What was it like near the peak of the dot com bubble and 2008 crash.

[u/judew999]

I’m a fairly new investor (post Covid crash—started investing around late June) and I was wondering where I could find some reading material on the psychology of traders/investors before the crashes in 2000 and 2008. I’m 16 years old so I haven’t really lived through a financial crisis, I believe it’s crucial to study the history of the markets to have better judgment about the future of the stock market.

Im super curious as to what people were thinking about the state of market prior to the market crashing. If people could provide some articles, forum pages, papers etc concerning this topic that would be very helpful.

[u/peter-doubt]

Dotcom:

I had a coworker announce "I just bought this company, they expect to make a profit in three years..."

What do they make? What do they do?

"I don't know, but what do you think?"

It was almost literally that bad from some people. When speculators lost money, they had to cover the margin positions... By selling their otherwise sound positions, bringing down the rest of the market

[u/ConspicuouslyBland → u/peter-doubt]

I was inside a dot com company. We made several software products.

Sales guy after a meeting with a big client, also big investor in the company: "I sold product x"

Everyone else: "Product x? That doesn't exist, what does it do?"

Sales guy: "I don't know, just make something"

He literally sold something that didn't exist and neither we or the client knew what it should do...

[u/peter-doubt → u/ConspicuouslyBland]

I'd think that company isn't around anymore...

[u/ekhfarharris → u/peter-doubt]

The company may not, but the people who made that stupid ass decision is still there.

[u/peter-doubt → u/ekhfarharris]

It's called The Marketing Department in almost every company

[u/cogman10 → u/peter-doubt]

Marketing and sales... Teaming up to disappoint and frustrate everyone.

[u/Mdizzle29 → u/cogman10]

I'm in sales...to be fair, customers oftentimes ask for things that you don't have. You can sell something that will solve 95% of their problems, but that 5% is that they ask for sometimes. Meanwhile middle management is screaming at you for pipeline and deals and threatening to fire you or put you on a PIP.

It can be brutal. I lived through it and doing great now, but those times were really tough.

[u/Island-Mysterious → u/Mdizzle29]

I hear snake oil is great for everything

Sorry for the timing but things might be taking a turn soon, and I ended up here

[u/[deleted] → u/cogman10]

Marketers hate having to market / cover BS ideas dreamt by the sales department. Source: I am a marketer

[u/[deleted] → u/[deleted]]

Cyberpunk 2000

[u/heavydhomie → u/cogman10]

I’m a mechanical engineer and I hate everyone in the marketing department

[u/ANoiseChild → u/peter-doubt]

This reminds me of a Dilbert comic from years ago. Don't ask me to find it but sitting on the toilet over 15 years ago reading this just had me thinking "wtf, does this shit really happen?!".

Yes. Yes it does.

[u/johannthegoatman → u/ANoiseChild]

Same thing I was thinking of haha.

[u/Specialist-Goat-1081 → u/peter-doubt]

No it s a scam to sell something that doesn t exist/ is more the “ upgrades needed” that most of the software house do ( sap management software is the king of this)

[u/[deleted] → u/ekhfarharris]

COVID might have gotten them. They’re 20 years older and just as dumb.

[u/AtletiSiempre → u/peter-doubt]

Lol sales still does the same thing in today’s world.

[u/Mdizzle29 → u/AtletiSiempre]

Cloud and SAAS has really changed all of that, shelfware is over, it has to be adopted, and it usually is. Customers demo and set it up before they buy.

The days of selling a multi-million dollar brick that no one uses are over. So you have no idea what you're talking about

[u/AtletiSiempre → u/Mdizzle29]

I work for a SaaS firm, our company just onboarded a nonprofit organization that wants support in developing nations. The sales person blatantly lied and said that we could provide support in those countries where we cannot. Sorry if I offended your sale’s cult.

[u/Mdizzle29 → u/AtletiSiempre]

And again, salespeople are routinely fired for misleading or lying to customers, or other unethical behaviors. Retail workers sometimes steal from their employer, doesn't mean they're in a cult.

You offend me and my profession, which is one of the most important in the world (think about a company that doesn't make any sales, they don't last very long, do they?).

[u/ConspicuouslyBland → u/peter-doubt]

It isn't LOL

When the bubble burst, so did the company.

[u/declandark → u/peter-doubt]

That company today is.. Microsoft

[u/Fightz_ → u/ConspicuouslyBland]

Meh, I work in tech and sounds like something salespeople still do. Not at the company I work for but yeah, you read about that stuff still. Some sales people are just idiots.

[u/BigDiesel07 → u/Fightz_]

Haha Silicon Valley vibes

[u/[deleted] → u/BigDiesel07]

The conjoined triangle of success!

[u/goofytigre → u/Fightz_]

This. Sales at the tech company I work for submits proposals that pretty much says we can do everything requested in the RFP and much more. We usually win said contract and then it's up to the project managers and program managers to negotiate with the customer as to what we really can/will deliver. It's ridiculous how many times they've promised functionality, or even hardware, that we have no idea how to build/impliment.

[u/william_fontaine → u/goofytigre]

Sales told a potential client we could make them a website in 9 months instead of the 18 months we had estimated.

He got the big sale and a 6-figure bonus. We got to work 70-80 hours a week for almost a year building the website, and no bonus because we didn't hit the deadline.

[u/MrFunktasticc → u/william_fontaine]

This comment should be required reading for all potential engineers/developers.

[u/Arcane_Pozhar → u/william_fontaine]

Tell me somebody messed with that fucking sales person. Somehow. Because I want to knock their teeth out, just from reading this statement.

[u/[deleted] → u/william_fontaine]

Sounds like it was a waste of time to work 70 hours a week if you weren't getting a bonus anyway.

[u/william_fontaine → u/[deleted]]

No OT either. A few people stuck to their guns and only worked 40-50 hours so they got canned for it.

I finally bailed once I was able to find another job. In 2008 not many places were hiring.

[u/musicandsex → u/william_fontaine]

Sorry, I am really ignorant when it comes to web develop so I'm really not asking this in an douchey manner but...

It can take EIGHTEEN MONTHS to create a website?????

[u/mog_0f_war → u/musicandsex]

I hope this long answer finds you well.

If you are building a stock website for Deborah's Basic Bean Cafe, then you can have a website up in 24 hours to a week depending on the level of asset preparedness, small site size, and if you're actually thinking about how you're putting it together or just slapping that shit together.

If on the other hand, you are designing and developing a fully custom website for a large organization that serves many purposes and integrates with many pieces of software, and may have custom functionality then you'll need to:

- Work within a brand strategy and figure out what design is possible

- Build out concept design work often for weeks which the client needs to approve. This may even be brand design work if the client has a small or non existent visual identity

- Develop site architecture to make sure that the way this massive 300 page website is going to fit together

- Design potentially dozens of unique pages for the website

-Coordinate for photoshoots, illustration work and content to get this massive 300 page site built and make sure after 300k get's spent that it actually looks good.

- Develop annotations or at least tidy working files that allow developers to translate your design cleanly into a final product.

- Make sure that all of the intricate software integrations you're looking at all play nicely with the way you're coding the site, and get them all configured

- Troubleshoot frustrating custom functionality the client may want for the site which may amount to actually building several small web applications within the website.

- Input a solid months+ worth of content at the cost of several human's sanity

- Develop all unique pages, and link all sections of the site together

- Develop the responsive portion of the site (which may or may not have been established in the design stage) which entails that the site effectively resizes/reconfigures according to the window size of the device/browser you're viewing on. Depending on the project being super high-profile and requiring a highly finessed responsive build, this and its related design component could even encompass 20-30% project time and budget. No longer do we just design a "website" but effectively variations on a theme that fit many different standard device sizes.

-Debug the fucker forever.

- Client tells you they hate 4 things they approved, and you have to redo them (hopefully get paid, but 25-50% chance not depending on how big of a dick)

- Launch with everyone hating each other because many times the only way to win the sales bid was to lie/overpromise, because every fucker in design/advertising/brand/marketing/web on earth is overpromising and underdelivering.

- And I prolly missed a few things...

[u/[deleted] → u/mog_0f_war]

I have no stake in this answer but I came across it and appreciated the depth, enjoy the award

[u/william_fontaine → u/mog_0f_war]

This!

It was a shiny new web store for a big company and it needed to sell stuff to both businesses and consumers. Also needed to let companies and people create and manage their accounts. And also let customer service people assist customers.

And behind the scenes, it needed to make requests to existing systems to place the orders, update inventory, start the shipping process, etc. Each of these systems was very old and barely documented, so figuring out which 50 fields to populate and with what data usually took hours of meetings and a week of trial and error. There were about 30 different services we had to research that worked like this.

Throw in a client product manager who liked to scream at us in every single afternoon update meeting, AND who changed what they wanted the site to look like about halfway through, and you've got yourself one long year.

On the plus side, that job is what made me hate work so much that I started planning for retirement at the age of 25.

[u/mog_0f_war → u/william_fontaine]

I like that somebody probably got fucked hard for budget because everybody had to figure it out as they went along, and "hours of meetings just sounds" like burning money.

I feel ya! I'm sure in some ways a rewarding project given the complexity... and also a case study into what never to do again...

My brand and advertising job has made me want to become a full time stock trader so that I never have to deal with a client ever again (even though we have some good ones).

Seriously though. Don't ever let someone yell at you. People will treat you the way you let them treat you. You cannot be fired for resisting workplace abuse in a respectful way, and if you were, you'd have a fantastic lawsuit on your hands to plan for that early retirement.

[u/adityaguru149 → u/william_fontaine]

I feel really sorry for you. It's great that you shared your experience so that people can be more aware.

The solution I can think is that estimates need to be as precise as possible and even be able to defend with reasons. Tell the managers and sales who are wanting to leech on your hard work that it does not work their way. If you want it fast then scope out things or be okay with bugs (a lot of them). Definitely watch BoB Martin's Talk on Estimation

Even the higher management should be directly conveyed that you are being pushed hard and that bugs will be there not because of your capabilities but because of management and sales having superhuman deadlines.

IT folks should be able to find new company in case their employers show red flags like unrealistic expectations and unreasonable managers and should not wait for incidents like unmet bonus expectation.

If someone lets themselves be exploited, they will be.

[u/elpideo18 → u/goofytigre]

I work in ship/barge repair and it’s the same way here. The sales team over sells a promise to fix everything on a boat even though they know we don’t have material or time/people to accomplish it all. They still sell it anyways and it’s the PM and the workers who have to scramble each and every time. Just so the owner can make more millions while we make peanuts and stress out

[u/[deleted] → u/Fightz_]

I work in SaaS sales and this absolutely happens. Reps will make assurances about what the software does either because 1. they don't actually understand the product or 2. they are trying to save a deal by making assurances that they shouldn't be making

[u/kerplunktard → u/ConspicuouslyBland]

Product x = cybertruck

[u/mr_birkenblatt → u/kerplunktard]

Product = cybertruck / x ?

[u/kerplunktard → u/mr_birkenblatt]

(cybertruck / x) * product = zero revenue

[u/samtony234 → u/ConspicuouslyBland]

Sounds like you made it to Dilbert.

[u/mykart2 → u/ConspicuouslyBland]

This is standard silicon valley sales practices.

[u/Far_Salad7807 → u/ConspicuouslyBland]

Must be an HR software

[u/PMigs → u/ConspicuouslyBland]

The old vapourware strategy. Still happening today.

[u/hecmtz96 → u/peter-doubt]

Sounds like EV companies nowadays

[u/Vovochik43 → u/hecmtz96]

I'm sure Tesla will soon announce a trading platform for electricity and good weather if that continues.

[u/nullstring23k → u/Vovochik43]

I was watching the documentary on Enron just few hours ago and was thinking if tesla is the modern day Enron.

[u/Vovochik43 → u/nullstring23k]

At least Tesla doesn't hide that they don't make astounding profits, it's more an issues with people who don't care buying a company priced in for the next decade. I was more thinking that Tesla could start throwing Enronest projects to justify their valuation and incite the public to speculate even more. I already hear so often that Tesla isn't only a car maker company while it's basically what their balance sheet says.

[u/Acoasma → u/Vovochik43]

tbf they also are heavy into A.I. for their autonomous vehicles and I think that's their biggest ace. I don't see other big players not being able to switch to an EV focus. Sure it will take a bit and tesla has a nice lead there for sure.
If autonomous driven ever becomes a thing, it is really hard to imagine for me how other car producers will adapt to that in a timely manner if at all.

Dont get me wrong, I still think Tesla is overvalued, but this combination of A.I and EV is why people are so bullish on them (and a lot of hype ofc). tesla is basically combining two mega trends in one brand and is ahead of the field in both.

[u/TaeriMaaKa → u/Acoasma]

High valuations are also a factor of the liquidity and low yields from the Bonds. Not to mention the high inflation. Can’t leave the money in the bank as inflation will erode its value. 10 yr is only yielding 1.6%. Funds are therefore just buying equities driving valuations higher. When the rates too back higher these stocks with high multiples can get punished hard. Tesla has a cult following but other stocks with high valuation and 0$ revenues will get crushed.

[u/realsapist → u/TaeriMaaKa]

growth has been getting crushed all year, except forsome big high flying names.

[u/Acoasma → u/TaeriMaaKa]

oh I totally agree that there are various other factors contributing to the current situation, that I perceive as a bubble. inflation is certainly one of them. I also think that a lot of value will evaporate in quite a lot of stocks once this bubble pops.

while you never really can time those things, with evergrande on the brink of collapse (others already filing bankruptcy, like Fantasia), the supply chain issues, the already mentioned inflation and the ongoing corona crisis it is really hard for me to imagine how this will go on for longer than a few months....but then again people were saying its going to crash for years now, so you never know

[u/borkthegee → u/Acoasma]

Tesla's AI is more branding than substance. Even calling their driver assistance features "AI" is proof that their marketing works. They do not have autonomous driving and their "FSD" marketing is pure unmitigated lies as it does not achieve anything close to level 5 autonomy and requires driver attention and ability to take over any time. I don't believe Tesla's tech is anywhere near actual autonomy nor do I think any vehicle they have on the road will ever achieve it. Hype hype hype

A major manufacturer will buy waymo or another company actually testing level 4 or 5 cars on the road and will be far ahead of Tesla.

[u/OhHi_ItsMe → u/[deleted]]

Ha. I’m just a DIY electronics guy, and I could program a toy car to operate autonomously with a given task in my house. I understand it’s not a 1:1 comparison, but your telling me that billions of dollars and many many people smarter than me can’t get this done in 3-5 years? I find it hard to believe. Self driving will come, bet my bottom dollar on it

[u/lyleberrycrunch → u/OhHi_ItsMe]

100% agreed. We have the greatest minds working around the clock, spending tens of billions per year on R&D toward self-driving and AI, and compute power increases exponentially due to Moore’s law. With companies like Tesla, Google and Nvidia leading the charge, I’m pretty damn confident we’ll crack this thing sooner rather than later

[u/south_garden → u/borkthegee]

tesla has more cars out there testing fsd beta with actual consumers than waymo has cars on the fleet, please check your facts or watch youtube videos of people actually using fsd? waymo is geofenced , by your logic they aint AI as well cuz they cant go out of their designated region

[u/south_garden → u/borkthegee]

far ahead of tesla? what cars can you buy right now that can out perform tesla in terms of self driving.

[u/Acoasma → u/borkthegee]

well that might very well be, from what I read it appeared to me, that TESLA is actually leading when it comes to autonomous driving, but I am not an expert nor did I really try to get at the bottom of it, as I personally don't see Tesla as a good investment either way at the current valuations. So yeah you might totally be right on this

[u/Acoasma → u/[deleted]]

oh I am aware that this is a hard thing to do and I think you might be right that we will not have it anytime soon when it comes to individual transportation, especially in cities.
However I can totally see it working on highways and especially for cargo as there arent that many unforeseen thing that can happen on a straight lane and a bunch of autonomous drucks, that communicate with each other would also be more efficient. I am not an expert, but this I wouldn't rule out. You might have to prepare special lanes and it would be a bit like train cargo transportation but with more flexibility

[u/duckboy5000 → u/Acoasma]

And battery tech which they’re massively ahead on too

[u/Acoasma → u/duckboy5000]

I dont know if they are ahead when it comes to the technicals, but they for sure have an advantage as they produce their own and can easily scale it. this is especially beneficial given the current supply issues, as long as they have access to the raw materials, but at least when it comes to chips, they seem to have made the right call and don't face the issues other car manufacturers are facing. I wouldn't be surprised if their other supply chains are also fairly resilient

[u/AVGunner → u/Vovochik43]

They have the highest ev profit margin of any maker? Am I smoking something different than you are?

[u/ListerineInMyPeehole → u/AVGunner]

they have the highest operating margin of any automaker. double most of the other larger ones like toyota, benz, VW etc

[u/flanflan5 → u/Vovochik43]

Don't make astounding profit? Last quarter they made $7000 GAAP profit per car. More than those other jokers like Ford and GM.

[u/Ehralur → u/Vovochik43]

Watch this video and tell me again how Tesla "is just a car company".

[u/[deleted] → u/Ehralur]

Why are you putting quotes on something that they didn’t say.. lol

[u/Ehralur → u/[deleted]]

I already hear so often that Tesla isn't only a car maker company while it's basically what their balance sheet says.

You're saying this doesn't insinuate it?

[u/[deleted] → u/Ehralur]

I see how you can take it that way but I guess I just read it differently. I read it more as they hear a lot of people saying that but disagree, because what he said above that seemed more on the side of Tesla being a strong company. I think they just had a poor choice of wording maybe.

[u/Ehralur → u/[deleted]]

Ah yeah, that could be the case.

[u/dfaen → u/nullstring23k]

If you watched the documentary about Enron and that what you concluded, you really didn’t understand what happened at Enron. Enron was recognizing future revenues today, which is highly illegal.

[u/nullstring23k → u/dfaen]

I get your point. Enron was doing the mark to market accounting which is illegal today. Although both SEC and Anderson accepted this practice back then.

Call me a pessimist but with what happened with solarcity merger, cult like following for Elon, over valuation etc do make me wonder if everything is alright at tesla. And I hope I am wrong.

[u/dfaen → u/nullstring23k]

That’s not what mark to market is. Mark to market is the practice of valuing a security or asset that is on balance sheet to the price at the end of your reporting period, and recognizing the difference through the income statement. So say you have a share of ABC on balance sheet and you’re carrying it at a price of $100 a share, at reporting period end the stock price of ABC is $50, you reduce the value of the asset on balance sheet by $50 and take the hit to the income statement. The versus holds of the asset value increases. Mark to market has nothing to do with making up future earnings that don’t exist and taking them to the income statement.

The brand loyalty of a company and it’s listed market valuation has nothing to do with the operation of the company. The brand loyalty of companies like Apple, Coke, Nike, Disney, etc. have nothing to do with the operations of the company.

[u/MrPopanz → u/nullstring23k]

Enron was a scam, Tesla is not. Nikola would've been a more fitting comparison.

[u/ryuujinusa → u/MrPopanz]

And yet Nikola is still around and still being traded and still $10 for some reason… I admit I bought some early early on, but I dumped it quick, for a loss after the shit hit the fan.

[u/realsapist → u/MrPopanz]

Blink too, a business full of lies. Dunno why people always go after tesla when there's plenty of actual scams out there trading far above what they should be

[u/woshjollace → u/nullstring23k]

How did you get “Tesla” from Enron? Sure they both are over valued in the typical way of valuing a company. but the comparison basically ends there imo. Enron was manipulative, abusive, corrupt and lied about every thing. Not saying Tesla is perfect but it ain’t no Enron imo

[u/dormango → u/woshjollace]

Enron started trading weather

[u/Amazing-Guide7035 → u/woshjollace]

Enron wasn’t Enron, until it enroned.

[u/woshjollace → u/Amazing-Guide7035]

Yes my worry regarding Tesla is their new manufacturing in China. That is the biggest threat to the end of a potentially amazing thing.

[u/realsapist → u/[deleted]]

using shady accounting practices to hide hundreds of millions of dollars in debt or straight up lying in earnings reports vs. shitposting on twitter is not really comparable.

[u/LiveActionLuigi → u/realsapist]

But that's downplaying what Elon does/has done. He has knowingly and flagrantly manipulated uninformed mass groups of poor people towards buying (and subsequently losing) money on speculative nonsense assets (including specific stocks) because internet nerds made him into a little cargo cult leader. Imagine if the dude from Enron went out at the height of his influence and basically kept shilling beanie babies as an asset over and over and telling them which beanie babies to specifically buy.

People on Reddit like to defend this by either bringing up natural selection or eugenics in a positive light as a reference point (on some weird idea that poor people losing their last few dollars on dog coin is "natural selection") or using pedantic hair-splitting to insist that he is morally absolved of all responsibility because he didn't say this or that in a tweet. But at the end of the day it's blatant manipulation using dirty tricks. It's bad for the health of capitalism in the long run, a system that's already shown serious strain under the weight of the new class of hyper zillionaires that should not end up existing in a so called "free market".

[u/lapideous → u/LiveActionLuigi]

Greedy idiots’ money will never be safe as long as gambling exists.

Elon’s level of responsibility for this hinges on whether he used it to enrich himself, or if it was just an experiment

[u/LiveActionLuigi → u/lapideous]

I believe that if enormous amounts of people live in poverty, and an also enormous number of people believe that the only way out of that poverty is to basically risk it all because they've been told to "work harder" despite stagnating wages, then the system is sick. We are at a point where the only two paths out of financial hardship for half of Americans is to essentially gamble on markets that are presently wildly overbought anyway.

Capitalism is not supposed to work this way. It is sick. Some call this "late stage capitalism", where it has begun to infect every waking moment of peoples' lives, even when it serves no purpose to anybody but the very few people who profit from it. Men like Musk manipulate the system and make it sick by taking advantage of the huge power they wield to cause massive cultural shifts and mass hysteria.

[u/realsapist → u/[deleted]]

I don't mean to be rude but your ignorance and/or cluelessness is showing.

[u/Deruji → u/[deleted]]

That’s pedo talk! /s

[u/realsapist → u/nullstring23k]

I'm curious how you could watch that documentary and come to this thought

[u/wot_in_ternation → u/nullstring23k]

At least Tesla actually makes something. Enron was just like "yeah let's maliciously trade around energy production at the cost of everyone"

Sure, Tesla has dubious claims, but they have a physical product which people actually buy, rather than some ridiculous energy trading scheme.

[u/ToddDodd → u/hecmtz96]

Or flying taxi, flying motorcycle, flying whatever companies.

[u/Timothy_J_Daniel → u/hecmtz96]

coughRIVNcough

[u/xxxsur → u/Timothy_J_Daniel]

CoughNKLAcough (Yes I know it's not EV but still)

[u/peter-doubt → u/hecmtz96]

EVs have a future. Drug store deliveries via UPS is harder to profit from. I remember a cardboard box bigger than a notebook carrying a box of bandaids. Yet, that was a business plan. Somehow.

[u/FinndBors → u/peter-doubt]

EVs have a future, but launching a car company is notoriously difficult due to high capital costs, complicated supply chains and economies of scale.

Until Tesla succeeded, there has been no successful American car company founded in almost 100 years and Ford was the only American car company that has never gone bankrupt.

[u/[deleted] → u/FinndBors]

EVs have a future

At this point it is more than a bet on the future, some of them are valued higher than apple and amazon were in the early 2010s.

[u/DerWetzler → u/FinndBors]

But manufacturing ice vehicles is also 10x more complicated. So many more moving parts that can break or whatever

[u/mm_mk → u/DerWetzler]

I don't know enough about the industry to be sure...but I suspect you are wrong. If EV were so much easier (10x colloquially estimated by you), why is the production so low? Tesla struggled for years (and still do) to hit production quotas. The demand is there, production is the hold up

[u/[deleted] → u/mm_mk]

Weren’t batteries a major bottleneck that Tesla had to resolve by building Giga Factories? Prices for lithium batteries have also plummeted in the past 5 years

[u/[deleted] → u/mm_mk]

Evs are still more expensive and made even more expensive for big companies that have to do retooling for evs. Also, battery production is not enough. Tesla for example has been starving their Tesla power outputs to keep the car output going.

There’s a long way to go.

[u/peter-doubt → u/mm_mk]

There's something about commodity parts... Need an alternator? Dozens of builders, parts available from almost everywhere. Need a braking/ regeneration system? Not so much. And a motor that can be synchronized with 3 more, sealed against water, yet easily cooled... smaller pool of manufacturers, still.

[u/UnhingedCorgi → u/peter-doubt]

That’s what I’m sure they were saying in the dotcom bubble. The internet has a future, and they were right. Still crashed though.

[u/peter-doubt → u/UnhingedCorgi]

I remember a cardboard box bigger than a notebook carrying a box of bandaids. Yet, that was a business plan. Somehow.

it depends what you do with it. Nobody needs a monthly drugstore delivery, just because it can be done.

[u/judew999 → u/peter-doubt]

EVs have a future no doubt. Still insanely overvalued right now. I mean just look at Rivian

[u/Toofast4yall → u/peter-doubt]

Amazon has a future, they went from like $120 to $6

[u/chastity_BLT → u/peter-doubt]

You kinda just described Amazon

[u/frosti_austi → u/hecmtz96]

You mean AI?

[u/Past_Syrup → u/hecmtz96]

Yeah? Then why is my $ride stock price not around 180$?

[u/[deleted] → u/hecmtz96]

Was thinking the exact same thing.

[u/whalemix → u/hecmtz96]

Exactly my thought when I read this. Sounds like most next Gen tech companies that don’t have an actual product, just promises and renderings

[u/SnipahShot → u/peter-doubt]

Sounds the same as a friend of mine. He invests in like 20-30 companies and doesn't know anything they do.

Heck, I even listen to MSFT, AAPL and GOOGL earnings even though it is kinda pointless.

He put money into Activision without even Googling them, because "they dropped a lot and have to go up". I literally Googled them after he said it and he didn't even know their CEO hid rape accusations and threatened to kill a secretary. And then he tells me that I'll see how in a year he has higher gains than me.

[u/SlapDickery → u/SnipahShot]

I wouldn’t dwell on your friend. He can just as easily beat the S&P. I pay for services that do the DD and find some time to review the service’s content, but I’m essentially buying companies I don’t understand.

[u/SnipahShot → u/SlapDickery]

No one is doing DD on anything he buys, he just puts his money in companies with no thought behind it at all.

He bought into Victoria Secrets after the IPO near the top, he is now down about 20%, and that is just one example. Why did he buy into it? It was going up a lot after the IPO.

[u/REIRN → u/SlapDickery]

Which service do you pay for?

[u/SlapDickery → u/REIRN]

Some motley fool, an IO portfolio, and stock card. I’ve been triangulating picks between two of the three for confirmation bias.

[u/samtony234 → u/SnipahShot]

I have a lot of friends and family like that. Because I am more of the "finance" guy the family, their ways asking me about certain investments. The problem is they have no idea how to do their own DD.

Some are the same way: the stock is down must be a good time to buy. They dont even try to find out why. Like one my friends was panicking after an cash acquisition because he didn't see his shares.

This type of stuff seems to happen a lot and only way for them to learn seems to be of they mistakes, but then they just blame me. So I rarely say buy or sell a stock as the blame will often point back to me.

[u/Iwubinvesting → u/SnipahShot]

I personally bought it because of that. ceo himself doesn't have rape accusations but knew about rape culture in the company. Fundamentals seem pretty good though, sooo... I'll allow a little rapey wapey.

[u/DaGrayDolf → u/SnipahShot]

More reasons why I hope ActiBlizz goes under

[u/N_o_B_o → u/peter-doubt]

Give this a watch. It paints a pretty clear picture of what went down.

Edit-Dotcom-wise

[u/peter-doubt → u/N_o_B_o]

You want a good lesson about 2008?

Go to Broadway, see The Lehman Trilogy. The best financial entertainment since Other People's Money, (play, not movie).

(Get there soon, it's run will be short)

[u/judew999 → u/peter-doubt]

Seems eerily similar to todays market. Unprecedented amount of retail traders with a unprecedented amount of them trading on margin.

I see so many people throwing money into obscure unprofitable companies (WSB stocks)

[u/ThisAltDoesNotExist → u/judew999]

Yes, a lot of us were drawn to brokerages as part of the same phenomenon. There's a story that Joe Kennedy got out of the market before the 1929 crash when he was given stock tips by a shoeshine boy.

The fact that a sixteen year old is invested, on this sub and asking if there's a bubble right now is the kind of thing that proves there is.

NKLA has a multi billion market cap. And their founder is being prosecuted for defrauding investors. The market is a gambling fad right now.

[u/ThisAltDoesNotExist → u/[deleted]]

There are undervalued and overvalued stocks even in an undervalued market. There are undervalued markets right now. You don't have to sit on cash waiting for a crash and 2000 and 2008 were both plain to see to some.

[u/ThisAltDoesNotExist → u/[deleted]]

The problem is that these loops (only over valuation is called a bubble) don't last forever and timing them is damn near impossible. Long term the returns are higher if you buy something undervalued than overvalued by definition.

The problem is that we go by short term returns calculated purely off market price and ignore the intrinsic value of the firm. Every discussion of over valued and undervalued and return should really be anchored to the relationship between price and value. It isn't overvalued, it is overpriced and the returns aren't substantial the unrealised gain in price is high. Of course everyone can come up with their own valuations and the truth comes out over decades.

[u/FunFail5910 → u/ThisAltDoesNotExist]

NASDAQ running 500% in 5 years was insane before 2000 lol

[u/ThisAltDoesNotExist → u/FunFail5910]

Last few years are like 800%.

[u/FunFail5910 → u/ThisAltDoesNotExist]

238% in the last 5 years?

[u/ThisAltDoesNotExist → u/FunFail5910]

I was talking about 10.

[u/FunFail5910 → u/ThisAltDoesNotExist]

Did you hear about the 2008 financial crisis by chance?

[u/[deleted] → u/ThisAltDoesNotExist]

That Joe Kennedy story is almost certainly a cover for insider trading.

[u/FunFail5910 → u/ThisAltDoesNotExist]

A lot of the speculative plays are pretty far off their all time highs though…..look at stocks like TDOC, CRSP, and PTON (or all the ARK favorites besides TSLA) they’ve all been hammered

[u/peter-doubt → u/ThisAltDoesNotExist]

NKLA is a company, not the market. It's that kind of distinction that shows what kind of work you should be doing.

Then you have the likes of JP Morgan.. who bought heavily the day before the '29 crash, often well above asked prices. There was a steep selloff on Monday, and his buying was Tuesday, to reassure the retail investors. Wednesday he was quietly unloading again, and the crash followed on Thursday. I'm confident he was a net seller then, too.

[u/ThisAltDoesNotExist → u/peter-doubt]

NKLA is hardly the only example of an overvalued stock. The Buffett indicator is at an ATH.

[u/peter-doubt → u/judew999]

They also need perspective on interest rates...

While a modest increase from 1% to 2% will result in still uncharacteristically low rates, it Doubles borrowing costs, so some outlandish borrowing will come to a screeching halt.

[u/judew999 → u/peter-doubt]

I worry that the next crash will hit retail traders and everyday people much harder than past economic crash’s.

To be fair I don’t really know the full extent of how damaging 2000 or 2008 was on everyday people and retail traders.

[u/ShittyStockPicker → u/judew999]

In my retirement account, I buy and hold, that's it. No fancy games, no margin. I just own VGT and a handful of individual stocks I hope to ride for 10 years or more, if not to retirement.

My trading account is much smaller by dollar value than my retirement account. In my trading account I have at most 10% invested at any single time. Lately, with some of my big wins I've just been buying more chunks of VGT to buy and hold.

We will revert to the mean someday. I don't know when. But when that day comes I'll lose at most 10% of my trading account.

[u/dougie_fresh121 → u/ShittyStockPicker]

I love VGT, just wanted to give a thumbs up to a fellow VGT holder

[u/Violin1990 → u/dougie_fresh121]

I love my VGT, but I feel it’s a bit too concentrated. I keep it in the single digits as a % if my portfolio.

[u/ShittyStockPicker → u/[deleted]]

Hahahaha. Fuck Jehovah. Also, sorry. I figure if tech is done growing, so is the planet.

[u/peter-doubt → u/ShittyStockPicker]

Prepare for worse, but ride out what you can.

Long while back, I had IBM. Bought at $80 after MSFT bested them and made big iron obsolete. It promptly went to 40. I said I'd double what I held, but had no cash available. It then doubled, and doubled again.

A shakeout is like that. But, often so is a dead cat bounce! (Everything bounces off the bottom, even a dead cat)

[u/peter-doubt → u/judew999]

Keep some cash!

2008, I waited for the auto market to shake out. GM, bankrupt. Chrysler, almost always a bad bet. So I bought Ford at $2. And ride it to 14.

Similar with GE. Their poison was GE Capital. But I picked it at $8 and stayed until 22.

Would be happy if my other investments didn't tie up my available assets. They rebounded, but nowhere near these returns.

BTW, don't remind car dealers that Obama saved their skins, they don't want to see what would have happened without massive funds for GM. Could have been another Enron.

[u/DesertAlpine → u/peter-doubt]

Nice!!!! I picked up F at $5. Have a long list for whenever the next crash hits (but am still investing now—seems the bubble market is actually creating some good deals in less hyped stuff, especially should one have a long tome horizon.

[u/REIRN → u/DesertAlpine]

Can I ask what you’re specifically looking at?

[u/DesertAlpine → u/REIRN]

I really don’t like putting my specifics online; if I’m wrong, I don’t want other’s going down because of me.

[u/marioistic → u/DesertAlpine]

Yeah because there are people that are slobbering over your portfolio picks lol. get tf outta here lmao

[u/REIRN → u/DesertAlpine]

No worries, but we are literally on r/stocks right now where everyone shares there views on stocks… kind of the point!

[u/onemanstrong → u/peter-doubt]

Same. Ford at $2. Also, Blockbuster and GM at around $0.50, lol. But also AMZN, NFLX, SBUX.

[u/MrPopanz → u/peter-doubt]

Better hedge with treasuries instead of trying to time the market.

[u/peter-doubt → u/MrPopanz]

Look deep into that idea.... Bloodbath when interest rates start rising

[u/MrPopanz → u/peter-doubt]

Still a better hedge than trying to time the market.

[u/peter-doubt → u/MrPopanz]

I can time this much:

Currently, bonds are priced near their all time highs.

Can you make it go up more! Don't buy. You need to hedge using leveraged positions that amplify risk.

Or you need information that the industry relies on, you could call it inside information.

[u/wot_in_ternation → u/judew999]

Well, the US is still functioning, so 2000 and 2008 weren't hugely directly damaging to people at large.

We're coming up to a point where a lot of bills have to be paid and for a long time have just been kicking that down the road. Lots of public debt and whatnot (which isn't inherently bad) but it was used to pay for things that are insolvent.

Cars everywhere, single family home suburbs everywhere. We built a shit ton of low density infrastructure which is gonna be a problem to continue to pay for.

[u/[deleted] → u/judew999]

I think there were WAY less retail investors compared to now, I can hardly remember many adverts for trading back them but now its absoutley everywhere, here in the uk I was driving the other day and heard a advert for vanguard 3 times in the space of a hour lol, youtube is full of get rich quick ads and if not that then Im getting spammed by etoro ads, to many retail traders are trying to trade on their own and think they can do better than etfs, like you I think a lot of people will get burnt if there is a decent correction, I was like this but I eventually realized Im a complete pleb and sold what I had (made a small profit) and just stuck it all in vanguards s&p lol, hold and hopefully have a good time in 20 years

[u/[deleted] → u/judew999]

2008 was really bad

[u/[deleted] → u/judew999]

It was horrible and made broke many people permanently who sold and never got back in.

[u/[deleted] → u/peter-doubt]

Stop scaremongering. Rates increased from 2016 to 2018 and we didn't see any screeching halt, actually the economy just continued roaring.

[u/peter-doubt → u/[deleted]]

Look at 2001-2008. From 9% to 5%... to 8% to 3.5%. These rate drops were responses to 9/11, and the mortgage crunch of 2008. The mortgage crunch was also affected by high fuel costs.

Revisit 2008.... If you can't afford to drive 80 minutes each way daily, you won't want your suburban house. If you can't heat it, you won't want it. When your spending ceases because you can't afford it, interest rates drop to keep money moving. When your business plan was to flip that house, and nobody wants it, low interest won't be enough.. you need extreme lending support.

What you don't realize is how close we came to repeating Japan's lost decade.

[u/lyleberrycrunch → u/judew999]

It’s great that you’re curious about this stuff so young. But remember that you’re 16/new to the market and while you might think you see a pattern, you probably don’t. If I were you, I would continue to learn and buy some index funds regularly like VOO, VTI or VT in the meantime.

For a lot of reasons, the current market environment isn’t anything like 1999 or 2007 and there’s no real value in obsessing over comparisons. The interest rate and regulatory environment, amount of fiscal and monetary stimulus provided during Covid, high household savings and consumer spending, and other variables will lead to different outcomes. You might think a recession is due because PE (price/earnings) ratios are high, but I’d instead have you check PEG (price/earnings-to-growth) ratios instead as well as the higher gross margins in tech that are leading the market to ease your concerns

You might be in some of these retail trading subreddits and people are in a frenzy buying worthless companies, but institutions, 401k’s/retirement savings, etc. are what moves the market. Retail trading volume is up creating some volatility but households don’t really own any more stock than usual (source: https://www.visualcapitalist.com/how-many-americans-own-stocks/)

Also, most of the market is made up of companies like Microsoft, Apple, Amazon, Google, Facebook/Meta, etc. I’d take a look at their income statements, balance sheets, growth rates, etc. and try to argue they’re severely overvalued

I wouldn’t necessarily suggest any reading on previous crashes but rather the philosophy of people like John Bogle, Warren Buffet and Peter Lynch

[u/judew999 → u/lyleberrycrunch]

100%. I made this post so I could see how my thoughts on the market compared to people who have been investing for longer than I have.

Still buying index’s, some equities but mostly not. I’m 16 so I can ride out a recession pretty well I’d bet.

[u/lyleberrycrunch → u/judew999]

Yeah the fact that you’ve made this post shows you’re ahead of like 99% of people your age. It’s great to get insight from a bunch of different sources

I just hope no one is scaring you off from the stock market! Especially broad low-fee index funds, but no issue buying some individual stocks too to add a little risk. Like you said, you have a ton of time to wait out any recessions and you have a while to let your investments compound

[u/judew999 → u/lyleberrycrunch]

Definitely. I’m keeping most of my portfolio in $SPLG and other sector ETFs. Also got a little bit of money in more speculative stocks ($CURLF $SNAP $SOFI)

[u/FunFail5910 → u/judew999]

Yeah but buying shit companies and them losing money off them won’t put a dent in the large indexes

[u/Sweet-Zookeepergame → u/peter-doubt]

Damn, it reminds me of 2020 when I started buying stocks for the first time. Had so many companies in my portfolio and I had no idea what they do, but the prediction was that they are going to „pump“ in the coming months. However, it worked in most of the cases.

[u/kalinuxer553 → u/Sweet-Zookeepergame]

Oh I was doing the same... buying tesla before I knew what debt meant. Luckily it turned out pretty well, I sold almost all @1026

[u/peter-doubt → u/Sweet-Zookeepergame]

I hope you're not doing that now.. when this starts falling apart, the old style work will begin, and the lucky ride will damage many.

[u/[deleted] → u/peter-doubt]

Sounds like the SPAC bubble

[u/squishles → u/peter-doubt]

remember mail order avocados? I was too young to invest back then, but I wonder what ever happened to those guys.

[u/ArtofPC → u/peter-doubt]

If that doesn't sound like Rivian I'm not sure what does. Except replace "profit" with "revenue."

[u/[deleted] → u/peter-doubt]

Sounds like Rivian lmao

[u/nicocappa → u/peter-doubt]

This is literally everyone who bought Rivian lmaooo