Options traders are bracing for a stock-market crash
marketwatch.com
marketwatch.com
It is hard to imagine anyone affording a a mortgage if their savings are rotting away at 5% less than inflation.
Im just shocked that some people think stock is some SV alternate reality. I grew up in a rural community before the internet, and even then, nobody I knew was long term saving for houses or retirement with a savings account.
I do agree 5 years is a while, but it's also easy to say that right now based on the last 5 years. It's not terribly difficult to find 5 year periods where returns aren't very good or flat out bad (e.g. starting investing in 2000).
Anecdotal Source: Every single person I know who has bought a house, myself included.
If you wish to counter this source please provide data supporting your claim that all home owners have stock options to liquidate.
You don't know anyone that has sold stock to pay for a down payment?
You're just patronizing everyone who isn't in Silicon Valley with a statement like this.
First, how many Americans only own stock as part of their 401(k) or IRA and can't liquidate it without affecting their retirement?
Second, how many Americans own stock portfolios with sufficient value that they could liquidate them and purchase a house for cash, as the initial response implied? I guarantee you it's less than 60%.
I'm talking about down payments, paid for by stock sale, 401k, or IRA loans.
Maybe I'm crazy and you're right, but I think most people use these vehicles to save for and fund their house purchase, not a regular savings account.
You have to pay back with interest, but the interest goes to you.
Housing prices might take a hit, but by the time they pop up on the open market, you won't be buying from a distressed seller, but rather a numbered corporation domiciled in Delaware that's picked up all those properties in cash, cheap.
Plenty of companies are out there offering quiet cash deals, they will find these properties much faster than agents with their paperwork and fees can swoop.
If you weren’t old enough or in the right neighborhoods to see it in the last bubble, there were shady companies mailing postcards to every house and plastering neighborhoods with poorer / older people with fliers. They appeared to be looking for people with medical bills, old people who needed money for assisted living, etc. who needed money right now and might be swayed by a quick transaction. I noticed how you could cross into a less affluent neighborhood and suddenly it was like every pole had a “ca$h for ugly homes” sign on it.
More money flowing away from the market into safe(r) investments than flowing in causes valuations to plummet.
The stock market has been found to behave completely randomly, even when taking into account all available information.
Yes, there was a crash at the beginning of COVID-19, and the market recovered disproportionately to the amount of pandemic-related destruction. There are also many really bad things that happened and did not cause crashes. And there are crashes that happen out of nowhere.
They say that esteemed economists have predicted 92 of the last 5 recessions.
Also, it costs much less to buy an out-of-the-money option than the value of the option. You can buy cheap insurance against catastrophe, and not unwind your main position. This leaves you protected against a crash while still able to make money on the upside.
Don't even ask the question. The answer is yes, it's priced in. Think Amazon will beat the next earnings? That's already been priced in. You work at the drive thru for Mickey D's and found out that the burgers are made of human meat? Priced in. You think insiders don't already know that? The market is an all powerful, all encompassing being that knows the very inner workings of your subconscious before you were even born. Your very existence was priced in decades ago when the market was valuing Standard Oil's expected future earnings based on population growth that would lead to your birth, what age you would get a car, how many times you would drive your car every week, how many times you take the bus/train, etc. Anything you can think of has already been priced in, even the things you aren't thinking of. You have no original thoughts. Your consciousness is just an illusion, a product of the omniscent market. Free will is a myth. The market sees all, knows all and will be there from the beginning of time until the end of the universe (the market has already priced in the heat death of the universe). So please, before you make a post on wsb asking whether AAPL has priced in earpods 11 sales or whatever, know that it has already been priced in and don't ask such a dumb fucking question again.