https://markets.businessinsider.com/news/stocks/stock-market-outlook-dietrich-riley-spx-bubble-crash-recession-economy-2024-3
Paul Dietrich of B. Riley Wealth said the stock market "bubble" was about to burst and could slash the S&P 500's value in half.
Nassim Nicholas Taleb, the author of the economics book, The Black Swan, had a great take on this. I'm paraphrasing but he was like how Economists can go in the news, make a prediction, and if they're wrong, nothing. But if they're right, they become a staple of business news and sell out all of their books. So financially, it's better to make a lot of predictions and hope to win the "I guess right" lottery.
Jesse Livermoore said “the markets act, and the papers look for the explanation.” It was true 100 years ago and it’s true now.
That's like me at the stop light trying to predict when it will change. "1, 2, 3... change".."1, 2, 3........change". "1, 2, 3 change" light changes. I feel smug in my elite ability to predict the change.
You’re very correct. The market is very much a predator and prey relationship, and the justifications afterwards are for the fans at home. I once saw the whole market tilt because one man (Bill Hwang) lost his leveraged multibillion dollar position.
There's an old scam that runs the same way. On a 2 outcome wager like which team wins a game send 500 people prediction team A wins and 500 people team B wins. For the 500 people who got the right one send 250 team C wins and the other 250 team D wins. By the time you're down to ~7 people they all received 7 winning predictions in a row, then you ask them for a bet on a 'sure thing' for the 8th game.
The crazy thing about speculative economy is that by releasing this article, businessinsider might scare some of the investors and so create a self-fulfilling prophecy.
I've always thought that about recession predictions. After all, economists measure consumer confidence and define the meaning of the results as
if consumers are optimistic, they will spend more and stimulate the economy, but if they are pessimistic then their spending patterns could lead to an economic slowdown or recession.
It's clearly reasonable to think that publishing panic-inducing articles like "stock market will soon CRASH 49%!!" would decrease consumer confidence.
I think that's pretty much what the foundation series was about, predicting a system changes it.
That's what they are paid to do. Big fund takes a short position, then pays analysts to produce stories to make their short position profitable.
Ahh, Business Insider, the most eager place in the world to let managers talk their book and frame it as news.
lol. Unprofitable companies are getting billion dollar IPOs and we are shocked at this prediction?
He has slightly better weapons and armor but if you do manage to take him down he does have more loot as well.
I'm not going to do the math, but I'm pretty sure you can't. The forces required would probably destroy your body before you left the ground.
pushes up glasses ACSHUALLY. Ok, JK.
But for real, DCA usually implies one has a choice. "Do I lump sum this or DCA?" In this case, I don't have a lump sum, I just add money from my paycheck every month.
If I did have a lump sum to put into the market, I would not DCA since DCA does worse ~66% of the time. Most of the time, one would be better off putting the entire sum into the market all at once.
Dollar cost averaging, as in contribute regularly, you’ll buy when things cost less you’ll buy when things cost more it won’t matter over time.
Just keep contributing and the numbers will go up over time.
We’ve been due for a recession since 2020–the drastic pullback for several months at the onset of COVID was hardly a “recession,” more like a blip. I’ve finally stopped saying it’s imminently going to happen, which maybe means it’s going to happen now.
It's bad economics to dismiss a recession as if it didn't happen just because it wasn't as severe as you would like. Many recessions are mild and little more than a "blip", that's completely normal and ignoring them will only lead you to faulty conclusions about what is actually going on with the economy.
My comment was mostly intended as a joke (like me being bullish is going to make the market move in the other direction), but I do think that what happened in 2020 was artificially can-kicked down the road by unprecedented government intervention in the market. So it’s less of a “severe as I’d like” scenario and more of a “curtailed by massive global intervention in the economy.” Maybe that staved it off forever and we will have a soft landing? Possible, but I don’t think so.
We've been pumping too much money into the economy. Where do you think most of it ends up? Not in the pockets of working people.
Not "the economy", just a few select large corporations and the financial industry. It's not like your uncle's bakery is exploding right now.
This "elite strategist" is welcome to short the S&P 500 if he's so confident and not just trying to get attention. The net of all people with money in the stock market disagree with him so he could make some good money if he's right.
Curious, isn't it, that recession talk is coming back right when an election is heating up...
Still waiting for that padded recession the news mentioned a month ago. Padded for the rich investor assholes, but not for the average American.
AI and related companies are here to stay for the most part. Overvalued in the short term but not in the long term, as again, this stuff is going to stay.
They're not nearly making the money that is being put in yet. It's a giant bubble for now.
The internet was here to stay as well. https://en.wikipedia.org/wiki/Dot-com_bubble
And yet I see a huge difference, as most of these current overvalued companies are solid. They might be overvalued in short term, as the upcoming revenue doesn't reflect the huge pile of investor money yet, meanwhile the dot-com bubble was mostly build on companies without any real value behind. It will get a short drop off at some point because of disappointed investors, but no bubble. AI will replace a ton of jobs and companies will want a piece of this money pile and they'll keep investing into it.
And yet I see a huge difference, as most of these current overvalued companies are solid.
No they are not. They are losing far more money than they are making. They are 100% running on VC funding made possible by cheap loans. Once inflation hits too hard this will all crash.
We do not disagree that AI has a future, however currently AI is not yet automating away all these workers. It's still not used very often in professional settings aside from programming. And it's nowhere near capable to replace humans yet.
AI will replace a ton of jobs and companies will want a piece of this money pile and they’ll keep investing into it.
Current AI companies are not the be all end all. In one year time multiple startups managed to beat OpenAI's GPT4 model. The head start companies currently have is not that big. If the market crashes another company can easily take over. Nobody uses Netscape and Yahoo anymore either.
What companies are you even talking about? Certainly not those in the S&P500 then, this is all about. Of course this is no golden rule, but a few exceptions don't mean bubble.
AI is now integrated in people's office packs and into every coffee machine. It's also already used by a lot of people, students write their thesis with them. People buy AI images from high quality AI sources. Music will be replaced next. Video is in line.
If anything, large companies like Google, Meta and Microsoft, have made sure no startup will ever catch up on this ever again. In AI image and video creation, the gap is widening already, as large companies wall off their sources, have more money for bigger servers and only provide those services by paying. Any remaining ones currently free, will cost money in near future, once people got hooked. No startup will have access to those huge data piles of the big players, who already out speed any smaller competitors.
As we speak those big lobbies bring laws in place, to stay at top. Like overlay pricey regulation no startup can maintain etc.
Then you have all the hardware and service companies managing this for the big players, they have value behind to a certain level of course. If say Meta for instance, cancels their Nvidia order, sure it hurts, but it's not a dot-com total failure.
AI is now integrated in people’s office packs and into every coffee machine. It’s also already used by a lot of people, students write their thesis with them. People buy AI images from high quality AI sources. Music will be replaced next. Video is in line.
Yes but who pays money for them? This is exactly what i mean. Just like with the early web, companies are providing "free" services using VC funding. If that dries up who is going to fund these fun enterprises?
Nvidia is a key player here that they will certainly survive the fall, but OpenAI and others are the first to get cut when there's a crisis. They make no profit, yet they cost money
Corporations want the cheapest solution. AI is the cheapest solution for many existing human job positions. Who will pay the humans for their inferior services?
So more profit for the companies. That's what capitalism does and country create laws to suck out taxes from companies. At least they should. It all ends with UBI, but meanwhile even AI companies need a lot of supervision and therefore workers, as the results aren't perfect. I don't see how AI is incompatible with capitalism.