I’ve heard this sentiment call hundreds of tech bubbles since the dotcom boom, and we’ve seen only one in an unrelated sector. I am not saying it isn’t a bubble, just that market enthusiasm tends to look like a bubble but happens all the time without crashing everything.

This is the correct take on it. That kind of analysis has predicted eighteen of the last three bubbles.

The problem is that while, say, stocks are frothy, eventually inflation catches up to the froth - so even when the crash happens, you end up better off than if you sat the frothy market out on the sidelines.

It doesn't help to be right in the direction of the market, when you're wrong in the timing of it.

Agreed. As much as I wished I had sold some positions last February when it was clear something big was building in Asia, I am confident that I wouldn't have had the guts to buy back in after the crash and would have missed out on the rebound gains.

In the end, I'm probably better off having held and continuing to buy every couple of weeks throughout than trying to time the market swings from COVID.

> As much as I wished I had sold some positions last February when it was clear something big was building in Asia

I did this.

> I am confident that I wouldn't have had the guts to buy back in after the crash and would have missed out on the rebound gains.

I did this too.

> In the end, I'm probably better off having held and continuing to buy every couple of weeks throughout than trying to time the market swings from COVID.

I wish I'd done this.

Would you mind sharing some of your experience? I'm super interested.

What's possibly different with this alleged bubble is the influx of retail into the market and day trading in general. The wallstreetbets sub has grown at least 3x during this episode, and I know personally of several people who were previously uninterested in stocks now looking to trade.

Sure, but then the argument for it being a bubble is “it is different this time.” It could be, I don’t know! But plenty of interest in retail investing has not resulted in a bust before.

Exactly, the market is definitely overenthusiastic which we can call a bubble. So we keep on hearing all those claiming it is a bubble in the sense that it will imminently "pop" because people will always want to say "I predicted the bubble will pop". So they will wake up every few months (when the market peaks yet again) and shout "bubble, bubble" so that just in case it happens now they can be the foresighted ones.

The amount of times we've heard "bubble" over past few years, even while/if true, in of itself keeps people from taking it seriously.

While I do think the low global interest rates, national debts, general housing prizes, and, real valuable estate being hogged by hedge funds makes things significantly different from the 2000, I don’t think middle class stock options have. Sure you have fewer options because of the things I mention, meaning the only place to keep minor wealth is in stock, but the danger isn’t different.

Diversify and put most of your money into boring industries like water and energy companies that aren’t stuck on a single type of fuel, and you’ll be alright.

People who shoot for the moon are playing the lottery and most of them are going to lose. It’s always been like that, and I don’t think that’s different now.

I’m much more worried about the inequality we’ve created. I’m a boring investor, and the worst stock I have from 2000 is Vestas, and it’s up around 900% since then. This isn’t take me to the moon money like the gamblers who get it right earn, but it’s 900% more than all the people who live pay check to pay check.

If you're going to pattern match, you're almost always wrong calling any specific moment a bubble.

The S&P 50 has closed within 5% of its all-time high 32% of days for its entirety. 1 out of every 15 days the market closes at an all time high. And the vast, vast majority of those don't end up being the precipice of a crash. In fact, even the ones that do predate a crash almost always end up being perfectly fine times to invest for long-term growth.

The null hypothesis really should be that most markets aren't bubbles. So, a "why is this time it different" argument should be required from people calling it a bubble, not from those saying it's not.

People have also been steadfastly insisting the market will crash again for… well, actually, I don’t think it’s even stopped briefly since the recession.

During the recession we were told that the days of 10%+ YoY returns in the market were over and that we could expect to live in a world with 3%–5% from here on out. The market meanwhile has gone up fivefold in the interceding 12 years, or roughly a 15% annual return.

All along the way have been the doomsayers insisting that the market will crash, that it feels like 2000 all over again, that Trump, or COVID, or Biden will destroy the stock market, that being at all-time-highs, having an unprecedented CAPE ratio, or quantitative easing is going to send things tumbling… and yet here we are. Sure, the crash will come at some point, but given the thousands of failed predictions I’ve seen in the past twenty years I have zero faith in anyone’s individual ability to correctly guess when it will happen.

2012-2019 offered great returns, but it didn't have the same breathless mood as prevails now.

Taxi drivers want to talk about stocks. Every graph is looking parabolic. Day trading has boomed. Last time these things happened was 1999-2000.

Okay, do what's your play, here? You sit 2021 out, the s&p froths up to 5.5k over the next 18 months, and then crashes down to 3.7k? And you perfectly time buying the dip? (Unlikely.)

You'll still lose money, compared to just buying and holding.

You can split up your buying and skimming profits over time so your building a position over many months to years and periodically taking profits near the tops and rebuying and increasing position every couple weeks when the market corrects.

Also another great thing to try is get SPX/USD on 500:1 leverage so on a good day when S&P goes up 2% with the leverage multiplier can significantly increase return.

Owning stocks is a good idea. But if you just buy the S&P every month, you probably don't need a "terminal stock watcher and stock position tracker", which is the program being discussed here. It seems like a symptom of a short-term exuberance that may not end well for most participants.

Indeed. https://www.businessinsider.com/forgetful-investors-performe...

"This time it's different!" is also the rallying cry for people trying to time the peak ;-)

So the important questions then are 1) is it actually different? and 2) if it is different, is it different in a way that prevents or mitigates a bubble? I could see things like COVID and Fed interventionalism changing the dynamics such that a bubble is harder or less damaging when it pops. I could also see the opposite. I just don't know, and I was entering my freshman year of HS in 2000 so I don't really remember what it was like to be working and invested in the market at that point.

So many people fail to see this. The number of stock market "investors" making Tik Tok videos and people gambling with rent money might even be worse than 2000.

People are bored and trapped at home. It isn't that surprising that day trading as a hobby has picked up a little.

A market correction wouldn't be that surprising in general, but keep in mind a bubble and a correction aren't the same thing. Plus, and maybe more importantly, even know a correction could occur without knowing when isn't actually actionable information (could be tomorrow, next year, or three years from now, and you would lose money if you react at the wrong time).

So people saying we're in a bubble/correction is due, what action would you have people take? If the answer is "nothing" or "I don't know" then what good is that?

>what action would you have people take

People can obviously do whatever they want as long as they're aware past performance...blah...blah...don't invest more than you can lose...blah.

I've pulled out from everything with a rich P/E ratio and am only keeping money in companies that I feel are a) stable and b) have a reasonable-to-low P/E ratio.

My thought is that new investors tend to go for well-known companies or meme stocks, but either way driving up the P/E ratio. I don't want to be caught in the downswing when these investors leave.

The difference here is understanding that investing and gambling are not the same thing. If they are investing for retirement and buying low cost index funds, I would do nothing. If they are gambling due to the dank memes, I would ensure that I wasn't gambling anything I couldn't afford to lose.

I don't know in early 2000 but this time everybody's calling it by its name, a bubble.

-> Then again, "this time it's different!" is the rallying cry at the peak of every bubble.

It is different!

Trillions of dollars magically printed by the Fed. Bitcoin, Doge Coin, Robinhood, Covid, GameStop, Trump, insurrection...

Fiat currency always ends the same, it's the duration of the fiat currency that I believe is the variable.