Is it when retail are forced to sell their positions, even at a loss because they lack the funds to cover bills, etc?
So like recession times? Is it when unemployment rates are high? is it when disposable income is at its lowest? is it when people can't affford new triple A games? etc.
The stock market is seeing a lot of chop in the more popular sectors like A.I. despite earnings beats. In a prediction market - you wouldnt make much by predicting an obvious beat, or an obviously profitable year. But you can make enough now to outpeform the sp500 or even investing in those companies directly.
For example, the old school of thought was, if a company is profitable and its financials are clean, its stock would suredly rise. But this isnt how the stock market works anymore. Teslas balance sheet looked way worse than fords yet as fords stock price went down, tesla skyrocketed.
Now the same is holding true for many other stocks as well, and this is all thanks to hedging and excess options activity, turning the market into a giant casino instead of an instrument of debt as was intended.
Thus, the rise of prediction markets. Take blackberry for example, double earnings beat and the stock loses substantial value immediately due to over leveraging - no fault of the company or shareholders.
Meanwhile, a bullish player in the prediction market walked away with an actual profit by betting the company would beat earnings.
While one is a marginalized loss (the stock) and the other is total loss, the position sizing eliminates this discrepancy. A shareholder of blackberry loses 13% on a double beat - that 13% lost had the same profitibality as the entire investment in the prediction market 3-fold. Which brings me to my next point - diversification.
Eventually someone will work out the math and create a firm based entirely on prediction markets using the same diversified/model based portfolios which exist in the stock market, betting on 100's of companies to be profitable or not YOY.
This is going to be so toxic for the economy becouse it takes money out of the instrument of debt and puts it into a market where the only 2 winners are the broker and the contract holders compared to the stock market where the third winner is the company whos equity increases with higher participancy.
Unfortunatley, with the amount of leveraging, insider trading, and nonsensical market moves happening in the stock market, a future of prediction market dominance is all but guaranteed.
All these outlets are copying the same story with the same headline. If you actually read the article instead of just assuming he thinks the markets will do well, it's all about his never making public predictions in the first place. Considering most people just read headlines, how does this affect the average retail investor? lol. You could instead make the subject "Why Warren Buffett isn't Predicting the Stock Market Will Do Well in 2025" and it would mean the SAME EXACT THING.
One simple explanation
With all of the evidence that Buffett is decidedly bearish about the stock market, why isn't he predicting a crash in 2025? There's one simple explanation: The legendary investor avoids making stock market predictions at all.
In his 1992 letter to Berkshire Hathaway shareholders, Buffett wrote:
We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie [Buffett's longtime business partner Charlie Munger, who died in 2023] and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.
The world right now is showing three signs which are very similar to exactly what happened before the Great Depression in 1929 and the dot com crash of the year 2000.
Which means most experts around the world are expecting a major market crash to happen, and we need to look at the strategy of what investors like Warren Buffet are doing right now and copy that to protect our wealth.
The first metric which is very similar is a valuation multiple in the stock markets called the Shiller P/E ratio. Now whenever it goes above the point of 32, it means a major crash is expected, exactly what happened in 1929 and the year 2000. And right now this ratio is at 39, which is 23% higher compared to the previous benchmarks, which means it's extremely risky.
Now, the second thing is actually this very interesting concept called the yield curve inversion. What does it mean? It basically means that, you know, in the short term, when you put money in the bank in an FD, the bank gives you higher return compared to when you make an FD for a longer duration. Now, this seems very counterintuitive, but this is one of the best indicators available in the world economy today to be able to predict a recession. And this yield curve inversion is showing up in the US market since October of 2022 to December of 2024.
( FD is same as HYSA in USA)
Now, while it has normalized and become okay right now, most economists are expecting that 18 months from December 2024 is where the crash will happen.
Now comes the third sign, which is concentration of valuation of the stock market index in a handful of stocks. And we are seeing exactly this in the S&P 500 or the US index, where out of 500 stocks, just seven stocks called the Magnificent Seven AI stocks hold 47% the value of the index. And most financial analysts around the world know that AI right now is in a massive bubble, which means over the next six to twelve months, a major crash is expected and the US stock market may fall by 30 to 40%, which will have ripple effects around stock markets around the world.
Now, in such a time, what is Warren Buffet doing? Well, right now practically close to 28% of his portfolio is just in cash and bank deposits, which is the highest ever allocation he's made to such assets in history. Earlier, he would maintain his cash and bank deposit portfolio share to just about 10% because he's expecting a major crash, which is why I would recommend, you know, you really need to look at diversification in your portfolio. Possibly have 20% of your portfolio in gold, about 20 to 25% in cash and bank deposits, and please, please diversify away from risky assets.
Given all the macroeconomic factors at play now, we can't keep thinking that the market will do nothing but go up. So realistically, when do expected the downward spiral on stocks and valuations to begin? With the next 2-3 months? In 6 months? In a year?
With another year wrapping up, I’m curious how people here are thinking about next year.
What do you think will be the biggest drivers of returns by the end of 2026? Are you making any portfolio adjustments now based on those views?
It's going to be an interesting year for sure..lol.
I wrote this last night, and I wanted to wait until the end of the day to confirm my thesis. Today, the Nasdaq ended at +333.14 on nothing except Fed saying that they will turn on the printing machine, which will devalue the dollar even more and send inflation to the moon. Everything below was my thought process last night. Additionally, the post below really helps explain why we're in deep trouble, but all of the retailers are focused on the stock market, and BlackRock and JPMorgan are telling us that we're in a recession (Stagflation).
https://www.reddit.com/r/WallStreetbetsELITE/comments/1jx4qr9/the_bond_market_crisis_explained_for_you_regards/
As I sit here watching the Nasdaq futures spike up 288 points, I can’t help but feel uneasy. With the combination of tariffs, an escalating trade war narrative, and unsettling movements in the bond market—particularly the 10-year and 30-year yields—it’s hard not to see this as a potential prelude to a market crash or at the very least, the beginning of a bear market. While nothing is ever certain in the markets, the recent behavior we’ve been witnessing isn’t just noise—it’s a glaring signal that something is fundamentally off.
When the Nasdaq starts swinging 500 points or more in either direction for several consecutive days, that level of volatility is not just abnormal—it’s a red flag for deeper market instability. This pattern often precedes or accompanies systemic crises and tends to be driven by a combination of macroeconomic disruption, loss of confidence, and major repositioning by institutional investors.
There are typically two major factors that contribute to such extreme and sustained volatility.
First, extreme volatility reflects a market grappling with uncertainty, crisis, or both. Markets do not move wildly without cause. These kinds of large, daily price swings often indicate that investors are trying to price in the unpredictable—be it a geopolitical threat, economic policy shifts, or a financial system under pressure.
What’s especially concerning now is that we’re not dealing with just one variable—we’re contending with all of them. The current economic backdrop includes unresolved trade tensions, shifting policy (playing chicken with a country that had no problem killing 40-80 million of its citizens), and geopolitical conflicts with unclear outcomes. On top of that, corporate earnings season has revealed a growing sense of uncertainty within companies themselves. A number of major firms have stopped issuing forward guidance, signaling that even CEOs and CFOs are unsure about what lies ahead. One of the most notable examples was Target, which essentially admitted, “We don’t know.” When corporate leadership starts to lose visibility, that lack of confidence trickles down through the markets.
The second driver is institutional repositioning. When large funds start rapidly rotating out of certain sectors—most commonly tech and growth—and into safer or more defensive holdings, the size of those movements alone can send markets soaring or tumbling. In addition to this rotation, institutions may begin to hedge more aggressively or unwind leveraged positions, creating massive capital flows that can spike volatility. This is why we're seeing large green and red days for no reason.
Interestingly, several articles have surfaced this past week discussing these very moves—rotations, de-risking, liquidity tightening—but I initially dismissed them as overblown headlines. In hindsight, I think they were onto something, and I wish I had saved those links for reference. The market may be telling us more than we realized.
These patterns of extreme volatility aren’t unprecedented. In fact, we’ve seen them during some of the most turbulent periods in recent history. Two notable examples are the 2008 Financial Crisis and the COVID Crash of 2020.
During the 2008 collapse, from September 15 to late November, the market experienced around 30–40 trading days of repeated 500+ point swings in the Nasdaq. Some notable days include:
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October 13, 2008: +11.8%
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October 15, 2008: -8.5%
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October 16, 2008: +5.5%
These weren’t isolated events—they represented a market that was fundamentally broken and trying to reprice risk in real time.
The COVID Crash followed a similar pattern. From February 20 to March 23, 2020, the Nasdaq saw around 23 trading days of violent swings:
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March 12, 2020: -9.4%
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March 13, 2020: +9.3%
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March 16, 2020: -12.3%
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March 17, 2020: +6.2%
In both cases, the VIX (Volatility Index) spiked sharply and remained elevated for weeks. Interestingly, we’re seeing similar VIX activity this week—bouncing up and down erratically—yet another clue that something deeper may be brewing beneath the surface.
Markets are complex and unpredictable, but they also follow patterns. When you see repeated, outsized swings like we’re witnessing now, history tells us it’s rarely a coincidence. It’s often a sign that the system is under stress and that market participants—both retail and institutional—are struggling to price in risk accurately. Whether we’re on the cusp of another crash or entering a turbulent bear market, the warning signs are flashing.
This isn't normal.
As I am rereading this, CNBC is reporting that retailers are providing exit liquidity for institution to exit.
Retail investors are running head first into this topsy-turvy market Retail investors are running head first into this topsy-turvy market
https://www.cnbc.com/2025/04/10/retail-investors-are-running-head-first-into-this-topsy-turvy-market.html
The current problems that we have are
-
Bond market crisis
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Stagflation scenario
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Geopolitical threat
-
Economic policy shifts
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Mortgage rates surge over 7% as tariffs hit bond market. https://www.cnbc.com/2025/04/11/mortgage-rates-surge-tariffs-bond-market.html
The money printer will make this worse. Lowering the rate will make it worse. Increasing the rate will make it worse. There is no easy way out of this.
The resilience of the current price of equities/S&P 500 index, when compared to the price movement and market sentiment in 2022 seems quite surprising.
We had a crash in 2022, mainly in Tech companies. In hindsight, it was considered to be mainly caused by interest rate rises, lay-offs in the tech sector, Big Tech Antitrust Investigations in the USA, Europe and, I think even in China (Jack Ma becoming absent from public view for a little while).
Yet, between Jan 2022 (Shiller CAPE just under 37) and Oct 2022 (Shiller CAPE around 27) the S&P500 fell by 23% or so (Meta fell by around 70%, and was a bargain), and even Berkshire fell by around 16% or similar (to demonstrate that the price drop was wide spread and even reached 'non-tech' companies). So you can see from this picture, that the rationale for the pessimism was very concentrated, and not wide spread across various areas of the local or global economies, even though the price drops were.
Looking back at that, even when experiencing it at the time, IMO nothing had fundamentally changed; the Tech companies' products would still be used by billions of people (even if they were broken up), they were still going to generate revenues and profits, have high margins and there was no real recession or fears of one that I can remember. No concerns about the government, or the SEC or any other core organisation. No issues with reduction in consumer demand etc. So, overall, it was just this one tech related issue (as perceived by market participants, maybe a little bit of interest rates thrown in), and yet, the market shed 23% in 10 months or so.
On the other hand, the concerns that people seem to be having now are numerous, varied, disparate and fundamental.
Things people have talked about with regards to the USA now, most, not all, of which were not remotely concerning in 2022:
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Market is priced quite high, maybe overvalued - S&P 500 Shiller CAPE of just under 38 in Jan 2025, and currently probably around 33. 60% of the global stock market cap as presented by MSCI? vs 25% or so of Global GDP. For context, historical average of CAPE ratio is around 17.
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It took 7 months for the S&P 500 to drop 19% in 2022, in 2025 it did that under 2 months (before recovering some), so that is a much sharper fall than in 2022.
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Concerns about Tariffs and Trade wars and its impact on consumer spending.
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Effect of the above on inflation, which was just about to be gotten under control.
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Businesses cooling off from investments due to the chaotic and unpredictable environment.
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Unemployment at historical lows in USA, that means Fed might be limited in what they can do with lowering rates.
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Spooked bond market and rising yields due to US Govt Debt sell off.
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Concerns about insider trading and/or market manipulation by the administration and those who are close to it.
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Concerns about the competency of the current US administration (handling of Signal Chat leaks, Peter Navarro qualifications or lack thereof and the bizarre Tariff formula, $Trump and $Melania kript0 pump and dump, DOGE handling or lay-offs, among many other things).
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American reputation and brand deterioration amongst its close allies and trading partners.
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Concerns about whether laws are being applied with as much integrity as they used to be and equally for the rich and the average person, resident citizens vs those on Visas etc.
There may be other things which I may have missed. (I haven't mentioned the many 'little issues', like Gabbard declaring her residency in Texas and voting in Hawaii etc. etc.)
So, it appears that there are far more, wide ranging, diverse, and fundamental reasons to be concerned and pessimistic now about the future and market prices, than there were in 2022, and yet the market seems more optimistic than it should be, based purely on how much it has dropped when compared to 2022, at least until now.
Is that a fair take?
Should there be more pessimism as expressed in the price drops of equity markets, than has occurred thus far? Perhaps there is pessimism in the mainstream discourse but it doesn't appear to be reflected in the market prices to the same degree.
After the early April decline and subsequent partial recovery, I have heard many people say this was not the "real crash" and to wait for it before making any moves. How likely is this to be true in your opinion? Can the dead cat bounce track sideways for 4+ months?
Is anyone else starting to feel the "cracks" for 2026? 2025 has been a massive year for AI and the s&p 500, but honestly, this "santa rally" feels a bit too perfect. i’m looking at my portfolio and for the first time in years, i’m actually worried about the concentration risk in tech. we’ve got hyperscalers like MSFT and GOOG spending $500B on infrastructure, but the forward P/E ratios are getting goofy.
After Trump got office, uncertainities in the market increased as he would flip flop in short time.
Are you guys trimming your mag 7 winners to lock in 2025 gains, or are you riding this into 2026? i’m genuinely considering a 20% cash buffer just to see how the dust settles in january. tell me your exit plan or why i’m being a paranoid bear. because these "uncertainties" are starting to look like a very real wall now.
These companies are left holding up the stock market. If they fall, the entire market falls. And it’s the opposite if they all go up the whole market goes up. But the chart tells a different story of the recent trend. They are going up but rest of market is going down. Here is what i think of the stocks left holding up the market.
AAPL - weakness in innovation, losing growth
MSFT - might be overbought here
META - good ad business but questionable ai product profitability
NFLX - high pe might give back massive gains its had
NVDA - ai sales increase already priced in. everyone says 170 eoy yet price is stalling. People relying on eoy to save them usually not a good thing.
AMZN - aws has competition with new datacenter companies emerging. Needs to take on more debt just to maintain its margin intensive shipping business
GOOG - losing search dominance, ai is good but not perfect yet, to maintain ai dominance intensive spending must happen will affect earnings
COST - taking a hit from tarrifs, it had a monster run and might give back a lot of gains
TSLA - lead roles stepping down, doesn’t look good for promises of products happening.
Almost 90 days ago I made a post in an alternate subreddit regarding why I believe the stock market will begin to crash within 120 days -- Essentially the crash will begin by the day before the election. I have included that entire post below -- and all of these reasons still remain relevant... Moreso than ever with the news from the Middle East today. Obviously the port strike is expediting things today. Nonetheless -- I think the post is super relevant, and for some reason, the moderators of WSB deleted the post after 6 hours, despite it receiving over 2.2 million views, and over 1100 shares.
The ride the market has been on, quite simply, has been insane.
According to generally accepted wisdom -- by investing in the S&P 500, you can anticipate to double your money, on average, every 6.5 years. I'm not 100% certain as to why that's the accepted figure -- as calculating the last 14 6.5 year periods the average rate of return has been 64%.
Below is a chart of the average price/rate of return of GSPC (The S&P) over the last 14 cycles.. I couldn't easily find data prior to this..
| Year | GSPC Price | 6.5 year return on investment |
|---|---|---|
| 1933.5 | 10.91 | |
| 1940 | 12.05 | 10.44% |
| 1946.5 | 18.43 | 52.95% |
| 1953 | 26.38 | 43.13% |
| 1959.5 | 58.68 | 122% |
| 1966 | 92.88 | 58% |
| 1972.5 | 107.14 | 15% |
| 1979 | 99.93 | -7.22% |
| 1985.5 | 191.85 | 91.90% |
| 1992 | 408.78 | 113% |
| 1998.5 | 1133.84 | 177% |
| 2005 | 1181.27 | 4.10% |
| 2011.5 | 1320.64 | 11.70% |
| 2018 | 2471.65 | 87.10% |
| 2024.5 | 5525.29 | 123% |
While the last two cycles don't necessarily ring any alarm bells -- we have just more than doubled, twice, looking at the last two cycles -- There is one massive, bloated, shit filled elephant in the room... Price to Earnings Ratio.
Historically, the Price to Earnings ratio for the S&P has sat just under 20 (the easiest data I could find puts it at 19.4x between 1974 and 2017 -- I'm not grabbing any arbitrary dates or numbers here). The Median value has it under 18x, and there have even been extended periods of time where it traded at +/- 10x.
Currently -- the P/E ratio sits at 28.71 -- roughly 150% of what is normal.
In the history of the S&P, the P/E ratio has hit this level only 3 times...
Immediately preceding, and then during, the Dot Com Bubble (P/E broke 30 +/- April 2001).
Immediately preceding, and then during, the Global Financial Crisis (P/E broke 30 +/- October 2008).
The quarter after Covid hit. (P/E broke 30 +/- March 2020).
Images aren't allowed in this subreddit -- but if you go to the multpl website you will see we finished trading yesterday, 09/30, at a P/E of 30.07
Historically -- what has happened to the markets after crossing this mark? In all three scenarios, by the time we crossed a P/E of 30, the dam had already started to break.
During the Dot Com bubble, the S&P 500 was already down 19% from its highs, and would fall another 34% before finally starting to recover. By the the time the bleeding stopped, it had lost 47% of its value.
During the global financial crisis, an almost identical story can be told. The S&P had lost 18% of its value by time P/E broke 30, and when it finally bottomed out in February of 2009, it lost 53% of its total value.
Covid, obviously, was a much quicker recovery... as we only fell 32%, and had bounced back in less than 6 months time (reason for which outlined later).
Okay -- so Maybe we have a price to earnings ratio problem, but you're still not sold. What else do we have going on?
Outside of the fact that I firmly believe that the market is overvalued today, I think there are several other major issues that we are facing in the current environment -- and while I could write a diatribe for each, for purposes of succinctness, I'll simply outline them via bullet points below.
Credit card debt is at an all time high, and outside of a brief period after Covid checks arrived, has been rising since 2013.
Younger Americans are in the most trouble with credit card debt. As boomers continue to retire, it will be the working class most disproportionately affected.
Credit card delinquency rates are the highest they've been since 2011.
Auto loans debt and average auto loan payments are the highest they've been at any point in history. Auto loan delinquency rates are the highest they've been since 2010.
The stock market is insanely top heavy right now. The Magnificent 7 (Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA)) now account for 45% of the entire value of the Nasdaq. They account for roughly 30% of the entire stock market combined. As of today -- they are trading at a combined P/E of 42x. A correction in these 7 companies would be absolutely catastrophic for the entire market as a whole.
We are starting to see a weakening of the labor market. Furthermore -- I do not believe the jobs numbers are entirely as they seem. I think many of the jobs 'added' over the last 18 months have been individuals picking up second jobs to help make ends meet. Any reasonable increase in the unemployment rate have absolutely massive consequences.
Many banks are holding on to massive unrealized losses. While this has the potential to hit the regional banks the worst, some of the largest banks -- including Bank of America, Charles Schwab, and USAA have unbooked security losses that are greater than 50% of their equity capital.
Regional banks are at risk due to the massive amounts of US treasury notes they hold that were bought during Covid. In short -- nobody was borrowing money to buy homes or cars. Banks, flush with cash, took said money and bought US T notes with this money so they could earn some interest on it. This was at a time when interest rates were very low. Now that interest rates are high -- demand for these old t notes is essentially non existent, as you buy new t notes that pay a much higher rate of return. If any sort of bank run starts, these banks will be forced to liquidate said t-bills, and they will have to sell them at a loss. If too many people do this simultaneously, the bank will become insolvent -- like what we saw happen with Silicon Valley bank, Signature Bank and First Republic Bank. (Side note -- the failure of these three banks alone was larger than the combined total of bank failures in 2008 during the global financial crisis).
The US government still has a spending problem. Our deficit has grown by $500 million since I started writing this an hour ago.
Global tensions are high -- and rising. Massive protests are erupting all over Europe.
The US is involved in two proxy wars that don't appear as if they will abate any time soon.
The political division in the US is as dramatic as I've seen it at any point in my existence. Perhaps those older and wiser than me can chime in here -- but it seems most are resorting to tribal, identity politics split down party lines.
Commercial real estate is starting to buckle. Covid brought about work from home, and with many offices retaining those practices, or allowing partial work from home, office space supply far outpaces demand. This problem is exacerbated by high interest rates. Most commercial loans are done on 5 or 7 year balloon. When that balloon is bout to come due, the owner of that property will refinance the loan, restarting the 5 or 7 year period to avoid paying off the balance owed on the property. Many of these property owners that refinanced into low interest rates in 2020, during covid, when rates bottomed out -- are now having to get a new loan to keep from paying their balloon. However, with interest rates more than twice what they were several years ago, and vacancy rates skyrocketing, many of these real estate owners will not be able to pay the monthly mortgage on their buildings. Commercial Real Estate foreclosures jumped 117% in March alone.
Housing has become increasingly less affordable for many Americans. For 2022 -- the most recent year I could find data -- a family earning the median US household income, renting a median priced US home, was spending 40% of their income on rent.
Countries are abandoning the US dollar in droves.
I believe some of these issues, on their own, are enough to cause serious economic turmoil. Bundled together, I don't see how we aren't in for a very rude awakening.
This economic downturn may be severe.
In the three times this has happened before -- the action, or lake thereof varied dramatically. During scenario one -- the dot com bubble -- the government largely just let the companies fail. While I was only 11 at the time, my understanding is that there really were no bailouts here because the only people really hurt were the investors in those companies -- unlike scenario two. During the GFC, shuttering banks would have resulted in a complete collapse of the US (and really global) financial system. While I won't get into partisan politics, I'm of the belief that the covid bailouts were entirely unnecessary -- and more importantly for this post -- the reason that the upcoming crash is going to be so insanely problematic.
Bailouts on any level, whether to companies, banks, or directly to citizens, will inevitably increase inflation. I don't think they are on the table for this correction.
People have painted the inflation problem as a result of supply chain issues... And while supply chain issues didn't help, I think the bigger issue, by far, was the sheer amount of money we printed. You cannot make $4 trillion appear out of thin air and expect that every dollar in circulation isn't going to suddenly become worth less money. We just lived through this reality after the Covid printing.
This will largely tie the feds hands. Print more money -- we find ourselves in a cycle of ever increasing prices and higher interest rates.
What happens from here?
I don't know. Don't listen to me. I'm an idiot. Stock market will probably just continue to go up. I'm probably wrong about 100% of this.
The prediction in bold below is what I posted 90 days ago. I now believe the top is officially in -- that we won't see another ATH for a long time.
My Prediction? GSPC/SPY cruise up a tiny bit further, to +/- $5900/$590 -- before retreating to $3500/$350 by 12/2025.
My positions:
Bought 50 $570 10/2 puts at open this morning right at open. I'm up about 18k on them.
Bought 12 $565 10/1 puts at 9:30 CST. I am up about $80 on them.
Bought 35 UVXY $42 Calls exp 10/4 at about 10AM CST. I'm up about $80 on them.
Holding 359 $BITO Calls with a 1/17/25 Expiration.
Holding 7 $450 SPY P with an exp of 9/19/25, and 5 QQQ $400P exp 6/30/25
So for someone who hasn't started investing yet and has money in savings... Would it be better to put the money in a GIC or something guaranteed to grow a bit and then once the crash happens, buy while it's low? There is bound to be some kind of crash the way the economy is going right? Doesn't it kinda feel like things have peaked? Isn't buying at peak not really a good idea?
What does everyone think? If you had 100k from inheritance or something would you still invest it today or would you see how the next year or two plays out?
I'm leaning towards yes we are for crash/heavy correction.
Unsure whether to:
i) Sell all stocks except 1, and put it all into that Oil co thats already quite down
ii) Keep my tech positions and keep cash for fall
iii) Keep my tech positions and just invest cash into Oil co
Warren B has record high cash.
Hey everyone,
I keep seeing people online and in the news / online saying things like “the market is going to crash soon.” “This or that is overvalued”, etc I’m not here to argue whether that’s true or not. I’m just trying to understand what that actually means in practice.
For the people who believe a crash is coming, what do they usually do about it? Do they sell their positions before it happens? Move to cash? Or do most just keep holding and wait it out?
I’m not asking for advice, just curious how people who expect a crash typically react or prepare.
Edit: thank you all! My question is answered, now I know :)
https://www.youtube.com/watch?v=_9c-DkBFS3w
Description:
Stock prices reflect investors’ expectations about the future earnings and risk of the companies they invest in. When expectations or risk change, due to something like nonsensical sweeping tariffs, stock prices can change, and they can change quickly and dramatically.
Falling stock prices do not mean that the market is broken or that the world is ending; they are expected from time to time, and their inevitability should be built into every investment plan.
Obviously the title is a bit clickbait.
But with
•The current ongoing of Trump power that could move the market by 1 tweets
• The current heavy government involvement in the stock market.
• As well as many anonymous Wall Street and top companies back Trump.
• New Feds change coming up and mixed policies that is unprecedented to favor AI and crypto
I kinda have a stupid theory that there may not be a nuclear market crash like many people have hoped anytime soon and anticipated despite the charts and datas say otherwise
Like there’s too much personal interest from within the Trump admisnistration and economy that they won’t let the market crash anytime soon unless he wanted too.
They will keep throwing bandages to anything that point out the weakness just to keep this alive or make any sudden change in policy that is unpredictable/ unprecedented to keep it going.
Like Trump literally revived Intel Stock within months , so you can’t say he won’t do the same to the stock market