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The Hazards of Asset Allocation in a Late-Stage Major Bubble

125 点作者 monsieurpng超过 4 年前

14 条评论

freddie_mercury超过 4 年前
GMO is a perfect example of HackerNews&#x27;s cognitive bias towards cynical and pessimistic takes and thinking they signal intelligent commentary.<p>GMO&#x27;s assets under management have collapsed by well over 50% over the years as they&#x27;ve been consistently wrong about, well essentially everything, in the markets for 10+ years now.<p>But they wrap up their pessimism in technocratic mumbo-jumbo so it sounds like an objective take and a certain kind of audience eats it up.
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pembrook超过 4 年前
Word of caution to anybody reading this, GMO has been saying this for years...and they will be right eventually of course...but it doesn’t mean you should do anything different with your money.<p>A tale of the worlds worst market timer: <a href="https:&#x2F;&#x2F;awealthofcommonsense.com&#x2F;2014&#x2F;02&#x2F;worlds-worst-market-timer&#x2F;" rel="nofollow">https:&#x2F;&#x2F;awealthofcommonsense.com&#x2F;2014&#x2F;02&#x2F;worlds-worst-market...</a>
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lixtra超过 4 年前
Asset prices are just one parameter in a complex system. Inflation is another. For example commodity prices could inflate so fast that earnings of companies grow into their valuations.<p>Another parameter is whether you’re free to spend your money. Currently in lockdown, all my money doesn’t buy me a dinner with friends in a restaurant (okay, I could pay a hefty fine, so restaurant dinners have inflated 1000%s in price!).<p>It’s not clear to me how the future will unfold and therefore I spread my worth in various assets and consume what may be unavailable soon.
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mensetmanusman超过 4 年前
It’s possible to mistake a bubble forming for intentional inflation.<p>The Fed has pumped a few trillion dollars into the global economy. This will inflate some prices somewhere.<p>The inflation has hit equities and real estate but kept consumer prices mostly intact.<p>The trillions aren’t going anywhere for a long time...
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jgalt212超过 4 年前
It pretty much comes down to how long can Fed keep printing $100B+ a month of money. Nothing else matters.<p><a href="https:&#x2F;&#x2F;www.goodreads.com&#x2F;book&#x2F;show&#x2F;27191691-the-only-game-in-town" rel="nofollow">https:&#x2F;&#x2F;www.goodreads.com&#x2F;book&#x2F;show&#x2F;27191691-the-only-game-i...</a>
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CapriciousCptl超过 4 年前
In 2021, everything&#x27;s a bubble.<p><pre><code> Bonds... 10-year treasury after tax amounts to less than inflation. Holding cash... The USG keeps giving out money for nothing, meaning more money chasing the same amount of goods, services and investments. Index funds... Earnings yields are at all time lows, about 3%.</code></pre>
segmondy超过 4 年前
I agree with the article that we are in a bubble, but what it doesn&#x27;t talk about is about inflation and also that the dollar could be rapidly declining in value, which will cause the price of things to rise. I have witnessed and experienced in my lifetime in under a decade country that had a currency value of 1:1 with USD have their currency lose value and end up at a ratio of 100:1USD. Meaning price of everything goes up 100x. If dollar is falling compared to yuan and say EU, let&#x27;s even say it only falls 5x. That means price of milk can go up to $10, $100k houses can go up to $500k, and $100 stocks $500. Of course the price in commodities are often slower than stocks, but as the stocks go up and &quot;everyone&quot; get&#x27;s reach and some gains are coming out, those gains turn into actually cash that also drive up price of commodities. So as the market melts up, if you stay out, you are going to get very poor. You want to melt up with it, in the future tho, all that money will be worth very less or near the same of what it was worth. Frankly it&#x27;s a big casino, and all one can do is hedge. I see folks beating the article up, but the title captures the environment. &quot;The hazard of asset allocation in a late-state major bubble&quot;. You can do the right thing and completely lose. I suppose one key thing he&#x27;s pointing out is that you don&#x27;t want to get wiped out, have enough to get back in the game.
eloff超过 4 年前
GMO has pounding this drum for years[1][2]. Eventually, they&#x27;ll be right, but not because they were able to call it correctly. In fact given the run-up since they started calling for the bubble to burst you&#x27;d likely still be ahead if the bubble burst tomorrow and stocks halved in value.<p>Now a lot of what they say has some truth to it, and they might actually be right. But they might also continue being wrong for years to come. Timing the market is a fools errand. Good advice is invest mostly by value or underestimated growth stocks, invest continuously, and only with money you don&#x27;t need for at least 10 years. And finally, when the inevitable plunge does come, don&#x27;t sell no matter how bad it gets. You only lose or make money when you sell, before that it&#x27;s just points on paper.<p>[1] 2018 <a href="https:&#x2F;&#x2F;www.institutionalinvestor.com&#x2F;article&#x2F;b1743d0x0ms3yx&#x2F;why-is-no-one-listening-to-jeremy-grantham" rel="nofollow">https:&#x2F;&#x2F;www.institutionalinvestor.com&#x2F;article&#x2F;b1743d0x0ms3yx...</a> [2] 2017 <a href="https:&#x2F;&#x2F;www.gmo.com&#x2F;americas&#x2F;research-library&#x2F;is-the-u.s.-stock-market-bubble-bursting&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.gmo.com&#x2F;americas&#x2F;research-library&#x2F;is-the-u.s.-st...</a>
lumpy28超过 4 年前
I think he is right to mention the unprecendent gap between the economic fundamentals and their financial representations.<p>Plus &gt; The single most dependable feature of the late stages of the great bubbles of history has been really crazy investor behavior, especially on the part of individuals.<p>That trend is even &quot;truer&quot; today, fostered by Robinhood and Co (eToro, Revolut, etc.). The access to markets was not as easy in 2008, limiting the role individuals could play in a bubble.
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akkartik超过 4 年前
The most useful part of this for me:<p><i>&quot;my definition of success for a bear market call.. It is simply that sooner or later there will come a time when an investor is pleased to have been out of the market.. requiring that you get the timing right is overreach. If the hurdle for calling a bubble is set too high, so that you must call the top precisely, you will never try. And that condemns you to ride over the cliff every cycle, along with the great majority of investors and managers.&quot;</i>
lordnacho超过 4 年前
As a former fund manager, I think this is a well written essay by a well respected guy. He gives a lot of pointers to evidence as to why it&#x27;s a bubble. He tells us why it&#x27;s hard to time, but remarkably he gives a relatively tight timeframe (weeks to months) as well as a trigger: widespread vaccination.<p>Of course it&#x27;s just a summary of conventional thought about bubbles, but it&#x27;s a good summary.
hacker_9超过 4 年前
People forget the stock market is just a device to turn money into more money, which creates (and requires) sustained bubbles. There will be a blow off the top from time to time, but this just gives you a chance to buy at lower prices and so get better returns when it ticks up.
kyleblarson超过 4 年前
If pundits like this guy are so wise, why are they 1) Always on CNBC talking about stuff like this rather than trading it and making a killing 2) Still working when they are as old as the author of this article?
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viktorcode超过 4 年前
Thankfully, there&#x27;s a measure of how correct a financial strategist is: fund performance.<p>You believe Epic Bubble is nigh? Then you know how to make the most of it. Don&#x27;t just preach, lead by example.
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