Jim Rogers: The worst crash of our lifetime is coming
businessinsider.com
businessinsider.com
2012: Jim Rogers: It’s Going To Get Really “Bad After The Next Election”
2013: Jim Rogers Warns: “You Better Run for the Hills!”
2014: JIM ROGERS – Sell Everything & Run For Your Lives
2015: Jim Rogers: “We’re Overdue” for a Stock Market Crash
2016: $68 TRILLION “BIBLICAL CRASH” Dead Ahead? Jim Rogers Issues a DIRE WARNING
2017: THE BOTTOM LINE: Legendary investor Jim Rogers expects the worst crash in our lifetime
https://www.fool.com.au/2017/06/14/why-you-should-totally-ig...
P(economy(t+1) > economy(t)) ~ 1
∫economy(t) dt | 0..t + E[economy(t+1)] < 0
absence of evidence (not proven correct yet) < evidence of absence (if/whenever the hypothesis is observed).
This just shows that for 6 years he was not yet right, not that he's a 'broken clock', implying he isn't adapting to evidence (, which, I don't know and may be true -- but I can't say either way).
He can't claim anything beyond what's been observed, but neither can we claim the prediction (or any) not being yet observed as suggesting it'll never happen, regardless of how clickbait-y it can be packaged and whatever the intentions are behind that decision..
OK, can you show me a model that is better? What I'm saying is not dependent on the arbitrariness of subjective "baked-in assumptions", nor that each market observer has a subjective perspective and is not omniscient, nor is it about whether or not you may have the gut feeling that he's trying to scam you into unnecessary doomsday preparation. In stats terms: not about how each of us have different perspectives so KL-divergence > 0.
What I am saying is: all of the people who say "because these past positions never definitely happened yet, we should be more skeptical of his predictions than everyone else saying things will be just fine" are getting it wrong. You should be extremely skeptical of everyone asking you to withhold skepticism as if past observations (samples) prove the distribution is a stationary ergodic process (truly observing the generator).
When someone has predicted things successfully in the past, it means they answered a falsifiable question before it - so there is a burden of proof before you can call them a good predictor. But a prediction that has never been falsified does not demand a burden of proof, you can't say it's incorrect or correct at all - no matter the duration, the question "are his positions wrong?" is meaningless.
I am not privileging his opinion that much, tbh - imo, someone saying "catastrophes in the future will be worse" is a nearly-zero surprisal/maximum entropy statement. What influence could I exert over the outcomes that I depend on of processes far beyond what I can control? None. "just the way she goes, boys."
All I can do is say memento mori, insure myself against catastrophe (when the cost is negligible, so the waste is low if the catastrophe never came), and not dull my senses.. meaning that it is preferable to ignore salesmen reaffirming one another saying "but we've never sold this much before!" over to ignore someone without special insight who you suspect is only fomenting fear irrespective of if they stand to benefit, deceitfully or not, from that fear.
"We can infer Jim Rogers is unlikely to be correct about the future of catastrophes because the last 6 years of recorded performance did not contain a catastrophic event" != "somebody who had said everything is fine 6 years in a row would have been more correct than Jim Rogers over the last 6 years THEREFORE his predictions are less likely to be right", which ignores the point that ).
I'm not totally sure this extends your analogy appropriately, but it's an entertaining thought.
- A broken clock is perfectly right twice a day
- A clock going backwards is perfectly right 4 times a day
- A normal, working clock is probably never perfectly right
> We’ve had financial problems in America — let’s use America — every four to seven years, since the beginning of the republic. Well, it’s been over eight since the last one.
Well I'm certainly convinced!
But, If you look at the CAPE graph for the last 30 years, the average seems a bit higher than normal. I wonder if we're heading for a new normal where the CAPE averages higher due long term changes in allocation of capital, and long term reduced productivity gains.
all the technical analysis says the next 10 years won't be pretty but that doesn't mean it's going to be a steep drop, we could just be going sideways for a long time.
the robots aren't taking over then?
> Rogers: It could be an American pension plan that goes broke, and many of them are broke, as you know. It could be some country we’re not watching. It could be all sorts of things. It could be war — unlikely to be war, but it’s going to be something.
and
> Rogers: It’s going to be the worst in your lifetime.
Most of my little 'nest egg' is in Total Market Index ETFs (ex: SPY, QQQ ). Should I take action, or will that be foolish / premature optimization?
In addition to your regular portfolio distribution, Buy long expiration UVXY puts. UVXY tracks volatility futures. Higher the volatility, higher UVXY price. A put gives you the option to sell shares by a certain date. ETNs that long volatility tend to decay like crazy, buying puts makes this work in your favor so it's not so expensive to hold long. This step is optional, I just like the collecting a premium off the vicious decay while I wait for the "real opportunity".
Now at some point we'll probably encounter some kind of crisis that'll make your long expiration UVXY puts look terrible if you've got any. This is when you buy even more, short expiration UVXY puts. (Weeklies and monthlies.) When the crisis passes, your short term weeklies should be worth quite a bit of money and your long terms will have recovered as well.
You'll have to learn about cotango/backwardation to get a robust execution strategy, but my heuristic is to start building a small position when the VIX is 14, and if the vix gets to 20 start going hard on those monthlies. If "the big one" hits we could see the VIX get to 50+, so if you're guarding that maybe fewer weeklies and more monthlies. :P
If you look at the VIX historically, it has an extremely strong mean reversion. This should make some sense. The whole market is based on people trying to find a price consensus. Volatility should decrease over time as consensus is reached. Sometimes the `underlying level` will lazily drift up, but that's not what this strategy is really trying to capture. This strategy is trying to capture volatility created by NK scares and rumors of chinese trade wars.
The initial panic of all these catalysts is always (so far) relatively short lived, even if it results in an increase in the underlying volatility level moving forward.
https://www.tradingview.com/symbols/TVC-VIX/
If I were to algorithmize this strategy, it would probably be something along the lines of buying tons of puts whenever the volatility goes to 2x its 10-20 day EMA, and selling out of the position whenever it returns to within 20% of the previously established EMA limit.
I might be off on my estimated coefficients, but I bet that such a semi-optimized version of that backtests pretty well.
I struggle to imagine what would double the spot of vix and have it stay in a long term sustained backwardation.
If I ever see it happen, and sustain for 3+ months, I'm buying guns and alcohol.
Anybody got the ticker for the Internet Comments ETF?
There are varying opinions as to the relevance/worth of commodities:
https://www.wsj.com/articles/SB10001424127887323681904578643...
/s
no but really just leave it in a value index fund, hedge your bets by buying into foreign exposed funds
When you buy a put, the market maker sells a put and stays delta neutral by buying shares (or more generally, goes long the underlying asset). When everyone buys puts, everyone is making shares get bought.
The puts expire worthless and no affect was done to the market except keeping it bullish.
edit: I got that wrong, way wrong. Is there any way that hedging is having the effect of buoying the market?
When he shorts the call it means that someone else buys it. Probably another market maker, who might want to hedge as well, this time by selling the share and buying a put, etc..
What is a bubble? Here's my definition: A bubble is an asset going up because it's been going up. It works like this: Something (the stock market, say) looks good because of fundamentals: because earnings are up, or because interest rates are down, or whatever. People take note: Hey, the stock market looks good. So people buy stocks, so stocks go up. Then more people take note: Hey, the stock market's going up. So more people buy stocks, because they want to own stuff that's going up. So stocks go up more. So more people buy stocks. That's the start of a bubble.
But it doesn't get truly dangerous until people are buying stocks with borrowed money. Then a drop means that people sell in a panic, because they can't take a loss, so the price drops more, so more people sell in a panic, and so on. And the people that lose money, lost (at least in part) borrowed money, which means that it can ruin not just the borrower, but also the lender.
Now: Are stocks currently in this territory? My impression is no, not yet, but I don't know for sure. Is there a good measure of how much borrowed money is invested in the stock market?
Currently, the borrowed money is nearly free money via low interest rates. A lot of games are being played to juice out every cent that can be made on being able to get cheap money. When the value of assets used to play these games are ignored vs. the diminishing profit. It becomes musical chairs.
I doubt we get your everyday Joe betting on margin like the dotcom bubble, but we have the same effect, just different users.
Owait it seems like everyone who has the option wants to convert it into rents in "western liberal democracies". Sure, I guess...
The whole reason software is a hot area of investment is that it's support requirements don't scale that way, which means is good for the capitalist from a cost perspective, but bad for the wage-labor dependent class.
And, mire directly to the point, doesn't require additional labor inputs. (If extraction is automated by software tools driving hardware, even things that demand raw materials can have this feature.)
not really ragging on the developers, but its not a cheap or risk free process. and if you aren't actively investing in maintenance it will die. the costs are all just per-type not so much per-instance
This is too often true, subject to the following observations:
- Project failure is almost always a management failure (no citations needed, really), because:
- The thing to be built is poorly conceived and explained by the leadership/stakeholders, who are seldom the devs
- The delivery schedule is wildly optimistic or infeasible, because unrealistic promises were made to customers or investors
- The operational parameters of the system (peak users, load, transactions, data size, availability, etc) are overestimated by the leadership by a couple of orders of magnitude and pushback tends to be career-limiting
- When the leadership eventually realizes the failure of its vision, it "pivots", and keeps pivoting at the speed of a turbine, "reframing" the so-called vision.
- The "costly, entitled" developers often come from some body shop which pays them $25/hour and charges $75 (illustrative values only)
- Costly, unentitled, competent developers probably ran for the hills or were rejected because they weren't "with the program" - they said something realistic in the interview.
- The process is not cheap or easy or risk free, yet many companies hire and pay as if it is.
- The mere act of getting cohesive requirements out of people is one of the hardest parts of software, and one of the largest reasons for failure.
- The rest isn't easy, either, unless it's a conceptual copy of some vanilla CRUD system that does nothing novel or "web scale" (whatever that is).
OTOH, I read some devs stating that software development is just bolting legos together, what's the problem?
If you are referring to these devs, I see your point, but they and their ilk are the creations of corporates and startups who pushed the view that devs are commodity items - resources - who aren't really skilled and can be churned out of bootcamps and will be good enough to meet the deadlines.
Now I am not criticizing bootcamps or the people who make it through them. There are many smart people who have no formal CS background who could make good devs, given time and experience. There are even more people who should not be allowed near a computer, sadly, who IMO are more commonly encountered.
I am criticizing the social forces that put money above useful education, profit above knowledge, ideology above science and engineering, the short term against the entire future.
Kind of a cynical view. Investors can change the future, so the idea that they are passive players is disappointing.
In fact, if they are on the sidelines, what purpose do they serve?