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0 pointsWalterBright2y ago0 comments

All my investments are in stocks. People tell me "what if the stock market goes to zero?" Well, then I'd lose everything. But consider this - if the stock market goes to zero, so does the bond market, so does the real estate market, so do hog futures, your NFTs, your collector car, etc.

The only thing that goes up is ammunition.

So sure, it could happen, but I'm not going to diversify, because that won't work, either.

0 comments

ksaj2y ago

This is a good way to frame it. The stock market going to zero means everybody has stopped valuing companies, and presumably the companies themselves are not creating value anyone can buy into.

That puts us back to pre-industrial planet. Is that going to happen in this generation? I wouldn't worry too much about the stock market disappearing and taking all your money with it then.

Diversifying mainly means not putting all your wealth into one industry. It doesn't mean "Don't rely on stocks" or whatever.

If you only have one ship and it goes down, you go down with the ship. If you have a fleet, you can stay afloat. If you manage your fleet like a battalion, you just might win the battle. Ships won't suddenly cease to exist.

sgillen2y ago

People definitely use the word “diversify” to include things like real estate or gold, not just stocks in different industries.

bombcar2y ago

We can also look at some major historical disruptions that did NOT drive all stocks to zero, and then think what would have to happen worse than that.

The only way it makes sense NOT to save for retirement is if your current utilization of the money is better than all or most possible retirement outcomes (paying down very high interest debt may apply, for example).

You can also save for retirement in other balanced ways, such as saving into a "mortgage payoff" fund; if the government has collapsed to the point where land is being seized, well, hope you invested in lead.

jowdones2y ago

Nah, you're wrong. Japan's stock market dropped 90%. For 15 years straight, and never recovered above 80% of it's peak. US is only "special" until it isn't.

This didn't mean society collapsed and they started living in a Mad Max universe as people defending "stocks can't go to zero" argue.

Stocks industry is just a massive gambling machine. It can and will wipe out all your capital in completely unpredictable ways.

Buy real estate, own land, even keep money in the bank, with all inflation and shit they're much safer than in the cesspool scam that the stock market is.

ianai2y ago

You should probably not stop with the discussion of Japan at that point. They have a central bank pushing hard against the trend. Further, you’re still arguing from a limited point of view as keeping all investments in Japan wouldn’t be diversified.

dmarchand902y ago

Japan is a bit tricky to analyze because they tend to have higher dividends than US stocks. And yes even though their total returns have been bad the point is you wouldn't lose all your savings. (Though you certainly would have been better putting your money elsewhere)

chalcolithic2y ago

It's very interesting, thank you. Retrospectively what alternatives to the stock market (aside from stock markets outside the country) would be a good investment in just-before-the-crash Japan?

jowdones2y ago

Well, you never know it's gonna be a crash so there's never "just before crash".

But definitely "never keep all your eggs in one basket". At most a quarter of all your net worth in stocks and that only if you enjoy having heart palpitations and have mentally resigned to kissing good bye to that capital. Stocks is gambling, advising someone to "invest" is same as "go gamble your money in Vegas". Would you still put your hard earned money in it if you realized what a sham the stock market is?

Real estate, land, ca$h in the bank. Stay out of gambling. But of course the establishment will never give you the last part.

anonyfox2y ago

If the stock market goes to _zero_, your money won’t be a problem worth thinking about. This would probably mean anarchy and other pressing issues to deal with

j / k navigate · click thread line to collapse

0 comments

ksaj2y ago

This is a good way to frame it. The stock market going to zero means everybody has stopped valuing companies, and presumably the companies themselves are not creating value anyone can buy into.

That puts us back to pre-industrial planet. Is that going to happen in this generation? I wouldn't worry too much about the stock market disappearing and taking all your money with it then.

Diversifying mainly means not putting all your wealth into one industry. It doesn't mean "Don't rely on stocks" or whatever.

sgillen2y ago

People definitely use the word “diversify” to include things like real estate or gold, not just stocks in different industries.

bombcar2y ago

We can also look at some major historical disruptions that did NOT drive all stocks to zero, and then think what would have to happen worse than that.

jowdones2y ago

Nah, you're wrong. Japan's stock market dropped 90%. For 15 years straight, and never recovered above 80% of it's peak. US is only "special" until it isn't.

This didn't mean society collapsed and they started living in a Mad Max universe as people defending "stocks can't go to zero" argue.

Stocks industry is just a massive gambling machine. It can and will wipe out all your capital in completely unpredictable ways.

Buy real estate, own land, even keep money in the bank, with all inflation and shit they're much safer than in the cesspool scam that the stock market is.

ianai2y ago

dmarchand902y ago

chalcolithic2y ago

It's very interesting, thank you. Retrospectively what alternatives to the stock market (aside from stock markets outside the country) would be a good investment in just-before-the-crash Japan?

jowdones2y ago

Well, you never know it's gonna be a crash so there's never "just before crash".

Real estate, land, ca$h in the bank. Stay out of gambling. But of course the establishment will never give you the last part.

anonyfox2y ago

If the stock market goes to _zero_, your money won’t be a problem worth thinking about. This would probably mean anarchy and other pressing issues to deal with

j / k navigate · click thread line to collapse