the relative value of which is determined by active investments. There is a problem in that indexes can be quite unbalanced, with a few companies making up a large percentage of the index; they can be concentrated with companies in certain sectors; and they can fail to represent the economy of the country in which they are listed. For all their flaws, they continue to prove very difficult to better through a more selective approach, though this is more true in some sectors than others.

What you're probably alluding to is money pouring into markets generally. Much of this is through active funds and direct investment in shares. Markets get driven up to crazy valuations, then something precipitates a crash down to cheaper valuations, and the cycle repeats. You can either participate in these gyrations, in which case you should be prepared to get it wrong, or you can ignore them. Either way, it pays not to lose sight of the fact you are becoming a part owner of a broad range of companies.

Type_45

Prism said:

Type_45 said:

Prism said:

Type_45 said:

masonic said:

Just to add, I wondered who in particular might be responsible for introducing fairy dust and tropes of the past, and I couldn't not share:

This simply serves to illustrate how much I know.  I've been where most of the posters here are.  I've been that guy who's invested in the stock market and needs to convince myself that it will always be what it has been for the past 40 years.  I've posted those things as you shared and repeatedly refreshed the page as I sought collusion, validation, reassurance. I know every bump on the path of the bull.  I hope it works out well for you.  But if it doesn't, I will buy your bags.  At an 80% discount.

You will probably find that most posters here are neither bull nor bear or in fact have no opinion on what way the markets will move over the coming years. Yet they will still remain invested as their time frames are long - mine for example is hopefully 40+ years. So the only question I need to ask myself is, do I think companies will continue to grow and be profitable over the next 40 years or not? I have no real care what happens in the meantime except for knowing that I have enough set aside or can earn more to cope with significant blips/downturns/crashes along the way - even an 80% crash. 

The only thing that I have no real answer for is complete monetary and government collapse which would wipe out most companies. Oh, and maybe hyper inflation which I can't see happening again in a developed country like ours.

Government collapse?  Where has this come from?

I wish it were true but I don't expect it nor do I recall saying it.

I never mentioned you saying it. I said it would cause a problem for me - everything else is fine. I'm thinking Venezuela, or the Russian communist revolution. I am not sure why you would wish it were true as most people in that country either have little to start with or lose everything when it happens.

So having pulled the words "government collapse" out of nowhere when replying to my post, you are now applying it to Russia or Venezuela (!) and asking me why I wished it were true of those countries (which I didn't mention) because people there are already poor?

Prism

Type_45 said:

Prism said:

Type_45 said:

Prism said:

Type_45 said:

masonic said:

Just to add, I wondered who in particular might be responsible for introducing fairy dust and tropes of the past, and I couldn't not share:

This simply serves to illustrate how much I know.  I've been where most of the posters here are.  I've been that guy who's invested in the stock market and needs to convince myself that it will always be what it has been for the past 40 years.  I've posted those things as you shared and repeatedly refreshed the page as I sought collusion, validation, reassurance. I know every bump on the path of the bull.  I hope it works out well for you.  But if it doesn't, I will buy your bags.  At an 80% discount.

You will probably find that most posters here are neither bull nor bear or in fact have no opinion on what way the markets will move over the coming years. Yet they will still remain invested as their time frames are long - mine for example is hopefully 40+ years. So the only question I need to ask myself is, do I think companies will continue to grow and be profitable over the next 40 years or not? I have no real care what happens in the meantime except for knowing that I have enough set aside or can earn more to cope with significant blips/downturns/crashes along the way - even an 80% crash. 

The only thing that I have no real answer for is complete monetary and government collapse which would wipe out most companies. Oh, and maybe hyper inflation which I can't see happening again in a developed country like ours.

Government collapse?  Where has this come from?

I wish it were true but I don't expect it nor do I recall saying it.

I never mentioned you saying it. I said it would cause a problem for me - everything else is fine. I'm thinking Venezuela, or the Russian communist revolution. I am not sure why you would wish it were true as most people in that country either have little to start with or lose everything when it happens.

So having pulled the words "government collapse" out of nowhere when replying to my post, you are now applying it to Russia or Venezuela (!) and asking me why I wished it were true of those countries (which I didn't mention) because people there are already poor?

Ok we are getting lost in quotes here. You said that you wished it was true when I referred to a general government collapse. For reference I hope that I never see it in my lifetime. So why do wish it were true? I can't understand anyone wishing for it.

Type_45

masonic said:

Type_45 said:

Global index trackers, as great as the concept (and reality) is/was are part of the problem.  They have inflated certain companies way beyond where they should be.

Index funds still only make up a fraction of the market, and owing to the fact they are cap-weighted, they don't inflate 'certain companies', they lift all companies in proportion to their market cap, the relative value of which is determined by active investments. There is a problem in that indexes can be quite unbalanced, with a few companies making up a large percentage of the index; they can be concentrated with companies in certain sectors; and they can fail to represent the economy of the country in which they are listed. For all their flaws, they continue to prove very difficult to better through a more selective approach, though this is more true in some sectors than others.

What you're probably alluding to is money pouring into markets generally. Much of this is through active funds and direct investment in shares. Markets get driven up to crazy valuations, then something precipitates a crash down to cheaper valuations, and the cycle repeats. You can either participate in these gyrations, in which case you should be prepared to get it wrong, or you can ignore them. Either way, it pays not to lose sight of the fact you are becoming a part owner of a broad range of companies.

Michael Burry has talked on the issue of the damage global index trackers have caused.  Might be worth a read.

masonic

Type_45 said:

masonic said:

Type_45 said:

Global index trackers, as great as the concept (and reality) is/was are part of the problem.  They have inflated certain companies way beyond where they should be.

Index funds still only make up a fraction of the market, and owing to the fact they are cap-weighted, they don't inflate 'certain companies', they lift all companies in proportion to their market cap, the relative value of which is determined by active investments. There is a problem in that indexes can be quite unbalanced, with a few companies making up a large percentage of the index; they can be concentrated with companies in certain sectors; and they can fail to represent the economy of the country in which they are listed. For all their flaws, they continue to prove very difficult to better through a more selective approach, though this is more true in some sectors than others.

What you're probably alluding to is money pouring into markets generally. Much of this is through active funds and direct investment in shares. Markets get driven up to crazy valuations, then something precipitates a crash down to cheaper valuations, and the cycle repeats. You can either participate in these gyrations, in which case you should be prepared to get it wrong, or you can ignore them. Either way, it pays not to lose sight of the fact you are becoming a part owner of a broad range of companies.

Michael Burry has talked on the issue of the damage global index trackers have caused.  Might be worth a read.

It appears I've already debunked his arguments in my previous post. It's almost as if he's just the latest in a long line of active traders to advance the same theory. It's nothing I haven't heard before. The reality is we are nowhere near the point passive money owns enough of the market. He does have a credible argument about derivatives, but only in the context of synthetic and leveraged funds - the type most investors should avoid anyway for the self-evident reasons he gives.

adindas

Type_45 said:

masonic said:

Type_45 said:

If and when such a thing happens in the UK there would be a run on the banks.

And you think there's enough FSCS money to protect everyone?

Why speculate about what would happen when the FSCS has already been in a situation during 2008 where it had to pay out £20.9bn in compensation, £20bn of that freshly printed by the Treasury and lent to the FSCS. It took the FSCS 12 years to repay the loan through recoveries from the failing banks and increased levies on financial institutions. The Treasury can create an unlimited supply of money to back the FSCS and would do so. Anyone under the compensation limit will not lose a nominal penny. The consequences of creating the money will be spread between all those who hold GBP and sterling denominated bonds.

I suppose one of the benefits of driving half the population into poverty this winter is that there will be less demand on the FSCS from savers when your 80% crash happens and the financial system comes crashing down

Because I don't believe the governments (UK & US) can print their way out of what's coming.  I think they've shot their bolt.  This crash will be bigger (IMO) than GFC and Covid.  There will be no choice but to feel the pain, take the medicine, and spend many years playing catch up.

Our leaders and banksters making catastrophic policy errors, only to be bailed out and carry on as they were in a broken financial system, cannot carry on much longer.

When it all comes crashing down all bets are off.  And even if your money is FSCS protected, what would its spending power be like on the other side of this crash?  It could be greatly devalued.  And would be devalued even under your flawless plan of just printing another £trillion to fix the latest crisis.  

I have posted this before: 
https://www.cnbc.com/2022/08/30/jolts-july-2022.html
Job openings top 11.2 million in July, well above estimate and nearly double the available workers

Published Tue, Aug 30 2022.

Nobel Prize-winning economist Richard Thaler mocks claims the US is in recession - and says inflation could fade within a year Fri, August 26, 2022

https://www.yahoo.com/lifestyle/nobel-prize-winning-economist-richard-130151790.html

Key Take away:

• Richard Thaler dismissed US recession concerns, citing low unemployment and lots of job vacancies.
•  The Nobel Prize-winning economist suggested inflation could fade away over the next year.
•  Thaler welcomed wage increases for low-income workers as a way to reduce US inequality

As  you might want to argue with Richard Thaler. You might never know you might be awarded a Nobel Price in economics with your BS nonsense prophecy.
That is the problem when you ask people to assess their own knowledge, where many ordinary people could easily see from their responses they do not even know a very basic or fundamental things about investing, economics and Trading. 

Type_45

adindas said:

Type_45 said:

masonic said:

Type_45 said:

If and when such a thing happens in the UK there would be a run on the banks.

And you think there's enough FSCS money to protect everyone?

Why speculate about what would happen when the FSCS has already been in a situation during 2008 where it had to pay out £20.9bn in compensation, £20bn of that freshly printed by the Treasury and lent to the FSCS. It took the FSCS 12 years to repay the loan through recoveries from the failing banks and increased levies on financial institutions. The Treasury can create an unlimited supply of money to back the FSCS and would do so. Anyone under the compensation limit will not lose a nominal penny. The consequences of creating the money will be spread between all those who hold GBP and sterling denominated bonds.

I suppose one of the benefits of driving half the population into poverty this winter is that there will be less demand on the FSCS from savers when your 80% crash happens and the financial system comes crashing down

Because I don't believe the governments (UK & US) can print their way out of what's coming.  I think they've shot their bolt.  This crash will be bigger (IMO) than GFC and Covid.  There will be no choice but to feel the pain, take the medicine, and spend many years playing catch up.

Our leaders and banksters making catastrophic policy errors, only to be bailed out and carry on as they were in a broken financial system, cannot carry on much longer.

When it all comes crashing down all bets are off.  And even if your money is FSCS protected, what would its spending power be like on the other side of this crash?  It could be greatly devalued.  And would be devalued even under your flawless plan of just printing another £trillion to fix the latest crisis.  

I have posted this before: 
https://www.cnbc.com/2022/08/30/jolts-july-2022.html
Job openings top 11.2 million in July, well above estimate and nearly double the available workers

Published Tue, Aug 30 2022.

Nobel Prize-winning economist Richard Thaler mocks claims the US is in recession - and says inflation could fade within a year Fri, August 26, 2022

https://www.yahoo.com/lifestyle/nobel-prize-winning-economist-richard-130151790.html

Key Take away:

• Richard Thaler dismissed US recession concerns, citing low unemployment and lots of job vacancies.
•  The Nobel Prize-winning economist suggested inflation could fade away over the next year.
•  Thaler welcomed wage increases for low-income workers as a way to reduce US inequality

As  you might want to argue with Richard Thaler. You might never know you might be awarded a Nobel Price in economics with your BS nonsense prophecy.
That is the problem when you ask people to assess their own knowledge, where many ordinary people could easily see from their responses they do not even know a very basic or fundamental things about investing, economics and Trading. 

Mr Nobel Prize doesn't know that employment figures are a lagging indicator of a recession... Perhaps they should give his Nobel Prize to me.

The employment numbers are just noise. Productivity numbers are the signal. And productivity was down by a record number last quarter.




Revisions confirm steep decline in U.S. productivity in second quarter

The decline in productivity, against the backdrop of fairly strong job growth, is likely unsustainable. That has made economists expect that hiring will slow down in the coming months. 

U.S. worker productivity plunged in the second quarter, leading to the largest year-on-year decline on record.

https://www.reuters.com/markets/us/revisions-confirm-steep-decline-us-productivity-second-quarter-2022-09-01/ 

Alistair31

A very interesting link below

https://corporate.vanguard.com/content/dam/corp/research/pdf/how_america_innovates_megatrends.pdf