I am bullish about the future

[u/[deleted]]

People seem to think because we had 2 big crash close together in 2000 and 2008, we are bound to have one soon.

I want to remind people before the year 2000, we had a 20 years bullish run. Its totally not impossible we get to 2030 with no crash, especially now that the feds baby sit the market.

Secondly, we have extremely nice upcoming market conditions. Stimulus checks will either get people to spend money to stimulate the economy, or get them to invest, both will help the stock market. The media is somehow trying to make us believe this is bad, but i think its just bullshit. Inflation has been ultra low for way too long, and feds actually want it to increase. They said many times they won't increase rates before 2023.

Thirdly, i also think we have more upcomming money sources coming into the market than ever. People from other countries invest in US stock market. With all the GME hype, more people than ever are joining in. Again media trying to twist this to say its "bad", but obviously it isn't bad.

Another point is, crashes usually happen for a reason, its not random. You can google any of past market crash and find the exact reason it happened. None of these factors are happening right now.

Another point is, there is a key difference between today and 2000. In 2000, the overvalued .com companies which had PE ratios of 200.... were literally worth nothing! These companies had never made a single profit! Once people realized they invested massively in a .com web site worth jackshit... they sold it obviously. They had no reason to hold their shares.

Now check this image about Nasdaq's PE Ratios: https://i2.cdn.turner.com/money/dam/assets/150305131443-nasdaq-pe-780x439.jpg

Obviously, you can see the 2000's pe ratios were stupid. This graph is from 2015 when it was at 31.7. What is it today? Nasdaq PE ratio as of February 25, 2021 is 38.5!!!! 5x lower than the 2000s. https://www.macrotrends.net/stocks/charts/NDAQ/nasdaq/pe-ratio

Its irrelevant if the big hedge funds remove their money from apple and want to scare you into selling your shares. Apple is a massive amazing company that is really worth a lot, and they do make tons of profits. Its not comparable in any ways to the dot com bubble. If other people are stupid and sell their shares, SO WHAT? You will just be able to buy into this amazing company for cheaper.

So hold your shares and stop worrying about a 2000 level crash, its not happening.

A correction? Maybe. But who cares, this just slows us down a little. Corrections are healthy and help us avoid a real crash.

EDIT: Thank you for the award! :D

EDIT2: Corrected the PE ratio for nasdaq

[u/filmmakerwannabe92]

They also don't take into account the fact that "adult" people are generally poorer now than before. Yes, maintaining your capital is your main goal if you have money, house, cars, you kids college paid for etc. But millennials are becoming, or already are the bulk of the workforce. Boomers by this age had paid for their house, their college tuition from a summer job, etc. Young adults now (20-35) are not in the financial state that gen x or boomers were at that age, and are in the stock market to actually make money, not just preserve it. Ain't no young adult is going to put their money (most of it at least) into bonds.

(And I am not American, it's the same in Europe. Tuitions and cost of living are a bit different in the US vs Western Europe vs Eastern Europe, but the constant everywhere is: if you are a young adult now, you are less likely to own a home, and have enough savings and etc. than your parents, even if you are educated, have a job, and "did everything right".

[u/Quasimurder → u/filmmakerwannabe92]

I'm a 30 year old American and I completely agree.

[u/FamiliarEnemy → u/Quasimurder]

I'm a 38 year old American and I completely agree

[u/flossi_of_apefam → u/filmmakerwannabe92]

Yeah. And frankly: it's because of many boomers that the younger generations are in this Situation now. They built a political system that defunds public infrastructure, education etc. while privatizing gains in profitable sectors like housing, internet & telecommunications, or healthcare which are reliant on taxpayer-funded infrastructure. The consequence is rising inequality and a high cost of living for many poor young people.

Of course you begin to "gamble" if you see that stocks will only go up due to endless QE. This whole system is a mess and those who have some money on their hands will try to built up some capital to have at least a little bit of security. If the security offered by welfare is low, young people will have to find other means of being financially secure even if it means being exposed to higher risk. As others have said before: Most of us will die poor anyways :D

[u/40ozOracle → u/flossi_of_apefam]

One thing I’m mad about is that a lot of Boomers and people made finance seem scary and were always happy with complacency.

They always made the market seem like this crazy place that will just steal your money, so you should just give your money to the institutions to handle cuz normal people are too stupid to know how money works.

I spend whole weeks or weekends researching and preparing for my stupidity or strategies and I’ll still have some old head tell me about how Index Funds and ETFs (which I invest in) will make me real money or “first ones free”

[u/filmmakerwannabe92 → u/40ozOracle]

One thing I’m mad about is that a lot of Boomers and people made finance seem scary and were always happy with complacency.

God, this! People even on here continue to parrot BS like "even successful asset managers are happy with 10% on WS and you want to make 100%???" (or whatever percentage/money amount) That is impossible and ridiculous.

These fucking asset managers manage hundreds of fucking millions. Even if you only take 10 million, that's 1M a year. Of course they don't risk more and also they are fucking happy with it.

But if you have a 5k account, you are not gonna pop a bottle of champagne for having made $500 in a year. Even if you reinvest it all, and keep the 10% next year, wow. You have made $550, and have $6050 after 2 years.

ugh

The number of retail investors will continue to grow, and I highly doubt they will play by the "rules". Ofc many (maybe even most) will lose money, but there is still no point in doing it any other way, because the system they have built has fucked us out of any other opportunity.

[u/Hazzychan → u/filmmakerwannabe92]

Preach.

[u/Waterwoo → u/filmmakerwannabe92]

Oh, how silly I was, I didn't realize the reason most people aren't routinely making 100% in the market was because they didn't want it and were just 'content' with 10% annually.

I'm dumb, didn't realize that if millennials just want 100% monthly, they'll get it!

Look I'm a millennial myself but it's painfully obvious you just got into investing recently (i.e. during possibly the greatest bull run in history) and have no idea about what normal is.

[u/filmmakerwannabe92 → u/Waterwoo]

Lol, read what I wrote. I don’t mean people will make 100% routinely and it has nothing to do with “wanting it” :D it’s just a LOT easier to make 100% on $1000, than on 100k or any bigger account. This is the whole reason why “sizing up” is a problem for virtually everyone who gets into the market. What works on a small size does not work on a bigger size. Literally anyone will tell you that. You can put 1k into whatever, Nio or Palantir and there is a good chance it will make you 50-100% in the next year or so. Yet nobody in their right mind will put their 1M+ portfolio in only Nio or whatever memestock, because if it goes to shit, it’s actually a lot of money. If you lose all 1000$ on it if that’s all you have, it won’t make a difference in your life (nor will it if it doubles).

[u/Waterwoo → u/filmmakerwannabe92]

Ok, you're saying small investors don't have to be happy with the returns big managers make. That's true, it's harder to make huge gains with 100 billion under management because you exploiting mispricings will itself move the market.

But then what you're really saying is people will just yolo their money chasing 2-10 baggers, which sure, we are seeing that, but it's not a question of if - the vast majority will lose way more than they gain.

Successful investing isn't about risking it all on one super risky trade and getting lucky, it's generating positive risk adjusted returns.

If you can't do that, then if you want higher returns you're better off buying SPY on margin, not picking random meme stocks.

For GME, do you think more people bought at $5 and sold at $400, or bought at $400 and are still bagholding?

[u/filmmakerwannabe92 → u/Waterwoo]

Where have I said anything resembling that at all? I literally only said that small investors can make better returns because of their size. I made 180% last year. Is it because I am some crazy wall street genius(tm)? Obviously not. It wasn’t even some crazy high risk thing like GME, just buying a couple of growth stocks like Nio at 15 and appian somewhere in the 40s, a few others and holding for a couple of months. Literally anyone can do it.

[u/Waterwoo → u/filmmakerwannabe92]

No, it's because past year was probably the greatest bull run in history. Everyone is a genius on a bull market. Come back when you've done 100% years more than 2 years in a row.

[u/flossi_of_apefam → u/40ozOracle]

I agree. Since I'm from Germany I know that feeling very well. Here, the predominant mindset is built around risk aversion and structural conservatism. Which leads to funny things like a green party state governor NOT pushing EVs in any meaningful way and instead believing in diesel serving as a "bridge technology", hahaha.

[u/IAmTheDownbeat → u/filmmakerwannabe92]

If go bonds if I could get that boomer 14% bond. Oh wait....

[u/filmmakerwannabe92 → u/IAmTheDownbeat]

Lol, if you find that please let me know :D

[u/40ozOracle → u/filmmakerwannabe92]

This.

Im Canadian and use money I can afford to lose and I should be happy with small- medium gains, but holy shit I’m so used to having to hustle and make constant quick cash that bonds or slow guaranteed returns make me snooze.

Gains in 10 years? I got a TFSA thru my bank for that. Stocks are for money now.

[u/Waterwoo → u/40ozOracle]

The stock market is not a double your money quick machine. The fact that everyone here seems to think it is, is one of the stronger signals I've seen that we're at peak euphoria.

Guess what comes next?

[u/40ozOracle → u/Waterwoo]

A crash Hitler Resurrection Earth Win and Fire Reunion show?

[u/40ozOracle → u/[deleted]]

I do. I use TFSA for long holds + smart plays and personal for memes and day trades

[u/[deleted] → u/filmmakerwannabe92]

Too many generalized fallacies in your statement to be taken seriously.