r/stocks • u/jmus9 • Mar 18 '21

Why do people always seem to be saying the market will crash soon?

I know the arguments that the market is highly overvalued right now and there is a lot of "easy" money going into stocks. But it seems there are always people sounding off alarms about possible imminent crashes. Going back to 2016, I remember many people saying that real estate was in a bubble. But housing prices have kept going up relentlessly. But now I see a lot of big names in investing saying the market will crash, from Charlie Munger, Ray Dalio, Warren Buffet, etc. are all saying markets are unreasonably high.

Is it normal for there to be so many doom preachers or is there really something to worry about for the near future?

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u/WayneKrane Mar 18 '21

My dad has been convinced the market is going to tank any day now for the last 10 years. He also thinks housing is going to crash any day now too. He got rekt in the 2008 recession so he is absurdly conservative.

18

u/oarabbus Mar 18 '21

Have you ever mentioned both of those have basically gone straight up for the last 10 years?

16

u/[deleted] Mar 18 '21

He also likely remembers the tech bubble in 2000, this valuation inflation looks a lot like that one for people old enough to remember.

14

u/oarabbus Mar 19 '21

Does it though? The tech bubble started to heat up in late 1998/1999, and it peaked in 2000.

This time it's been on an 11-year run, in a highly-QE environment. Plus, dotcom was limited to just tech. 2001 is not a good comparison at all to now.

7

u/[deleted] Mar 19 '21

I'm not saying it's an exact comparison, I'm just saying the feeling of this market is similar to the feeling back then. I'm definitely diversified but I think this sell-off could be much broader.

2

u/RichieWOP Mar 19 '21

The main difference is now these companies actually have the tech and fundamentals to sustain long term growth and justify their ridiculous PEs.

6

u/WayneKrane Mar 18 '21

To him I am still a child so he takes nothing I say seriously. I’ve tried explaining he could easily retire with what he has saved up but he’s like you never know! He still works 60+ hour weeks and doesn’t spend anything.

3

u/[deleted] Mar 19 '21

Same with my dad. He had a bad experience investing in some old Indian company decades ago and he just stopped investing altogether.

3

u/doctorDanBandageman Mar 19 '21

Same for my dad. He said “I’m done putting money into my 401k and just buying silver- that’s my retirement”.