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Goldman predicts the whole market could crash - I think it's an opportunity
01-31-2021, 08:48 AM
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#1
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Recycles dryer sheets
Join Date: Nov 2019
Location: Jersey City
Posts: 265
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Goldman predicts the whole market could crash - I think it's an opportunity
https://talkmarkets.com/content/opti...sh?post=295851
They are being concerned with the recent WallStreetBets driven short squeeze and predict that that if that continues, we're about to see the markets crashing.
Obviously nobody knows the future but unlike most Goldman's predictions (Their continuing push to sell Apple comes to mind: 1, 2) this one seems pretty sound to me so I'm getting ready to buy on the dip  .
The really interesting part in this whole staring match between WSB and hedge funds is its unpredictability. We really don't have historical data pointing to the most probable outcome. Individual investors have never been the power that anyone had to reckon with. Now they are and not in a way anyone could have predicted: driven by collective determination to make a stand rather than individual greed.
I don't necessarily worry about the long term outcome: whatever is happening may shake the current system a bit and move some money around between the market players but in the long run it's probably a good thing. I'd love to end up trading stocks because of the companies underlying valuations and not worry about "innovative financial instruments" designed to disregard that.
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01-31-2021, 09:16 AM
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#2
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Recycles dryer sheets
Join Date: Jan 2006
Posts: 253
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Don't worry, the Fed will print a quadrillion dollar digits and bail everyone out. It's the American way. Logarithmic debt is the way to true economic prosperity.
__________________
Seems to me that the corporation's race to the top is resulting in a race to the bottom for the employee's quality of life. FIRE can't come soon enough.
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01-31-2021, 10:14 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: St. Paul
Posts: 1,850
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If it crashes, it crashes. Capitalism at work. Meanwhile, Goldman Sachs’ economics shop is anticipating 6% GDP growth in 2021, per the recent Exchanges at Goldman Sachs podcast.
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01-31-2021, 10:29 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 28,390
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If the market stays down, due to my put options I will already have several hundred $K of cash converted to stock.  I don't know yet how high my stock AA will rise from its 60% point prior to this event.
If the market goes even lower, what cash do I still have, and how much do I want to throw into the market? I will have to wait and see after all the puts expire.
In the past, I often told myself that if a stock debacle occurred, I should deploy all my reserve to buy, buy, buy. But then, I never really did it. My stock AA was never higher than 80%.
Do I dare do it this time? Liquidating my I bonds to go all in?
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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01-31-2021, 10:31 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 6,187
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How have Goldman's predictions worked out for, say, the last ten years of predictions?
__________________
Ignoramus et ignorabimus
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01-31-2021, 10:39 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 9,621
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Yawn.
I'll refer back to an "expert" who was running DF's money before he passed. Q. Where do you think interest rates are going? A. Well everyone knows they have to go up from these historic lows. That conversation happened in 2013.
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01-31-2021, 10:40 AM
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#7
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Recycles dryer sheets
Join Date: Nov 2019
Location: Jersey City
Posts: 265
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Quote:
Originally Posted by OldShooter
How have Goldman's predictions worked out for, say, the last ten years of predictions?
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It's a good question but it doesn't warrant the time it would take to research: I bet they are 50% right  As to this particular prediction - it just seems like something designed to induce selling which the big guys would love to see. I'm not that inclined to obsess about financial forecasts but I would love to convert some of my treasuries that just bleed money into well priced equities. So I'll be paying attention.
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01-31-2021, 10:42 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 28,390
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Quote:
Originally Posted by tenant13
It's a good question but it doesn't warrant the time it would take to research: I bet they are 50% right  As to this particular prediction - it just seems like something designed to induce selling which the big guys would love to see. I'm not that inclined to obsess about financial forecasts but I would love to convert some of my treasuries that just bleed money into well priced equities. So I'll be paying attention.
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+1
GS may be right, or may be wrong.
If wrong, I do nothing which is the default.
If right, do I dare be bold?
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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01-31-2021, 10:50 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 6,187
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Quote:
Originally Posted by tenant13
It's a good question but it doesn't warrant the time it would take to research: I bet they are 50% right  As to this particular prediction - it just seems like something designed to induce selling which the big guys would love to see. I'm not that inclined to obsess about financial forecasts but I would love to convert some of my treasuries that just bleed money into well priced equities. So I'll be paying attention.
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I'm not a conspiracy guy, preferring Hanlon's razor: "Never attribute to malice that which is adequately explained by stupidity".
Here's a slide I use in my Adult-Ed investing class; three major banks making an interest rate forecast just four months into the future;
__________________
Ignoramus et ignorabimus
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01-31-2021, 12:25 PM
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#10
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 44,564
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Quote:
Originally Posted by NW-Bound
+1
GS may be right, or may be wrong.
If wrong, I do nothing which is the default.
If right, do I dare be bold?
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In my case:
- - - If wrong I do nothing.
- - - If right I do nothing.
- - - Either way, enjoy life, refuse to waste my precious time worrying, and let things happen as they may.
Pretty simple; it's so easy to be a buy-and-hold broad index fund investor.  If things fall apart for my portfolio, I'll have plenty of company.
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01-31-2021, 01:12 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 5,600
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Looking at the "greater fool theory", the hard part is figuring out who are the greater fools. And when willl they show up. I am letting vanguard sort them out.
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There must be moderation in everything, including moderation.
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Goldman predicts the whole market could crash - I think it's an opportunity
01-31-2021, 01:18 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: St. Paul
Posts: 1,850
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Goldman predicts the whole market could crash - I think it's an opportunity
Quote:
Originally Posted by W2R
In my case:
- - - If wrong I do nothing.
- - - If right I do nothing.
- - - Either way, enjoy life, refuse to waste my precious time worrying, and let things happen as they may.
Pretty simple; it's so easy to be a buy-and-hold broad index fund investor.  If things fall apart for my portfolio, I'll have plenty of company.
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Lovely. You might have just written the Serenity Prayer for Bogleheads.
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01-31-2021, 06:36 PM
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#13
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Recycles dryer sheets
Join Date: Sep 2016
Location: Way up North
Posts: 357
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Wasn't GS known for positioning on the opposite side of the trade they've recommended to the "little guys" - or whatever derogatory term they had for retail clients ?
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Retired 9/30/20 at age 61 from Evil Mega Big Oil Corp (EMBO corp)
A day in retirement is like a day on the farm. Every meal's a banquet. Every day's a parade. Every SS & pension check a fortune!
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01-31-2021, 06:43 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 5,515
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This time the next recovery from the upcoming crash will be different.
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A goal without a plan is really just a wish
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01-31-2021, 07:56 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 28,390
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In contrast to most people who outsource their investment to a balanced MF, I am a DIY'er, and pay more attention to my portfolio, even if just to rebalance it.
Same as growing my vegetable garden, or building my DIY solar storage system, I do these DIY activities for fun, and to see what I can learn. I enjoy doing it. It's not for everybody.
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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02-01-2021, 05:19 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Aug 2011
Posts: 2,977
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I think one thing that we will likely see happen is that the regulations regarding this type of nontraditional behavior, will change in order to stamp it out in the future.
If GS needs to fan fears of a market crash to make these changes politically palatable, than that is what they will do.
-gauss
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02-01-2021, 05:42 AM
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#17
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Michigan
Posts: 3,437
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Quote:
In my case:
- - - If wrong I do nothing.
- - - If right I do nothing.
- - - Either way, enjoy life, refuse to waste my precious time worrying, and let things happen as they may.
Pretty simple; it's so easy to be a buy-and-hold broad index fund investor. If things fall apart for my portfolio, I'll have plenty of company.
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+2
I don't think it's a good sign of a top when lots of people are saying Bubble! and Crash! Market tops come as a surprise to most.
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"The mountains are calling, and I must go." John Muir
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02-01-2021, 07:33 AM
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#18
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Thinks s/he gets paid by the post
Join Date: May 2016
Location: Mid-Atlantic
Posts: 1,714
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Quote:
Originally Posted by W2R
In my case:
- - - If wrong I do nothing.
- - - If right I do nothing.
- - - Either way, enjoy life, refuse to waste my precious time worrying, and let things happen as they may.
Pretty simple; it's so easy to be a buy-and-hold broad index fund investor.  If things fall apart for my portfolio, I'll have plenty of company.
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To that last part, when I explain index funds or the two-fund portfolio to people for the first time, sometimes they ask how I can be sure I won't lose everything, I say the only way that would happen would be for the United States economy to completely implode/stop functioning, in which case I won't be any worse off than anyone else, and we'll have much bigger things to worry about than retirement accounts!
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-Looking to FIRE in the mid-2020s, which would be our mid-50s.
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02-01-2021, 07:51 AM
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#19
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Thinks s/he gets paid by the post
Join Date: Sep 2012
Location: Seattle
Posts: 4,194
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To get any more than a yawn from me the market would have to crash 30% and I don't see that in the cards with all of the stimulus.
These times really are different than the old days.
I won't rule out hyper inflation one day in the future though...
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02-01-2021, 07:57 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 16,474
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Quote:
Originally Posted by MRG
Yawn.
I'll refer back to an "expert" who was running DF's money before he passed. Q. Where do you think interest rates are going? A. Well everyone knows they have to go up from these historic lows. That conversation happened in 2013.
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And a lot of smart money has been saying dump bonds since 2009...
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No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 30% bond funds / 20% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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