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Comment by KozmoNau7 | Hacker News Reader

It will happen before 2020, the question is when exactly it will hit. My money is on late 2018 or early 2019.

What to do before then? Don't have any money in US stocks. Diversify both geographically and sector-wise, cash out, be ready to invest when stocks crash through the floor, to ride the wave when they inevitably rise again. The real trick is spotting who's going to rise again and who's going to be left behind. Tech stocks are volatile by nature, invest in renewable energy and related sectors. We're going to need solar and wind power in the future, and batteries. Lots of batteries. Then, as we near battery saturation, there is going to be big money in recycling all those depleted batteries.

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> It will happen before 2020, the question is when exactly it will hit.

What will be the catalyst? Just because we haven't had a recession in awhile is not enough. Corporate profits are up, consumer spending is up, and even though everyone on here thinks the numbers are lies, wages are starting to go up.

> My money is on late 2018 or early 2019.

So you have already either shorted the market or bought put options out in 2019?

Market overvaluation and public debt are sky-high, it's an unsustainable situation, we either reign it in by controlled means (not gonna happen), or it's going to crash.

I'm not a huge investor, but I am preparing by reducing the proportion of US stocks in my portfolio.

How is market overvaluation calculated? And is public debt an absolute measure or is it relative to another indicator?

"There is nothing so disastrous as a rational investment policy in an irrational world." -- John Maynard Keynes

It will happen before 2020

Have you really put your own money on that?

We're going to need solar and wind power in the future, and batteries. Lots of batteries.

Do you really think you have some big insight here that the rest of the investment community hasn't thought about?

I'm not claiming to be an expert.

people often seem to forget that mining the stuff that makes the batteries is still a thing. That's a whole different ballgame, and however you want to look at: it's finite. Couple the fact that the raw materials often come from less-than-stable geographical regions, it might become Oil 2.0 (with similar wars fought over it).

Oh yeah, you should get into mining now, while it's still big and profitable, because that's a definite time-limited thing.

Why will it happen before 2020?

I'll admit it's my personal estimate, looking at last decade's constant up-up-up of US stocks, especially the tech sector, and (as mentioned in the article) the widening gap between the value of U.S. household assets and GDP growth.

It's unsustainable growth, and I'm afraid the crash is going to happen sooner rather than later.

Will it be as bad as in 2008? I don't know. But it's going to hurt (except if you're wealthy enough to invest heavily right after and ride the wave back up again).

I'm not an economist. But here is my arm-chair philosophizing about what is happening. To combat the economic crisis we started printing a lot of money. This had two effects: the interest on savings went way down, and the loans became very cheap. Having money = bad, having debts = good, at least for those who can carry the burden. This was done in order to incentivize investing, thus growing the economy. Obviously, that worked: property price and valuations went way up. But those are driven by the future-promise of debt repayment. The moment we stop printing the money, people will get wise and try to sell off those assets again. Because then having money is cheaper than having debt. So now there's a bit of problem: we can't keep printing money faster than the economy grows due to hyperinflation, but we can't /really/ stop doing so either because people will sell off their debts in order to cash in on cheap investments. This to me, seems problematic.

What rate do you consider hyperinflation? Are we in it now? What measure are you using? Afaik we’ve been running under 2% inflation for quite some time.

I think we're hiding the rate of inflation in overvaluation of property and stocks, because money is cheap.

Stuff we dont need have actually been decreasing in prices (tv, electronics)

Stuff we actually need like housing, healthcare (in the US), and education have been rising faster than 2%.

Assets too like stocks have risen much higher as well.

Relevant: https://www.youtube.com/watch?v=PTUY16CkS-k

You've got some causality backwards, there. Interest rates were at basement levels before QE. QE was an inflationary measure in part intended to keep rates from going even lower into the negative.

QE was a reaction and counterpressure to low rates, not the cause.

> invest in renewable energy and related sectors

Isn't the problem in investing in that that there's really no way to know which particular business will come out on top here since there really isn't any large barriers of entry?

Yes, and that's the trick (plus luck).

That's what hedging is for, you bet that for example, in the overall energy landscape, renewals are going to go up more than "legacy" energy companies, but still protect yourself from overall sector moves.

Ah, thanks for that explanation! I wasn't aware of what the hedge part meant. But now I could connect it to an idea.

If you don't follow the industry there are indexes and funds available for this stock. All you need to do is find the right ones and you'll be mostly insured from any individual company failure.

There's a lot of money in oil that will be captured by the 'free' energy of renewables. Renewables are just now becoming more cost effective than oil. Oil will be around for a long time but renewables are poised to overtake it in consumer and commercial energy. Might take a few decades but it's inevitable that a vastly more efficient energy source becomes the market leader.

Also, governments across the world are putting in place regulations to build and retrofit buildings to reduce emissions. That's not just energy, it's the actual building materials and techniques. That's a lot of government mandated money about to be put into green infrastructure. Again, this is over decades so the ramp time will seem slow to us humans but now is the time to get in IMO. However, I am an amateur investor and I've definitely been wrong before...

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