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Is there any doubt left...

Discussion in 'Investment and Retirement Planning' started by chrisreedrules, Aug 7, 2017.

  1. killbilly

    killbilly Vocals, Lyrics, Triangle, Washboard, Kittens

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    Been considering some of this lately, as I have a considerable investment riding it out right now.

    There's gonna be a Black Swan or something - possibly this b.s. with Trump vs. The Fat Kid, or something else, but...yes...unfettered growth is unsustainable. I find these short, sharp drops followed by record highs to be irrational, but the only way I can explain that is to say my gut says that's irrational. There are clearly nuances that I don't get, which is why I pay people smarter than I am to handle this stuff for me.
     
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  2. A80TRACON

    A80TRACON Well-Known Member

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    I converted all of my money to North Korean Won
     
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  3. bucksmith

    bucksmith Did you lock the doors?

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    You guys seems reasonably smart. Can someone tell me in dummies terms what this bond bubble is and how it would affect my family if it bursts?
     
  4. gotWXdagain

    gotWXdagain Highly Visible Member

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    An asset is selling at a price higher than it's tangible value, and when the correction occurs you'll lose money. ;)
     
  5. wheelsup

    wheelsup Well-Known Member

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    Bond values go up during a bear market
     
  6. gotWXdagain

    gotWXdagain Highly Visible Member

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    But is it a bear market right now?
     
  7. wheelsup

    wheelsup Well-Known Member

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    Well you didn't really answer his question and weren't clear on your response. If a 'correction' happens bonds go up in value which is what confused me about your comment.
     
  8. gotWXdagain

    gotWXdagain Highly Visible Member

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    A correction can happen to the price of anything. Or are we meaning to apply it only to the stock market?
     
  9. wheelsup

    wheelsup Well-Known Member

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    I would just be more specific when responding to a question like you did, as the person asking doesn't appear to have much background knowledge. You don't want him assuming one thing or another. IMO.
     
  10. NovemberEcho

    NovemberEcho Well-Known Member

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    If ive learned anything from this site, it's never to take financial advice from pilots. I'm going all in.
     
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  11. Zapphod Beblebrox

    Zapphod Beblebrox Well-Known Member

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    Mr. Market is in his manic phase....Soon he will be depressive and he will want to sell you his stocks for pennies on the dollar. "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." Warren Buffet
     
  12. Zapphod Beblebrox

    Zapphod Beblebrox Well-Known Member

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    At the last Berkshire Hathaway annual meeting Warren Buffet said the current state of interest rates are off the charts historically. There has never been a time in history when so many countries have had such a large sovereign debt load. No one knows just how this debt load will be dealt with.

    Warren says "no one has seen this movie before."
     
  13. Crop Duster

    Crop Duster UNSUB

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    All that debt that caused the big explosion in '07-'08? That didn't go away. It just got pushed back into dark, dusty corners in the basement so folks could pretend it wasn't still there.
    Also, many investors, and even some companies, seem lately to be making decisions based on narrowly-conscribed, industry-specific data points with an apparent lack of consideration of the macros that encompass those specific industries. Sound familiar?
     
    Last edited: Aug 26, 2017
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  14. Zapphod Beblebrox

    Zapphod Beblebrox Well-Known Member

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    Here is one from Bloomberg entitled the "Minsky Moment." It's that short time period when the markets and the world recognize that the liquidity party is over and some countries are going into default.

    In his theory on financial markets' fragility and instability, the late Hyman Minsky argued that "from time to time, capitalist economies exhibit inflations and debt deflations which seem to have the potential to spin out of control." Following the 2008 crisis, he inspired the term "Minsky moment" to describe a sudden market collapse that follows the exhaustion of credit.

    https://www.bloomberg.com/view/articles/2017-07-05/keep-eye-on-sovereign-debt-for-next-minsky-moment
     
  15. Crop Duster

    Crop Duster UNSUB

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    Sure. But never underestimate the power of greed-infused denial, self-delusion, and the madness of crowds. The events of 2008, and the causes behind 2008 were obvious to some of us for at least a decade before 2008. It didn't happen 'til 2008 (2007, really) because many, many people were alternately or concurrently very ignorant, very blind, or very suggestible and gullible for a long, long time playing a game of bigger fool. The execs at the big banks had no idea what they were selling, and their investors had no idea what they were buying, but the bigger fool game went on funding the Emperor's sartorial finery for at least a decade. Herd mentality is a very, very dangerous thing when the cowboys are drunk. In the end, the big banks just flat out lied, screwed their chumps (investors and taxpayers) and screwed each other. They didn't care because they didn't have to... and they still don't. It will always be the masses that get splattered with what results from the Emperor's lack of underwear. And it will always be the masses' fault for kissing the source of their soiling despoilment. In my humble opinion, we are in for a rough ride. There's still a lot of murky, nefarious debt out there. But worse, Productivity Growth (perhaps the only economic number that really matters) hasn't really budged since around 2004. In fact it's currently at an almost all time low. That's unnerving. If nothing else, it means that the market valuation increases of the last several years are phantom and based almost entirely on human psychology ... i.e. greed-infused denial, self-delusion, and the madness of crowds. Real numbers will always out. Even after what we should have learned in '08, have little doubt this is still just another poker game; When you're sitting at the table and you don't know who the patsy is, it's you.
     

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