Goldman predicts the whole market could crash - I think it's an opportunity

kjpliny said:
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.
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A+
What could possibly go wrong ?
 
GravitySucks said:
I imagine there is a difference in the predictions the PR department puts out and the predictions Goldman actually acts on.

I'm willing to bet the ones they act on are usually either correct or so large they become correct. Now if I could only get a notice about what they're going to do tomorrow.
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Again, I am not a conspiracy guy. I see the big picture as this:

Humankind has never developed a model of any complex system that is useful for forecasting. The closest we have come is in weather forecasting, where forecasts beyond a few weeks are no more accurate than using climatological data. Other modeling efforts, like stock market forecasting, economic forecasting, sociological forecasting, etc. show failure after failure. These systems are simply too complex for us to understand, even if at their bottom (like weather) the mathematics is well known. Humankind is like Charlie Brown going after Lucy's football; we have an overwhelming desire to know, so we keep kicking for forecasts and we end up on our a$$es every time.

Think about something trivially simple compared to the economy: the ripples, eddies, and whorls in twenty feet of trout stream. Impossible to forecast even that relatively simple thing despite the fact that we have the underlying mathematics down cold. Or how about some more recent evidence: The hue and cry about pandemic forecast models has faded to nearly nothing as it has become obvious that they are useless. Another thing, you would think, that is much easier that macroeconomics.

Still true, IMO: "The only function of economic forecasting is to make astrology look respectable.” Often attributed to John Kenneth Galbraith but apparently actually from Ezra Solomon, a member of the Council of Economic Advisors during the Nixon administration.

For those interested, I recommend Nate Silver's "the signal and the noise" and specifically the chapter on economic forecasting. https://www.amazon.com/Signal-Noise-Many-Predictions-Fail-but/dp/0143125087
 
OldShooter said:
Again, I am not a conspiracy guy. I see the big picture as this:

Humankind has never developed a model of any complex system that is useful for forecasting. The closest we have come is in weather forecasting, where forecasts beyond a few weeks are no more accurate than using climatological data. Other modeling efforts, like stock market forecasting, economic forecasting, sociological forecasting, etc. show failure after failure. These systems are simply too complex for us to understand, even if at their bottom (like weather) the mathematics is well known. Humankind is like Charlie Brown going after Lucy's football; we have an overwhelming desire to know, so we keep kicking for forecasts and we end up on our a$$es every time...
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It's not our shortcoming. Rather, even simple systems of inanimate objects can be bewildering complex. Look up the 3-body problem. Yes, even something as simple as that can be chaotic.

When we get humans in the loop, boy, there's no way we can predict how some crazy dude is going to act, or what he is going to tweet, and who is going to listen to him. A stock one day, bitcoin the next. :nonono:
 
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OP, I agree with Goldman the stock market could correct. This bull market is historically longest ever (going into some 11 years and counting?), and I believe it is in overvalued territory at present based on historical PE ratios.

I do believe it will suffer a substantial correction as it is now living on borrowed time. I myself am taking any "surge" opportunities that present to lighten up on my own equity positions.
 
My point was that I don't believe Goldman is acting on their press releases as much as trying to influence the crowd with them. And after the fact they are so large and so well watched what they do is self fulfilling prophesy.

**Full Disclosure*** I always keep a
Couple Goldman bonds or CDs in the portfolio so I can tell "Hey that guy owes me money!" when one shows up on TV. Joke goes over big at the barbershop.
 
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NW-Bound said:
It's not our shortcoming. Rather, even simple systems of inanimate objects can be bewildering complex. Look up the 3-body problem. Yes, even something as simple as that can be chaotic.

When we get humans in the loop, boy, there's no way we can predict how some crazy dude is going to act, or what he is going to tweet, and who is going to listen to him. A stock one day, bitcoin the next. :nonono:
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Yes, not to mention covad, China/Aussie trade war, Brexit, floods & earthquakes. It's a hard lift, but once a person comes to understand that the market is best approximated by a random process (just like the trout stream), most puzzling things become clear.
 
NW-Bound said:
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? :p
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That sounds suspiciously like someone trying to time the market.

What has worked exceptionally well for me over the last 30+ years is to not worry about the overall market while placing big bets on exceptional companies for the long term.

Bonds? Maybe when I'm getting close to my deathbed! :LOL:
 
RetiredAtThirty-eight said:
That sounds suspiciously like someone trying to time the market.

What has worked exceptionally well for me over the last 30+ years is to not worry about the overall market while placing big bets on exceptional companies for the long term.

Bonds? Maybe when I'm getting close to my deathbed! :LOL:
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You are new here, so do not yet know that I have announced myself a market timer again and again on this forum. If people do not like it, they can sue me.
The forum admins have not kicked me off yet. :)

Well, maybe more like a frequent rebalancer, and occasionally a tactical allocator.
 
NW-Bound said:
You are new here, so do not yet know that I have announced myself a market timer again and again on this forum. If people do not like it, they can sue me.
The forum admins have not kicked me off yet. :)

Well, maybe more like a frequent rebalancer, and occasionally a tactical allocator.
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Can we make that a class action lawsuit:D
 
CardsFan said:
Can we make that a class action lawsuit:D
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What!?! Is this forum turning into another Boglehead forum? :facepalm:

Dang! I guess I have to quit and go frequent Reddit with the kids now. :(
 
I cashed out a quarter mill on the top. Sitting on a big pile of dough.

More dough to blow!

Gonna help my brother in law and fund the new year!
 
NW-Bound said:
You are new here, so do not yet know that I have announced myself a market timer again and again on this forum. If people do not like it, they can sue me.
The forum admins have not kicked me off yet. :)

Well, maybe more like a frequent rebalancer, and occasionally a tactical allocator.
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Oh, don't get me wrong - I fully support your right to manage your own money as you see fit.

However, the proven and reliable way to build wealth does not rely on market timing.
 
NW-Bound said:
What!?! Is this forum turning into another Boglehead forum? :facepalm:

Dang! I guess I have to quit and go frequent Reddit with the kids now. :(
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Nah, you can stay! Well, as long as you don't mind us quietly pointing at you and snickering behind our hands now and then.... :D

Just kidding! I know you have done well with your investing although I regard that as a miracle for any DMT.
 
I don't just market time. I pick stocks too.

But I am not a DMT, but a CMT. I take a shower daily, well perhaps I skip a day in the winter. I wash my hands frequently even before the Covid scare, and I do not pick my nose in public. ;)
 
NW-Bound said:
I don't just market time. I pick stocks too.

But I am not a DMT, but a CMT. I take a shower daily, well perhaps I skip a day in the winter. I wash my hands frequently even before the Covid scare, and I do not pick my nose in public. ;)
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:ROFLMAO: :ROFLMAO:
 
Could this be a sign?

I have two 16YO grandsons that have brokerage accounts. One of them told me a couple days ago that he was buying shares in a SPAC. Hope it works out.
 
misanman said:
Could this be a sign?

I have two 16YO grandsons that have brokerage accounts. One of them told me a couple days ago that he was buying shares in a SPAC. Hope it works out.
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At least they have the rare saving and investing gene. By the time they graduate from high school, they’ll have learned lessons, the hard way, probably, but lessons!
 
RobbieB said:
I cashed out a quarter mill on the top. Sitting on a big pile of dough.
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spx3.jpg


Which top are you speaking of? :blush:
 

explanation of how call option sellers hedging activity can force buying of appreciated stocks, supporting further price increase. amplifies the underlying movement. leads to instability.
 
All I know is, is that when the stock market does break to the downside, it will have to be down at least 50% to shake out and get rid of all this speculation in the market and I think it will be a longer road to recovery than what we saw after March 2020. When all this happens is anyone's guess.
I am kind of hoping we don't go up too far , too fast from these levels, because some day there will be a readjustment and I would hate to be on the wrong end of that.
 
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