Maseratl wrote:
Systems are more quickly adaptive these days, with the mere pressing of a button having tremendous, and immediate, effect.
Look at those "crashes", and it becomes evident that all they represent is anticipatory behavior--P/E's rise, then some dead wood is cleared, and they return to where they were. Some are just a bit early, but if they hold, they will collect dividends the whole time (if there are any).
For the average Joe, this is no problem, unless the specific timing is very personally unfortunate--but one should have enough set aside to ride out these market disturbances.
The only real sustained problem would have been 1929, which may as well be antiquity. Almost 100 years ago! Absolutely archaic systems, the stone age. Now, events are both shallower and shorter., and will continue to evolve in those directions, IMO.
I say this because I have prided myself in having participated in run-up's, and avoided the crashes in dotcom and subprime...but although I avoided the covid crash, I only semi-participated in its run-up--which was totally wrong, in hindsight. Instead, I should have made sure to have captured the entire run-up, and just rode out the crash. Why? Because my confidence wasn't great coming out of covid, and I stayed out, and therefore missed out on a big part of it, as far as overall markets are concerned, instead having picked individual investments which is always tricky.
Yes I got lucky/good, but IMO it would have been smarter to have stayed invested--indeed, to have increased exposure during the dip.
I'm not the only one who thinks this way, and it is why people load up when there is even a good 10% dip--which is something I might also do, and not worry about precisely how low it might go. The next one may very well be both shallower and shorter.
We are not at steady-state, but may very well be working toward it. Look at shorts, look at some hedgies. They're folding up the tent and going home. Soon the entire system will be both automatic, and automated. There will be nothing to do other than spoofing, scamming, pumping and dumping, redditing, and other carnival sorts of behaviors, creating a sort of midway within the larger financial fair, for the amusement of a few.
