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Comment by mancerayder | Hacker News Reader

Every single shiller was wrong.

Gold and crypto protect against inflation.

Bonds should be 20-40 percent of a portfolio.

Apple and MSFT and the rest of big tech are safe havens.

It's always a good time to buy a home, as supply is at a generational low and will remain like that for a decade, we will become like Canada so you shouldn't wait to buy.

My favorite one is, you can't time the markets. Quite obviously a lot of people correctly timed the market's trends starting around the end of 2021, and the reasoning was pretty sound. I'm kicking myself today for dismissing them.

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> My favorite one is, you can't time the markets. Quite obviously a lot of people correctly timed the market's trends...

Whoa. Think about it, there are constantly people thumping their chests and posting their theories about how things are under and over-valued, and pretty much everything else (like the world ending). If you think that because some people made a winning bet with their money that timing the market in general is a good strategy, I'd suggest you never play poker seriously.

2010: All this pump is fake. Sell!

2014: All this pump is fake. Sell!

2018: All this pump is fake. Sell!

2022: All this pump is fake. Sell! See, you can time the market.

The funny thing is, it was fake--caused by 20 years of extremely cheap debt-money.

I would agree, there are fundamental reasons that would suggest different outcomes for investments, and that's sort of an illustration of why you can't time the market. Even if you know the truth, and you believe that the market will always eventually reflect the truth, it's difficult to know how long that correction will take.

“The market can remain irrational longer than you can remain solvent.”

We didn't lose twenty or even ten years of gains though; only about one year. So the Cassandras were wrong nine out of ten times.

Remember, every single shiller is selling you their product. A few additional thoughts:

> Gold and crypto protect against inflation.

No insurance policy pays when the house is already on fire.

> Bonds should be 20-40 percent of a portfolio.

If you believed in inflation north of 3%, why the hell would you own bonds?

> Apple and MSFT and the rest of big tech are safe havens.

Megacap tech is still up tremendously from the 2020 lows. Not saying they're going higher, but they've weathered the recent storm pretty well.

> It's always a good time to buy a home, as supply is at a generational low and will remain like that for a decade, we will become like Canada so you shouldn't wait to buy.

This was good advice if you were planning to live in your home you could have locked in rates at generational lows. Sure you were paying up for the house, but your mortgage payments would have been absurdly low. And yes, I'm almost positive over a 15-30 year period you'd be able to recoup your principle.

> If you believed in inflation north of 3%, why the hell would you own bonds?

Inflation protected bonds earning nearly 10%?

I'm not sure how you can confidently make any conclusions about any of this while we're in the midst of it. We're not through to the other side of this downturn yet, so who knows what could win?

My casual observation that I'll probably forget about in a few years and maybe remember the next time a real downturn (I'm too young to have ever paid attention to the economy, economic news, etc. during a downturn) happens is that, most likely, everyone gets scared of the uncertainty and dumps their assets in to cash so they're ready to pay off any debts they have. What happens next is unknown.

> Quite obviously a lot of people correctly timed the market's trends starting around the end of 2021

How many incorrectly timed the markets in 2020? In 2019? Etc.

I felt real smart when I sold my BTC at the ~$18k peak way back when. I even told myself I'd wait til it dropped to $2k before I bought more. Seemed smart back then. Not so smart now. Granted, I still made money, but I left a lot on the table.

With bitcoin you could have bought back in at $3500-6000 and rode it back up in March of 2020, and had a bigger bag in the process (or the same bag plus a bunch of cash). Granted things were really scary then.

I'm the even bigger dummy. I held through that $18k peak and crash in 2018, and still held through the $68k peak and crash last year. Still holding, but could have made way more if I had sold even a piece of it when it hit my target ($54k) instead of waiting for the $100k everyone kept promising was definitely going to happen based on previous cycles. Oops.

My gut said sell at 69k or even much before. I 100% knew 100k was impossible. Truly I expected 75k or so. But I listened to the shills.

Key lesson -- if a shill has good information, take the information. But make your own decision at the end of day. How it fits into your mid/long term goals etc.

Honestly I was expecting 75-80k myself, and was planning to sell a good chunk then (up to 50%). The 100k I was a little less sure about.

But it didn't even get that far. Dropped almost immediately after getting to its ATH, which usually doesn't happen. The world had to shit the bed and take it down with it before that.

> expected 75k or so

Based on what?

The shills

Not OP, but I believe the answer is "on nothing". There is no way to know where it will go. It's just supposition and very specific numbers like this make me cringe hard.

That’s my conclusion after a bunch of losses that could have been gains (not in btc): ease in and out rather than trying to time the market and buy/dump all at once.

> Still holding, but could have made way more if I had sold even a piece of it when it hit my target ($54k) instead of waiting for the $100k everyone kept promising

Why not sell now? Wouldn’t you still make a decent profit?

#diamondhands

> I'm not sure how you can confidently make any conclusions about any of this while we're in the midst of it. We're not through to the other side of this downturn yet, so who knows what could win?

I saw some of the same predictions as GP, they were all about the start, not the middle or end.

"You can't time the markets" doesn't mean it's not possible. It means if you do, it's luck

Timing the market is often read literally, like someone bought or sold at peaks and bottoms. But a lot of people saw the bear markets coming. Whether they sold in November or August, they correctly timed. Buy and hold investors made the wrong move by holding. It was obvious then to many.

Bears have been predicting the next recession every year since 2008, and calling it "obvious" too. The ones who got the timing wrong -- most of them -- slink away, while the ones who more or less got it right will brag for the next decade. So it goes.

But you're using the results of a Pachinko machine to say that some balls knew the right place to land. There have been people pulling money because a crash is coming any day since the start of the bull market. Sure, it's possible to time the market but it's equally possible to make the wrong prediction.

> Whether they sold in November or August, they correctly timed. Buy and hold investors made the wrong move by holding. It was obvious then to many.

In a decade or so I strongly believe my investment will be up significantly from those November numbers. I won't care what happens right now, it literally doesn't effect my plans to withdraw the cash when I retire.

There's a classic scam (I'm sure it has a name, but I don't know it) where the scammer gives out predictions for some stock or other: they pick their (large) group of targets, then send half a prediction that it will rise, and the other half that it will fall. After the appropriate time passes, they are proven right to one half, and wrong to the other.

Then they take the half they got right, and do the same thing again. After a few iterations, their pool of marks is smaller...but they also believe that the scammer is never wrong. (I believe the scammer then tells them they need to put a large sum down—which the scammer will, of course, handle for them...and then absconds with it.)

You're focusing on the ones who got it right, ignoring the ones who got it wrong, and calling it smarts. It's very unlikely to be so. The market as a whole should always be treated no differently than the scammer's entire initial pool of marks.

John Allen Paulos describes this in his book, Innumeracy.

(Excellent book, by the way)

Bob Hope does this in the beginning of "The Lemon Drop Kid," but with horses instead of stocks.

You forget that you have to time the market correctly 2 times. 1 time when selling, and 1 time when buying back in.

Show me the person who can consistently time the market.

The data is pretty clear on this one: even the professional investors that did better than the index in one period, were not able to do the same in the following period.

Buy and hold, there is nothing better. Try to be smart and you will lose.

I know it's read literally, that's why I explained what it actually means

> Quite obviously a lot of people correctly timed the market's trends starting around the end of 2021, and the reasoning was pretty sound.

Surely at any time somebody correctly timed the market.

Yes, when there are both buyers and sellers (which is the definition of a market that clears), there will always be a number of trades that were right, and an equal number that were wrong.

Super low rates and a bunch of time on peoples' hands caused the biggest zero sum game in years. Pump and dump.

No new value created, just people playing musical chairs until the music eventually stopped.

I feel your pain, I was deep in it too and my gut was telling me the way forward. But I ended up listening to the shills, mostly because I'm relatively young and wanted to lean towards more exposure than less.

If it isn't clear to anyone right now. There are no safe assets, there haven't been a lot of options for the last year. Your best bet is to minimize your losses. Hold cash- lose ~7-8% real value. Safe bonds are probably your best bet for the short term or owning a inflation protected business however those are rare and a recession is coming along. I guess there's a case for some risky short bets but that makes the problem worse.

It just feels like there is about to be an asset wipeout across the spectrum - like a forest fire clearing out the forest for new growth.

Don't run to the exits because that's an even worse outcome unless your holding leveraged stock bets.

You can buy $10k of I-bonds per year. That is a safe haven, even if small.

There's a way to effectively get more by gifting

You have to be careful not to do anything illegal with that approach.

I don't think it's illegal. You are holding it within the confines of their online system

Can anybody, or is it just for US people?

US only

> US only

Other countries have their own alternatives. For instance, here in Brazil we have the NTN-B, a federal government bond which can be bought by anyone and currently returns the inflation plus 6% (see https://www.tesourodireto.com.br/titulos/precos-e-taxas.htm which calls it "Tesouro IPCA", with IPCA being our main inflation index). And it doesn't have any "only 10k per year" limit.

> It just feels like there is about to be an asset wipeout across the spectrum

That's generally expected when interest rates rise. Most assets have value now because they ought generate returns in the future -- but you can get interest between now and in the future, and if you can get a lot of that interest now, why would you spend so much on what is still a long way off?

The thing that's different here is you can get some interest now but less interest than the rate of inflation so you are only minimizing losses as your real value is decreasing.

I've been around since before the dot-com crash, and while "you can't time the markets" is true to some extent, some people take it as an excuse to turn their brains off entirely and ignore fundamentals.

Why do you think housing is a safe haven? Interest rates will continue to rise, thus making a monthly mortgage payment more expensive. People can flat out not afford to purchase homes at these levels if interest rates rise. It's simple math.

> Why do you think housing is a safe haven? Interest rates will continue to rise, thus making a monthly mortgage payment more expensive. People can flat out not afford to purchase homes at these levels if interest rates rise. It's simple math.

But if you get your mortgage now, you don't have to worry about those future increases. IIRC, most American mortgages are fixed rate.

yes, but you still risk paying too much, and then if you have to sell for any reason, risk taking a huge loss. Lots and lots of people lost a ton of money in real estate during the 2008 downturn by overpaying and then being forced to sell.

The price of a home doesn't really matter. You're effectively buying yourself a monthly payment. $1M 30 yr loan @ 3% vs 7% is $4,200/mo vs $6,600/mo.

If interest rates do go up a lot, there is a good chance housing will crash, at least proportionally.

All of the points above were sayings, slogans being repeated that we see today are incorrect.

Interesting username, btw!

Markets don't move that quickly, especially housing. It took over 2-4 years the last two times the market tanked.

"Interesting username, btw!"

Ha! Thanks. You should see the @mentions I get on IG. Turns out a lot of people are often mad at the bank...

Edit: Ah, wow I can't read. I need a cup of coffee :)

American fixed rate mortgages are locked in for the life of the loan. If you get an ARM (adjustable rate mortgage) this is not the case. A fixed rate mortgage is a hedge against rising rents and rising interest rates. New landlords buy in at higher rates/higher prices and rents will increase as a lagging factor.

Yes, everything that goes wrong with the house is now your responsibility. Yes, you will pay property taxes. Landlords are not in the business of renting at a loss in cities just yet. Occupancy rates are still high.

Most loans are fixed rate...

There are a few items that make home ownership in the US financially advantageous: * As others have mentioned, most US Mortgages are fixed-rate. (https://www.tandfonline.com/doi/full/10.1080/15214842.2020.1...) * You also have homestead exemptions and associated limits on property tax increases (https://en.wikipedia.org/wiki/Homestead_exemption) * The mortgage interest deduction * The ability to refinance with a lower rate interest rate in the future

For anyone that is not currently a home-owner, I'm afraid you're correct.

The fed can't realistically let house prices fall too far. If they do, a lot of loans would only be partially secured. That would have far-reaching implications, and could potentially leave a lot of people homeless and the banks holding a bag of bad loans.

It would also wipe out a lot of people's savings.

I think interest rates will stabilize in the near future. I don't think they can continue to go up without demolishing the economy.

>It's always a good time to buy a home, as supply is at a generational low and will remain like that for a decade, we will become like Canada so you shouldn't wait to buy.

Sadly, this one hasn't been disproven yet (I hope it will be soon). All we've seen is record home cancellations which may or may not be a leading indicator [0]

[0] https://www.cnbc.com/2022/07/11/homebuyers-are-canceling-dea...

> Quite obviously a lot of people correctly timed the market's trends starting around the end of 2021, and the reasoning was pretty sound.

You mean when some of the Fed officials sold? Sound reasoning, indeed.

The "not timing the markets" is an incredibly privileged take: for many people they are getting hired and fired cyclically -- when markets are high they are getting paid and when markets are low they might not be, and might be taking money out of their savings investments; so if they are doing their best to cost average when they have cash flow that permits they might be losing money.

> you can't time the markets

What is generally meant by this is that you cannot know the future so you cannot know when is the most optimal time to buy or sell.

Now, you can react to trend (eg your “trends starting around the end of 2021”) and sell, for instance. But when are you going to buy again (ie can you know when the bottom is?).

It seems like the only inflation hedge was to short the entire market (Stocks, Crypto, Gold...)

gold and crypto protect against inflation? gold i kinda understand, but crypto? how?

Theoretically, Bitcoin is a deflationary asset, it’s supply is limited.

In practice, crypto is very prone to hype cycles.

> Theoretically, Bitcoin is a deflationary asset, it’s supply is limited

Assets aren’t inflationary or deflationary. Prices are. Prices, denominated in crypto, have inflated through the moon this year as the value of the currencies crashed.

There are plenty of things in the world with naturally or artificially fixed supply. Anyone pitching them as deflationary is talking tripe.

wrong, a true asset of that class would not only limit but actively reduce the number of tokens in circulation afaik

crypto was sold as a deflationary investment, because supply of some crypto currencies is limited, i.e. no more than 21 million bitcoins are planned to be mined in total.

That's the exact reason I have all my Star Trek TNG collectible plates! Only 1000 made baby!

Can I have NFT for one of those?

Based upon my understanding of the current state of NFT's you can make an NFT of whatever you want, even if it's the copyrighted media of someone else.

> because supply of some crypto currencies is limited, i.e. no more than 21 million bitcoins are planned to be mined in total.

But herein lies the trap. While any particular crypto currency may have limited supply, there is theoretically an infinite amount of crypto currency (people can and do create new ones out of thin air when an existing one has run its course). To top it off, these are not productive assets.

yeah, every single "hedge' except oil/gas and real estate failed

real estate has a lot of lag though so you are probably paying above market price for homes today

Bonds were not a good idea because rates were historically low. If you can't time the market then why bonds should not be 20-40 percent of a portfolio?

Thinking you can't time the markets is a fallacious story that buy and hold investors believe in. It may be beneficial, as many tend to sell low and buy high, but it's nothing further from the truth for me.

Assuming someone can time the market, what reason would they have for not cracking into the list of the world’s wealthiest people within a couple decades?

It might be worth distinguishing here between 'some people that can time the market' and 'market conditions that can be timed by some people'.

'You can't time the market' would preclude both, but I think GP is talking about scenario 2 and you are talking about scenario 1.

This one was easy though. Practically everyone was looking around while the pandemic stock market was exploding, realizing that it didn't make sense.

For me, Tesla was the flashing red sign, it's market cap was something close to that of the entire auto industry combined. I had a big expense coming up this year, so I went ahead and sold a bunch of stock in January.

Ya but it hasn't made sense for years. Which is why you can't time it. You just got lucky. Tesla didn't make sense when it was $250/share prior to the stock split. Look where shorting got you.

Selling a stock that you think is obviously overvalued isn't "timing the market." You're just applying market fundamentals. Timing the market would be shorting a bunch of Tesla.

Lack of credit, capacity constraints.

For decades?

Yes. If a strategy can only make $1m a year, you won't become a billionaire from it.

> My favorite one is, you can't time the markets.

Exactly. My favorite one was about Cloudflare stock. Look at the responses in [0] when it was more than $210 per share, For Bitcoin reaching >$60K 'This isn't even close to what will be the all time high.' [1] and I suggested many to run away from the market [2] and one said 'Stock market up 1% today on both this news and decades-high inflation.' which that obviously didn't age well.

So as you can see, it looks like so far I (and many others) were able to time the market and predict the 2022 crash, especially in crypto. [3]

[0] https://news.ycombinator.com/item?id=29355360

[1] https://news.ycombinator.com/item?id=26840880

[2] https://news.ycombinator.com/item?id=29508238

[3] https://news.ycombinator.com/item?id=29752372

Spot-on predictions!

If I predict this coin flip will be heads, and I flip it, and it is heads… does that mean I can predict coin flips? What if I do it three times in a row?

What if I do it 10 times in a row? [1]

[1]: https://youtu.be/rwvIGNXY21Y

False equivalency.

We have loads of information available to us which is correlated with stock market performance.

With enough information about the coin's motion while it is in the air, one might be able to predict a coin flip pretty accurately too.

Your [0] is based on AWS competition, not a Cloudflare fault nor did their stock start falling immediately.

The other three citations are basic speculation from Apr 2021, and 6-7 months ago. Not sure how this counts as “timing” the market.

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