Yes, it's where the terms come from. But if using jokey terms for things is being full of themselves, where does that leave software development? The field is rife with jokes and punny naming.
1) My remark comes from not understanding bull and bear as jokey, but as, like, cool aggressive forces of nature to describe what a line on a chart looks like.
2) People in the software industry, also extremely full of themselves.
And you are right to point that out, because all those senses ("horn thrust and paw slam", "domesticated vs savage") are backformations. We adopted them because they made sense.
The real origin of the terms is from the early 1700: "seller of the bear skin before the bear is caught" - old proverb - was called the player that tries to deliver goods after their price has fallen (so a seller in advance). In 1709 the term was in fact 'bearskin'.
Ten years later the "bull" was introduced as a counterpart - this time probably with relation to the images.
The fact that bears are known to hibernate sounds like a better reason behind the term. So I looked it up because your comment just sounds like some ridiculous folklore etymology someone made up (no offense, and apparently my guess is not right either).
> The bear came first. Etymologists point to a proverb warning that it is not wise "to sell the bear's skin before one has caught the bear." By the eighteenth century, the term bearskin was being used in the phrase "to sell (or buy) the bearskin" and in the name "bearskin jobber," referring to one selling the "bearskin." Bearskin was quickly shortened to bear, which was applied to stock that was being sold by a speculator and the speculator selling stock.
...
> At about the same time, another animal symbol made its appearance in the marketplace. The term bull originally meant a speculative purchase in the expectation that stock prices would rise; the term was later applied to the person making such purchases. The animal seems to have been chosen as a fitting alter ego to the bear. Thus poet Alexander Pope wrote in 1720:
> > Come fill the South Sea goblet full;
> > The gods shall of our stock take care:
> > Europa pleased accepts the Bull,
> > And Jove with joy puts off the Bear.
> This eighteenth-century animal imagery caught on, and bears and bulls have been in the stock market ever since.
I'm not really satisfied with the bull explanation either, as it sounds a bit tauotological, but whatever.
> all those senses ("horn thrust and paw slam", "domesticated vs savage") are backformations. We adopted them because they made sense.
But now, about
> ridiculous folklore etymology someone made up (no offense, and apparently my guess is not right either)
It does not work that way. An etymology as an history of a term will produce a chronicle, not yet a meaning: in 1709 somebody started to use "bearskin" out of the proverb, etc. But there is not just that: there is the meaning of terms that we recognize during that development - "horn thrust and paw slam", "domesticated vs savage", as I wrote nearby. So, what I wrote in the original is the meaning that came after the origin - what is intended (or part of what is intended). In fact, "bear" (in market speculation) comes from "bearskin", but where did they take the "bull" from (image that was construed to have a bear as a counterpart)? There you have to reason about the terms and construct a working image.
There is no need to call it "ridiculous": it is normal sense attribution for jargon creation.
where you will find foremostly the images of their ways of attack. Then the origin, the "bearskin jobber", and the need to have a counterpart. Then it noted, importantly, that bets on bull and bear fights were very popular in the past centuries - which can be another origin of using those animals for a bet.
In the old days, we would just google it. These days ChatGPT will write a nice answer:
“A bear market is a financial term used to describe a prolonged period of declining stock prices, typically by 20% or more, across various financial markets. During a bear market, investor confidence is low, and there is a prevailing sense of pessimism about the economy's future performance. It is the opposite of a bull market, which is characterized by rising stock prices and increased optimism.”
It’s kind of cool to have a tutor like this. Wish it could teach math.
Only, now you have to check each output sentence, because if formerly you could suspect that an output could be a figment wit shaky sides, now it becomes the rule.
The 401k flow into institutional investors did not disappear. No new sink for the money appeared.
Limited supply of shares and financial products to buy and near infinite, constantly replenishing, demand for putting the money somewhere. Until the pensions get emptied (not happening for the next few decades) the trend can only be up.
Money need to go somewhere.
And yes, this means that it is nearly totally decoupled from "fundamentals". Same as with real estate and housing.
Unless we actively force this money into the economy and wreck pensions, university endowments and charities funds, there is no way out anytime soon. The Boomers need their money somewhere.
And yes. This is why productivity is down, every company has massive war chest and noone invest in fundamentals. The rise of the MBA is due to Boomers 401k, not to something fundamentally useful there.
I find index funds are nearly decoupled from the fundamentals except for the occasional adds/subtracts from the index. They might be optimal for the individual investor, but are adding so much noise to the price signal for the individual stock that you have to use option pairs to actually bet on a company doing well.
So based on the boomer 401k theory, we should see steady declines as their investment rate goes net negative by 2030?
I cant believe the financial returns my wife’s financial advisor promises. He describes it as the magic of index funds. He should know he was in band before settling down and taking over the family firm.
You are missing something. Where else would it go?
The returns do not matter. What matters is finding something.
Also it depends on share buybacks. If they mostly sell to shares buybacks, every sale actually prop up the price. Also uni endowment and charity funds keep growing with rules to never take money out, so they will be the one buying from pensions.
I highly expect stuff to stay bear until we actively work on it.
High yield savings accounts at 5%, if real inflation is at 3% and you have 2 million saved, that’s 40k/year plus Social Security for another 40k/year. Combine that with a paid off house and Medicare and I would say they’d be doing fine.
I think the question of "Where else would it go?" is a real one that is currently driving the Blackrocks of the world to create BTC etfs. Its another vehicle to park the money in.
> If they mostly sell to shares buybacks, every sale actually prop up the price.
Only if companies have enough cash to do so. Buybacks made sense more sense in a low interest rate environment, but are riskier if they have to borrow to buy their stock back.
> Also uni endowment and charity funds keep growing with rules to never take money out, so they will be the one buying from pensions.
But again, is this amount as much as the amount that is to be sold, and at what price?
>Limited supply of shares and financial products to buy
Dunno about that one. Liquidity in even low-volume tickers seems to be "just fine". Market makers see to it that everyone who wants a share can get one, by any means necessary.
>Unless we actively force this money into the economy and wreck pensions, university endowments and charities funds
Or the REITS and SLABS so many are invested in turn out to be worth a lot less than we thought they were. Where's my Jenga set?
Iirc the last solid stats i have seen are from 2019 when 82% of the public market was owned by institutional long term investors. And i doubt it went down.
Liquidity is high because the market makers role has exploded and they invest a lot to make sure it stay high.
GP is referring to the average worker’s retirement plan buying some form of target date fund regularly on payday. This forces the market up as a whole, since the money must go somewhere.
Tax havens are generally pass-through entities of a sort, they're not spending billions of dollars on cocktails in the Caymans. The passage through is just disguised well enough to avoid being taxed.
This is a good point.
Over 50% of companies offer a 401k. BLS says as high as 67% of employees have access to some sort of retirement plan. A good percent of those 401k / retirement plans include some sort of employer match. Lets say 50% of those with a retirement plan contribute.
That's a massive amount of new money that has to go somewhere every month. Majority of these plans offer some sort of index fund variety instead of individual stocks the exception being that most of the smart publicly traded ones also offer the option to purchase employer stock as well. With all this money needing to find a home every month, index funds are as close to a guarantee of equities going up over time as you can get.
That's an interesting take I haven't heard ever before. I'd love to ask some questions if you happen to know the answer:
- Since people are constantly retiring, and selling the stocks they are holding at that point: Wouldn't that balance out the limitless demand problem? Boomers/Gen X/Millenials/Gen Z all have around the same segment of the population according to (https://www.statista.com/statistics/296974/us-population-sha...) wouldn't things earlier generations sell get distributed among the next generation, preferentially going to Gen X who will be at their peak earning potential at that point. (Which in turn will sell to Millennials and so on)
- How would you actively force money into an economy?
1. They don't sell that much, and more importantly they sell at a far higher price because the market went up. So they comparatively sell more. Studies we have on older people is that they do not actually liquidate theory holdings. What they do is get more loans to invest in rent, backed by their holdings. Or they reduce their money need, by stopping investing in their holdings.
2. Most Boomers are only starting to retire. And they have enormous needs. Plus university endowments, charities funds, etc also are institutional investors. The problem is do they sell. These days usually they only sell to shares buybacks, which actually reinforce the problem.
3. Move pensions to a government tax funded redistributive system, so the income of today pay the pensions of today. Tax land and housing ownership heavily, except for primary house (with a limit based on family size probably for primary house). Heavily (massively. Like 90% at least) tax inheritance. We have good economics support for these, even in heavily capitalistic and neoliberal economic circles. The problem is political. The Boomers will not vote for it, it would take away from them.
I’ve only worked for 15 years but I already know if the inheritance I’ll be leaving to my nieces and nephews will be taxed at 90% I will just retire sooner. And I’m center-left.
That is not a problem. As long as you spend that money.
Our problem right now is that the money is not spent. The earlier you retire to spend it the better we are as an economy. So yes. Go for it. That is the point :)
How do you prevent massive inflation as everyone dumps their money into buying goods and services instead of saving? Kind of like we have going now after the covid money and economic boom
> The earlier you retire to spend it the better we are as an economy. So yes. Go for it.
A problem in the US is that the system essentially forces people to hoard more and more and more because there is no useful social safety net. So you are forced to constantly think what if. What if I live longer than average? What if there are unexpected expenses? So the only responsible answer is keep working and hoarding for those what ifs. It's not a healthy system since it encourages the hoarding but also because it prevents people from enjoying a longer retirement.
It’s weird that not spending every dime you make is being characterized as hoarding. My wife and I spend to our level of wants and needs and invest the rest. We’re not hoarding, we’re planning.
> It’s weird that not spending every dime you make is being characterized as hoarding.
That's not at all what I meant. Maybe hoarding is the wrong word, couldn't think of another one. Saving is great, but what is the amount one needs to save?
What is your target amount in investments to be able to retire?
What I mean is that in the US there is a neverending pressure to save more and more because you never know what might happen and there is no social safety net so it's all on you. So you must keep working and saving to cover every conceivable future edge case, so it feels like no amount will ever be enough.
Or you start giving earlier (depending how presents are taxed), and your nieces and nephews receive the support when they are young and strapped for cash. I think this would help stimulating the economy much more than if your heirs are in their 50s+, when they (on average) don't need any money and just keep hording it.
I’m not hoarding anything. They’re getting checks regularly. They’d be getting a lot more if I weren’t taxed at obscene rates relative to billionaires.
I'm not a boomer, and there is no way I would vote to tax what little I am able to leave my children at 90%. I got nothing from my parents and worked hard since i was 15 to scratch out an existence and provide more for my kids than I got. Not a chance I think that the government can do a better job for my kids with what I was able to save by throwing it into a pot than I could
Note that the goal is not for the government to get it.
The goal is for you to spend it. Because hoarding it like this to pass it to your children actually make it harder for them to have a good life and for the economy to grow.
How do you think intergenerational wealth is created? Most people don’t work hard to make the economy perform better, most people work hard to provide for themselves, their family and (through charity) their communities.
Your argument is that if I give my kid 100k they will be worse off for it? Does this scale? So if someone gives their kid a million will their kid be 10x worse than mine? How about a billion? Sorry friend, this argument does not really land.
Your argument also fails to account for inflation. More money spent instead of saved means more competition for the same amount of goods and then we get what we have now, increasing rates and cost of goods.
Probably the boomers are not liquidating their stock market assets until very last minute - after all it’s pretty liquid so personally I would only sell if I really needed the money or had an a idea of where else to put it for a better short term return.
Many boomers also have rental income from properties and other forms of savings.
Finally on average people of that generation tend to save more than they need and still have money leftover when dying.
So based on that I would say don’t expect heavy liquidation from the boomers ever.
Yeeeep exactly. We have pretty good data on this nowadays. I have seen some research from the french INSEE, equivalent probably exist from the OECD if you search. The data is a pita to collect and compare but it supports this scenario.
Anecdotally, I've never seen so many folks laid off on LinkedIn since I've been on the platform. Some are going on 3+ months. Recruiter spam is at all time lows. Are these companies getting by with less?
They must be. I’ve been out much much longer than 3 months and I’m ruined now.
I’ve had recruiters contact me talking about these roles they had that look like a perfect fit, nearly all of them ghosted me before any interview could happen.
It’s totally an employers market now. Out of the few interviews I’ve managed to scrap together most have been shockingly hostile, feeling more like an interrogation than an interview. And I’m not just talking about tech companies, even the non tech companies seem to be doing this now.
There's a worker's rights movement sweeping large parts of the workforce right now. Businesses are being defensive, trying to lower expectations. It's a bit of a game of chicken; they're not actually "making due", but if they show their weakness, it gives labor an advantage. So they're feigning strength.
Well, there was a what, hundred year effort to poison the reputation of unions—which absolutely succeeded. But management won so completely, that labor is starting to remember why they created unions in the first place.
Which is to say: you're right, but times may be changing.
There is a UPS strike right around the corner. More than 340,000 workers are set to go on strike on August 1 & they have hundreds of millions saved in strike funds.
Every actor and writer in Hollywood is also on strike against the big studios.
Unionizing is happening at its fastest clip in decades right now.
It took me six, and I had to accept a contract-to-hire position. I’m feeling pretty fortunate nonetheless, as it’s in an industry I wanted to get into, but it will still be another relief when I (hopefully) get that W-4.
Don’t lose hope. Things can seem hopeless until one day, they aren’t.
Our company is going all-in with outsourcing. Mostly Central/Eastern Europe. Only new employees are juniors or directors and above. The middle is being squeezed out massively.
The excuse is always that the company has particular expertise (they really don’t)
I guess the real question is do they have to be competent if they can hire 3 of them for the price of 1 in the US?
Edit: Thought I would add my current experience with this. My company is replacing contracted staff with permanent staff but out of South / Central America. The salaries are pretty much 1/4 of the US salaries. The people I am given to thumbs up / thumbs down (and that's very much what it is) are just ok. A couple are good but the rest are meh. I am allowed to thumbs down maybe 1 out of every 4 before I get push back. So this is very much a real thing where the US engineers are stuck filling in the gaps when the company onboards very cheap but not very good engineers.
I am curious to see how this plays out in the long term
This is true for most of us under the c-suite. But for those in the CTO/CFO, etc. role it makes financial sense for them to chop labor costs even if projects take a little longer. It just means the few competent engineers have to work 2x as hard for the same salary. I hate it.
Agreed. There’s only so much you can cut costs. I feel like that’s the only focus for most companies now, not expanding revenue/markets, unfortunately.
Or: does the incompetency only become apparent in 6-12 months, enough time for the CTO to perform another sleight of hand and distract people (or quit and move on)
I think given the insanity we saw in 2021 with employees having the best upperhand they've had perhaps in a generation, we were due for some snapback. I'd refrain from worrying about anything long term until the end of this year.
Every so often I set my LinkedIn profile to open to work to see what rolls in. In June, I was getting maybe 1/4th of the interest that I was in 2022. I am still confident I could find another position if needed, probably at reduced pay.
The people I see struggling on LinkedIn that I know are all people I wouldn’t hire. Maybe its just the toxic people that are vocal enough for me to notice? Just my anecdote and doubt it reflects the wider market.
On the hiring side, it seems to be harder than ever to get qualified candidates. We’ve given up even trying to tech screen and hire based on “attitude”. I feel stuck in a lose lose situation where I either OK a subpar candidate and hand hold them or continue to do all of the work. I suspect this has to do with the boring unsexy nature of the company, but it was never this bad in the past.
> On the hiring side, it seems to be harder than ever to get qualified candidates. We’ve given up even trying to tech screen and hire based on “attitude”
Pretty basic. Three one hour sessions with a manager, engineers, and final round with a director or VP. Sometimes we will do an extra session for more senior roles to follow up on stuff.
Do you have the option of just not hiring anyone if no candidates come through that the team feels good about?
I had one particular role where our team had the same issue and eventually really ticked off higher management when we kept open vacancies on the team for too long. They effectively said fill the spot soon or they'd move the headcount elsewhere, making for a really dumb choice between filling a seat or committing to be under resourced indefinitely.
Similar thing here. The more candidates we reject the more scrutiny we get and management starts hinting we should take what we can get. The latest few hires we’ve been told to just ask basic questions and not do any coding stuff.
> The more candidates we reject the more scrutiny we get and management starts hinting we should take what we can get.
This is actually quite rational. Does the team actually need the help? If yes, just hire someone already who is adequately qualified and has a good attitude. These people are super easy to find.
But lots of teams like to have a req open forever while they keep looking for that absolutely perfect candidate on a hundred arbitrary scales who has spent a lifetime working the exact tech stack they have, is totally willing to spend a year crunching leetcode and doesn't ask for much pay. So it's more of a game, like a cat toying with a mouse instead of actually needing to eat.
In that case it is the best decision to close that req and reallocate the funding to some other team who actually needs help right now.
> The latest few hires we’ve been told to just ask basic questions and not do any coding stuff.
Oh this is one that would definitely get me in trouble. I'd rather just not hire someone than make a bad hire, and I expect I'd be pretty ticked off myself if management was telling my team to dumb down our interview process and make it easy for most anyone to fill the seat
We have two open positions on my team and we have yet to fill them as management is “being picky” with candidates. With so many amazing candidates allegedly looking for work, I find it interesting that we haven’t found someone faster.
Every single company that did mass layoffs still has a greater headcount today than it did pre-2020. The layoffs were a function of the overhiring that happened in 2020-2022, nothing more.
Companies hire during growth because that's just what you do to please the shareholders. I highly doubt a large portion of those who were hired were actually productive and producing any value for the company.
> The GIC remains convicted that a rapid and strong rebound is unlikely and the profits recession is apt to worsen before a genuine rebound is possible. Underpinning our thesis are:
> - decelerating real economic activity,
> - weak new orders,
> - high inventories and
> - the lagged impact of higher rates.
> Upcoming headwinds from monetary and fiscal policy, as well as negative operating leverage accompanying falling inflation and diminishing pricing power, are additional factors.
(Formatted list to bullet points for easier reading.)
If the recession is short lived compared to long term goals, would it make sense to invest more every month during that period? Or even shift capital into the market, expecting greater returns when the recession eventually ends?
> No, because to do that you have to have deliberately kept money out of investments, waiting for a downturn.
Not wrong about always being fully invested, but an argument for perhaps have some portion (10-20%) being in bonds to (a) reduce volatility which may help with preventing panic when things inevitably (temporarily) downturn, and (b) having some 'dry powder' available for rebalancing (sell high, buy low).
The returns of the S&P 500 was 0% between 2000 and 2010, but if you had ~20% bonds you actually got positive returns:
There is a simple algorithm one can use to determine how much to put in or take out based on what the market is doing month to month. I don't remember the name of it. But if the market sector is going up you increase investment by X%. Going down decrease investment by X%.
I think it works mostly because it avoids going all in at the top and all out at the bottom. Which is the strategy a lot of naive investors end up doing.
> This is the purpose of capitalism (i.e. acquiring capital).
Took me way too long into my professional career to realize this, and really COVID was a red pill for me. I thought my job was about acquiring status and accomplishments, but no, it's just a tool to acquire appreciating assets (stocks and a house). Keep your costs down, and buy as much as you can or you will end up on the rat race treadmill until you die.
> > This is the purpose of capitalism (i.e. acquiring capital).
> Keep your costs down, and buy as much as you can or you will end up on the rat race treadmill until you die.
This is a sad reality of the system. It's not built for people to prosper individually or societally, it's about getting people who have money more money. Sure, as a side effect this gives the lucky few the resources to acquire what they need reliably; but often that means giving up your enjoyment of life to pursue investment.
> The less you eat, drink and buy books; the less you go to the theatre, the dancehall, the public house; the less you think, love, theorise, sing, paint, fence, etc., the more you save – the greater becomes your treasure which neither moths nor rust will devour – your capital. The less you are, the less you express yourown life, the more you have, i.e., the greater is your alienated life, the greater is the store of your estranged being. Everything which the political economist takes from you in life and in humanity, he replaces for you in money and in wealth.
> The perpetually growing economy on which this strategy and associated worldview are based is not a safe assumption
Why not? What is the counter-factual (i.e., what should we assume instead and what actions should be taken)? How do I organize my life, finances, and retirement investments otherwise?
Neither is assuming it is going to come tumbling down all of a sudden. Bears have lost out over and over barring a handful of lucky and well timed bets.
So far the economy growing during your lifespan has been the correct assumption.
Close to 60% of the market gain this year is the Big Tech 7 (this kind of top-heavy weighting tends to foreshadow bad economic events). The yield curve is still inverted at historic levels. There is something fundamentally very wrong in the US and global economy and it may not have manifested fully yet but it will. We're bullish for now but for how long.
They're different; notably, the crypto market is a device for transferring money from the impatient to the rug-pullers, who seem to be patient until they become invisible and unfindable.
115 comments
[ 2.9 ms ] story [ 152 ms ] threadThe bear hits from above to below: the object is falling. A "bearish" market is pushed downwards.
I’m not sure I understand why using bear/bull terms makes one full of themselves?
2) People in the software industry, also extremely full of themselves.
The real origin of the terms is from the early 1700: "seller of the bear skin before the bear is caught" - old proverb - was called the player that tries to deliver goods after their price has fallen (so a seller in advance). In 1709 the term was in fact 'bearskin'.
Ten years later the "bull" was introduced as a counterpart - this time probably with relation to the images.
https://www.merriam-webster.com/words-at-play/the-origins-of...
> The bear came first. Etymologists point to a proverb warning that it is not wise "to sell the bear's skin before one has caught the bear." By the eighteenth century, the term bearskin was being used in the phrase "to sell (or buy) the bearskin" and in the name "bearskin jobber," referring to one selling the "bearskin." Bearskin was quickly shortened to bear, which was applied to stock that was being sold by a speculator and the speculator selling stock.
...
> At about the same time, another animal symbol made its appearance in the marketplace. The term bull originally meant a speculative purchase in the expectation that stock prices would rise; the term was later applied to the person making such purchases. The animal seems to have been chosen as a fitting alter ego to the bear. Thus poet Alexander Pope wrote in 1720:
> > Come fill the South Sea goblet full;
> > The gods shall of our stock take care:
> > Europa pleased accepts the Bull,
> > And Jove with joy puts off the Bear.
> This eighteenth-century animal imagery caught on, and bears and bulls have been in the stock market ever since.
I'm not really satisfied with the bull explanation either, as it sounds a bit tauotological, but whatever.
In short,
> all those senses ("horn thrust and paw slam", "domesticated vs savage") are backformations. We adopted them because they made sense.
But now, about
> ridiculous folklore etymology someone made up (no offense, and apparently my guess is not right either)
It does not work that way. An etymology as an history of a term will produce a chronicle, not yet a meaning: in 1709 somebody started to use "bearskin" out of the proverb, etc. But there is not just that: there is the meaning of terms that we recognize during that development - "horn thrust and paw slam", "domesticated vs savage", as I wrote nearby. So, what I wrote in the original is the meaning that came after the origin - what is intended (or part of what is intended). In fact, "bear" (in market speculation) comes from "bearskin", but where did they take the "bull" from (image that was construed to have a bear as a counterpart)? There you have to reason about the terms and construct a working image.
There is no need to call it "ridiculous": it is normal sense attribution for jargon creation.
Edit:
in fact, for a study of the origin you can also consult Investopedia, "Where Did the Bull and Bear Market Get Their Names?", at https://www.investopedia.com/ask/answers/bull-bear-market-na...
where you will find foremostly the images of their ways of attack. Then the origin, the "bearskin jobber", and the need to have a counterpart. Then it noted, importantly, that bets on bull and bear fights were very popular in the past centuries - which can be another origin of using those animals for a bet.
“A bear market is a financial term used to describe a prolonged period of declining stock prices, typically by 20% or more, across various financial markets. During a bear market, investor confidence is low, and there is a prevailing sense of pessimism about the economy's future performance. It is the opposite of a bull market, which is characterized by rising stock prices and increased optimism.”
It’s kind of cool to have a tutor like this. Wish it could teach math.
No actual animals involved.
Limited supply of shares and financial products to buy and near infinite, constantly replenishing, demand for putting the money somewhere. Until the pensions get emptied (not happening for the next few decades) the trend can only be up.
Money need to go somewhere.
And yes, this means that it is nearly totally decoupled from "fundamentals". Same as with real estate and housing.
Unless we actively force this money into the economy and wreck pensions, university endowments and charities funds, there is no way out anytime soon. The Boomers need their money somewhere.
And yes. This is why productivity is down, every company has massive war chest and noone invest in fundamentals. The rise of the MBA is due to Boomers 401k, not to something fundamentally useful there.
So based on the boomer 401k theory, we should see steady declines as their investment rate goes net negative by 2030?
The returns do not matter. What matters is finding something.
Also it depends on share buybacks. If they mostly sell to shares buybacks, every sale actually prop up the price. Also uni endowment and charity funds keep growing with rules to never take money out, so they will be the one buying from pensions.
I highly expect stuff to stay bear until we actively work on it.
Where else would what go?
> If they mostly sell to shares buybacks, every sale actually prop up the price.
Only if companies have enough cash to do so. Buybacks made sense more sense in a low interest rate environment, but are riskier if they have to borrow to buy their stock back.
> Also uni endowment and charity funds keep growing with rules to never take money out, so they will be the one buying from pensions.
But again, is this amount as much as the amount that is to be sold, and at what price?
Dunno about that one. Liquidity in even low-volume tickers seems to be "just fine". Market makers see to it that everyone who wants a share can get one, by any means necessary.
>Unless we actively force this money into the economy and wreck pensions, university endowments and charities funds
Or the REITS and SLABS so many are invested in turn out to be worth a lot less than we thought they were. Where's my Jenga set?
Liquidity is high because the market makers role has exploded and they invest a lot to make sure it stay high.
>Liquidity is high because the market makers role has exploded and they invest a lot to make sure it stay high.
This is another way of saying that organic liquidity is low and we needed a middleman to preclude actual price discovery, for reasons.
Not an economist.
That's a massive amount of new money that has to go somewhere every month. Majority of these plans offer some sort of index fund variety instead of individual stocks the exception being that most of the smart publicly traded ones also offer the option to purchase employer stock as well. With all this money needing to find a home every month, index funds are as close to a guarantee of equities going up over time as you can get.
https://www.bls.gov/opub/ted/2021/67-percent-of-private-indu...
- Since people are constantly retiring, and selling the stocks they are holding at that point: Wouldn't that balance out the limitless demand problem? Boomers/Gen X/Millenials/Gen Z all have around the same segment of the population according to (https://www.statista.com/statistics/296974/us-population-sha...) wouldn't things earlier generations sell get distributed among the next generation, preferentially going to Gen X who will be at their peak earning potential at that point. (Which in turn will sell to Millennials and so on) - How would you actively force money into an economy?
2. Most Boomers are only starting to retire. And they have enormous needs. Plus university endowments, charities funds, etc also are institutional investors. The problem is do they sell. These days usually they only sell to shares buybacks, which actually reinforce the problem.
3. Move pensions to a government tax funded redistributive system, so the income of today pay the pensions of today. Tax land and housing ownership heavily, except for primary house (with a limit based on family size probably for primary house). Heavily (massively. Like 90% at least) tax inheritance. We have good economics support for these, even in heavily capitalistic and neoliberal economic circles. The problem is political. The Boomers will not vote for it, it would take away from them.
Our problem right now is that the money is not spent. The earlier you retire to spend it the better we are as an economy. So yes. Go for it. That is the point :)
A problem in the US is that the system essentially forces people to hoard more and more and more because there is no useful social safety net. So you are forced to constantly think what if. What if I live longer than average? What if there are unexpected expenses? So the only responsible answer is keep working and hoarding for those what ifs. It's not a healthy system since it encourages the hoarding but also because it prevents people from enjoying a longer retirement.
That's not at all what I meant. Maybe hoarding is the wrong word, couldn't think of another one. Saving is great, but what is the amount one needs to save?
What is your target amount in investments to be able to retire?
What I mean is that in the US there is a neverending pressure to save more and more because you never know what might happen and there is no social safety net so it's all on you. So you must keep working and saving to cover every conceivable future edge case, so it feels like no amount will ever be enough.
The goal is for you to spend it. Because hoarding it like this to pass it to your children actually make it harder for them to have a good life and for the economy to grow.
But i can also promise you that the economics are definitely supporting this reading.
Your argument also fails to account for inflation. More money spent instead of saved means more competition for the same amount of goods and then we get what we have now, increasing rates and cost of goods.
So even if the retirement impacted it, it will take a long time. If ever.
Finally on average people of that generation tend to save more than they need and still have money leftover when dying.
So based on that I would say don’t expect heavy liquidation from the boomers ever.
whales with huge amounts to invest simply collude to buy everything in size. they add, add, add, add to their positions.
This draws in everyone else. index funds automatically, and hedge funds that need to "outperform" the indexes.
Then the whales sell.
On the average they make money with this methodology.
What I wrote is the actual truth of the matter. And yet it gets downvoted. I suppose because people would rather believe something else. oh well!
I’ve had recruiters contact me talking about these roles they had that look like a perfect fit, nearly all of them ghosted me before any interview could happen.
It’s totally an employers market now. Out of the few interviews I’ve managed to scrap together most have been shockingly hostile, feeling more like an interrogation than an interview. And I’m not just talking about tech companies, even the non tech companies seem to be doing this now.
They’re going to win. They have a much bigger war chest than me.
Union participation in the US is a rounding error.
Which is to say: you're right, but times may be changing.
There is a UPS strike right around the corner. More than 340,000 workers are set to go on strike on August 1 & they have hundreds of millions saved in strike funds.
Every actor and writer in Hollywood is also on strike against the big studios.
Unionizing is happening at its fastest clip in decades right now.
Don’t lose hope. Things can seem hopeless until one day, they aren’t.
The excuse is always that the company has particular expertise (they really don’t)
Edit: Thought I would add my current experience with this. My company is replacing contracted staff with permanent staff but out of South / Central America. The salaries are pretty much 1/4 of the US salaries. The people I am given to thumbs up / thumbs down (and that's very much what it is) are just ok. A couple are good but the rest are meh. I am allowed to thumbs down maybe 1 out of every 4 before I get push back. So this is very much a real thing where the US engineers are stuck filling in the gaps when the company onboards very cheap but not very good engineers.
I am curious to see how this plays out in the long term
The people I see struggling on LinkedIn that I know are all people I wouldn’t hire. Maybe its just the toxic people that are vocal enough for me to notice? Just my anecdote and doubt it reflects the wider market.
On the hiring side, it seems to be harder than ever to get qualified candidates. We’ve given up even trying to tech screen and hire based on “attitude”. I feel stuck in a lose lose situation where I either OK a subpar candidate and hand hold them or continue to do all of the work. I suspect this has to do with the boring unsexy nature of the company, but it was never this bad in the past.
I’m curious what your interview process is like.
I had one particular role where our team had the same issue and eventually really ticked off higher management when we kept open vacancies on the team for too long. They effectively said fill the spot soon or they'd move the headcount elsewhere, making for a really dumb choice between filling a seat or committing to be under resourced indefinitely.
This is actually quite rational. Does the team actually need the help? If yes, just hire someone already who is adequately qualified and has a good attitude. These people are super easy to find.
But lots of teams like to have a req open forever while they keep looking for that absolutely perfect candidate on a hundred arbitrary scales who has spent a lifetime working the exact tech stack they have, is totally willing to spend a year crunching leetcode and doesn't ask for much pay. So it's more of a game, like a cat toying with a mouse instead of actually needing to eat.
In that case it is the best decision to close that req and reallocate the funding to some other team who actually needs help right now.
Oh this is one that would definitely get me in trouble. I'd rather just not hire someone than make a bad hire, and I expect I'd be pretty ticked off myself if management was telling my team to dumb down our interview process and make it easy for most anyone to fill the seat
Struggling to copy / paste from my phone but the GIC is always worth a read
“The GIC remains convicted that a rapid and strong rebound is unlikely…”
> The GIC remains convicted that a rapid and strong rebound is unlikely and the profits recession is apt to worsen before a genuine rebound is possible. Underpinning our thesis are:
> - decelerating real economic activity,
> - weak new orders,
> - high inventories and
> - the lagged impact of higher rates.
> Upcoming headwinds from monetary and fiscal policy, as well as negative operating leverage accompanying falling inflation and diminishing pricing power, are additional factors.
(Formatted list to bullet points for easier reading.)
* https://awealthofcommonsense.com/2022/05/how-long-do-bear-ma...
* https://awealthofcommonsense.com/2022/07/investing-in-a-bear...
If you have a long-term goal (e.g., retirement) then generally you shouldn't bother worry gyrations too much:
* https://awealthofcommonsense.com/2014/02/worlds-worst-market...
Simply put away a little every month in an automated fashion and things will generally be okay:
* https://ofdollarsanddata.com/just-keep-buying/
It only works if you can predict the downturn before it happens, and how low things will go.
This is sub-optimal from a returns perspective:
* https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
Not wrong about always being fully invested, but an argument for perhaps have some portion (10-20%) being in bonds to (a) reduce volatility which may help with preventing panic when things inevitably (temporarily) downturn, and (b) having some 'dry powder' available for rebalancing (sell high, buy low).
The returns of the S&P 500 was 0% between 2000 and 2010, but if you had ~20% bonds you actually got positive returns:
* https://www.forbes.com/sites/investor/2010/12/17/the-lost-de...
See also Japan in 1980s: having some component in (even domestic JP) bonds allowed you to rebalance out of a rising market over time.
Waiting for the dip is generally sub-optimal for returns:
* https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
I think it works mostly because it avoids going all in at the top and all out at the bottom. Which is the strategy a lot of naive investors end up doing.
Took me way too long into my professional career to realize this, and really COVID was a red pill for me. I thought my job was about acquiring status and accomplishments, but no, it's just a tool to acquire appreciating assets (stocks and a house). Keep your costs down, and buy as much as you can or you will end up on the rat race treadmill until you die.
> Keep your costs down, and buy as much as you can or you will end up on the rat race treadmill until you die.
This is a sad reality of the system. It's not built for people to prosper individually or societally, it's about getting people who have money more money. Sure, as a side effect this gives the lucky few the resources to acquire what they need reliably; but often that means giving up your enjoyment of life to pursue investment.
> The less you eat, drink and buy books; the less you go to the theatre, the dancehall, the public house; the less you think, love, theorise, sing, paint, fence, etc., the more you save – the greater becomes your treasure which neither moths nor rust will devour – your capital. The less you are, the less you express yourown life, the more you have, i.e., the greater is your alienated life, the greater is the store of your estranged being. Everything which the political economist takes from you in life and in humanity, he replaces for you in money and in wealth.
- Karl Marx
The perpetually growing economy on which this strategy and associated worldview are based is not a safe assumption
Why not? What is the counter-factual (i.e., what should we assume instead and what actions should be taken)? How do I organize my life, finances, and retirement investments otherwise?
So far the economy growing during your lifespan has been the correct assumption.
Increasing efficiency or technological capability could have the same outcome
Your future self will be glad you did!
- Warren Buffett