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Genuinely curious what you think crash means. 2021 definitely inflated our stock market way too much but we're definitely within reasonable corrected zone IMO. What should we expect as a crash? Even with the Great recession, we're looking at a 27% drawdown so we're about halfway there?

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It's not over till people start giving up and cashing out. Right now, the retail investors are still frantically buying the dip. It's just the smart money that is getting out while the getting is good.

Look: right now the S&P500 and the Dow are still twice where they were in 2016, and the Nasdaq is almost 3 times. Even after the recent drop. Do we have double the population we did in 2016? Double the resources? Double the technology? If not then why is the stock market twice as high?

My guess is, (and it's only a guess): the nasdaq will bottom out around 5000, the S&P somewhere around 2000. The Dow in the neighborhood of 15k. That's assuming there are no financial collapses like in 2008.

But it will take years to get there.

> Do we have double the population we did in 2016? Double the resources? Double the technology? If not then why is the stock market twice as high?

One easy answer is that the "value" of a dollar is half what it recently was. And that seems to hold fairly true whether you want to use that dollar to buy groceries, a house, a hotel room or a share of a company.

If I measure my investments not in dollars but in say, days of vacation (so hotel, food, gas/airfare, tickets to things, etc) then my S&P500 investment is about where it was in 2016.

Going in the other direction, we’re 11% above the pre-COVID high for the S&P. And that’s with $6+ trillion dollars having been pumped into the economy. There’s plenty of crash and plenty of inflation left in the pipes.

Would you consider it a crash if S&P was just flat for a decade?

You are misunderstanding "flat for a decade". Flat for a decade is decided in retrospect. It's not flat along the way. Flat for a decade very likely means way down from here right now.

That would be stagflation, I believe. https://en.wikipedia.org/wiki/Stagflation

Wouldn't inflation push nominal stock prices up, since there are excess "cheap" dollars to spend?

In the previous crash, even viable companies that were growing and made sense were brought close to crisis.

Currently Nikola motors is worth a few billion. In a crash they'd be dead.

Your attitude isn't unique, I'd describe it as "It's not a crash until the people/companies I consider fraudulent get destroyed." I hear it about some crypto investors in particular. There's a lot of people who basically consider recessions cosmic justice and want a cleansing fire to reign down on certain entities/people they despise. I propose: that's not what a recession/crash is.

I would assume in a real crash, especially if we're comparing it to the 2000s tech crash, someone must get destroyed. I personally think companies that can't even make a car drive for a demo, something most at home diy ev hobby builders can do, and also lie about it, probably would go first in a crash.

You propose that's not what a crash is. What is it then? And when can we say it's as severe as the early 2000s crash?

I just think of a crash as a sudden drop in asset values, we've seen that so far. A recession I think of as negative GDP growth for a couple quarters at least (i know i know but this is a reasonable definition and you know it) which we've also seen so far. So this is a crash/recession. It doesn't mean it will necessarily wipe out X. I don't know why it has to be as severe as Dotcom or Housing crashes. Doesn't seem to be a requirement to me. It has been incredibly severe for unprofitable tech companies looking for VC funding to keep them going indefinitely at least.

"It's not a crash until the people/companies I consider viable and fundamentally sound get destroyed."

That just means the market is illogical though, does not mean a crash must mean all of sudden all investors are logical? As quoted by the famous Keynes, “The market can remain irrational longer than you can remain solvent.” It’s like meme stocks like AMC/APE and GME. Does any of it make sense to me? Nope. Are people making and losing a ton of money? Sure. Is it a good indication of US economy health or dare I say, US stock market health? Really hard to say.

I guess I would say that a crash is when the market shifts to being illogical towards the negative side, where even seemingly good companies are struggling.

I wouldn't call it a crash if there is positive irrationality.

Nobody will want to even mention metaverse if there is a crash

Well I'll go on record predicting the opposite. Meta is an advertising behemoth and has taken a very big bet on metaverse, they can ensure unlimited good press for their baby, especially if their real customers aren't buying as many ads as before.

I can see it now: "Life sucks because of the crash? Move to the Metaverse!"

You are a terrible predictor of futures

Nikola is 50% down from pre-covid IPO, and -93% from Covid peak.. Even a bad business has assets, and could make some money selling something or getting acquired for basic competencies.

> Even with the Great recession, we're looking at a 27% drawdown so we're about halfway there?

Dotcom crash the Nasdaq dropped 78%. No one really knows what'll happen now though.

>you have no idea what's coming

Taken literally, it is true :) None of us know what is going to happen.

Personally, I think it won't be the crash that will hurt more, but the time it will take for recovery. Anyone who has invested money in something, gets impatient with no growth for a long time following a crash that resulted in a loss for them.

i’m seeing 2007 -> 2009 44% drawdown+

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