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.
>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.
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.
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.
> “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.
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.
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.
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?
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.
When drive into my neighborhood downtown areas, I still see 'hiring' boards at lot of places with a healthy % advertising higher than minimum pay hourly rate. At the same time I also over heard complaints at grocery & super markets on how things are getting costlier. An elderly gentlemen was complaining how he used to get 3 items but now gets only 2 for the same price. Even as a layman, I think the high employment rates and healthy housing/stock markets mean there is lot of money in the market which is driving demand which in turn driving inflation. With Fed tightening up interest rates, money may stop flowing into the market yet and hence ease the demand eventually inflation. A likely side effect is companies have no money to fund growth and hence recession (and job cuts etc.). Next one year is going to be tight.
However, its still a stretch to say the stock market will crash, stay flat etc. etc. I think these predictions are more media created (they are excellent click bait) than actual warnings from genius investors. For example, if you follow Michael Burry's tweet it's more of a rant or running commentary (combined with partisan view point) than doomsday predictions.
The bigger problem in my opinion is partisan politics is stealing attention from more important problems. Dems are wrong with the number of freebies being thrown in but Reps are also wrong ignoring climate change (or kicking up the abortion repertoire). The checks and balances thing is not working currently.
I don't know if it'll last a decade or only be flat, but my local city has lost a lot of upper end clothes stores and even a burger king. The high street has well and truly died and if even BK can't survive that's a bad sign
> “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,”
Is there a resource that has the chart between ’66 & ’82 so I can have a look at what it was like?
If interest rates get high enough, putting money in bonds or even CDs will start to get appealing for sure. That used to be the primarily saving mechanism for consumers before policy required us all to speculate on stocks.
Once you learn about Paul the octopus, it puts all off these predictions into perspective. Predictions have low reputations costs when wrong because the public will just forget about it. If he’s right, he’ll remind us at every chance he gets.
https://en.m.wikipedia.org/wiki/Paul_the_Octopus
Personally, I wish it was as rewarding building or creating something as it is to invest in the stock market over the past decade. If you have capital it makes more sense to put it into stocks than opening a coffee shop or computer repair shop, etc. If the stock market stops paying out maybe we'll go back to trying to create value instead of profiting from value created by others.
Look, at a fundamental level, the stock market is a tool for letting people put money into risky ventures without them actually experiencing consequences for that risk.
Given the extent to which the nature of information has changed, I'm comfortable no longer letting this be a driver of economic growth. You want to put money in a thing in the hopes of getting more money, fine. But do your homework -- if they screw up, yes, YOU have to pay.
[+] [-] matt_s|3 years ago|reply
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...
[+] [-] coldcode|3 years ago|reply
[+] [-] sb057|3 years ago|reply
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.
[+] [-] behaveEc0n00|3 years ago|reply
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.”
[+] [-] bidirectional|3 years ago|reply
[+] [-] mmastrac|3 years ago|reply
[+] [-] spaceman_2020|3 years ago|reply
I just found out that there's a new ETF being filed that tracks trades by democrats and republicans.
Probably beat the market easily
[+] [-] impulser_|3 years ago|reply
They try too hard to predict the market, when in the long run if they just stayed long they would have done better.
[+] [-] mccorrinall|3 years ago|reply
So, he was always waiting for this and this time he gets green numbers big time.
[+] [-] JKCalhoun|3 years ago|reply
[+] [-] daniel-cussen|3 years ago|reply
[+] [-] kevin_thibedeau|3 years ago|reply
[+] [-] fullshark|3 years ago|reply
[+] [-] melling|3 years ago|reply
https://finance.yahoo.com/news/super-bubble-yet-burst-jeremy...
[+] [-] chiffre01|3 years ago|reply
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...
[+] [-] melling|3 years ago|reply
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…
[+] [-] greenhatman|3 years ago|reply
[+] [-] jxf|3 years ago|reply
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...
[+] [-] jibe|3 years ago|reply
[+] [-] tootie|3 years ago|reply
[+] [-] 2OEH8eoCRo0|3 years ago|reply
[+] [-] mvc|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] fny|3 years ago|reply
[+] [-] dkrich|3 years ago|reply
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.
[+] [-] throwoutway|3 years ago|reply
[+] [-] jhickok|3 years ago|reply
[+] [-] Workaccount2|3 years ago|reply
The fed is fighting to undo the QE it over did during the pandemic
[+] [-] SantalBlush|3 years ago|reply
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.
[+] [-] 2OEH8eoCRo0|3 years ago|reply
[+] [-] treis|3 years ago|reply
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.
[+] [-] mountainriver|3 years ago|reply
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
[+] [-] vsareto|3 years ago|reply
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.
[+] [-] CSMastermind|3 years ago|reply
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?
[+] [-] jawns|3 years ago|reply
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.
[+] [-] kory|3 years ago|reply
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.
[+] [-] jdhn|3 years ago|reply
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.
[+] [-] mikeodds|3 years ago|reply
[+] [-] seshagiric|3 years ago|reply
However, its still a stretch to say the stock market will crash, stay flat etc. etc. I think these predictions are more media created (they are excellent click bait) than actual warnings from genius investors. For example, if you follow Michael Burry's tweet it's more of a rant or running commentary (combined with partisan view point) than doomsday predictions.
The bigger problem in my opinion is partisan politics is stealing attention from more important problems. Dems are wrong with the number of freebies being thrown in but Reps are also wrong ignoring climate change (or kicking up the abortion repertoire). The checks and balances thing is not working currently.
[+] [-] 2OEH8eoCRo0|3 years ago|reply
From another article on '66-'82:
> The Dow went sideways, but the S&P actually earned a respectable 6.8% return in that time.
6.8% is hardly apocalyptic. The S&P 500 usually averages 10% over long timescales.
His former hedge fund also delivered an annual average rate of return of 30% from 1986 to 2010. What an absolute unit.
[+] [-] nprateem|3 years ago|reply
[+] [-] max_|3 years ago|reply
Is there a resource that has the chart between ’66 & ’82 so I can have a look at what it was like?
[+] [-] fullshark|3 years ago|reply
[+] [-] bigmattystyles|3 years ago|reply
[+] [-] tppiotrowski|3 years ago|reply
[+] [-] iforgetti|3 years ago|reply
[+] [-] _ea1k|3 years ago|reply
[+] [-] jrm4|3 years ago|reply
Look, at a fundamental level, the stock market is a tool for letting people put money into risky ventures without them actually experiencing consequences for that risk.
Given the extent to which the nature of information has changed, I'm comfortable no longer letting this be a driver of economic growth. You want to put money in a thing in the hopes of getting more money, fine. But do your homework -- if they screw up, yes, YOU have to pay.
[+] [-] pydry|3 years ago|reply
Stocks wont do well, but that asset class could still be stocks.
[+] [-] smm11|3 years ago|reply