How Technology Changed The Way How Market Crash/Recover

[Singuy]

So Harry Dent has been predicting that we are in the biggest bubble of all time and eventually it will pop, having a market crash so bad that it will take decades to recover. For those who want to see his argument, please watch the video provided.

Everyone knows I am a perma bull because interest rate is so low. However after listening to Harry Dent's argument, I've noticed that the doomsday predictors are really just analyzing by analogy. They refer back in time to the great depression, the 70s, or the dot com bubble.

Now I'm not saying there wouldn't be a market crash, however I disagree with the recovery time and the extend of the crash. My prediction is that market crashes will be smaller in magnitude going forward with faster recovery time. The Pandemic crash of 2020+recovery time was no fluke. I believe it will be reproducible going forward. The reason for this are of the following.

1. Passive investing has became so popular over time that trillions of dollars worth of float of any stock are locked away for safe keeping in these index funds. This alone prevents whatever Harry said, "tech stocks will crash 90%"..pffft right
2. The speed at which information travel is at lightning speed today vs 100 years ago. People are more informed and most times have more knowledge about a company than the "professionals". So generally people are less likely to trust these professionals for advice.
3. The bull run from the financial crisis + the bull run of the post covid crash had many people who "bought the dip" made out greatly. Large dips will be rare going forward as people follows the "buy the dip, any dip" mantra going forward.
4. Easier trading platforms make buying this dip super easy vs 20-100 years ago.

Time has changed thanks to technology. These analysis by analogy, trying to compare today to decades ago is missing lots of new information that will change the outcome greatly which in my opinion should reduce the magnitude of market crashes while expediting recovery time.

[disneysteve]

I think you make solid points, and we all know how successful you’ve been in the market.

Its always a little concerning when people say ‘this time is different’ but there are times when it really is different. The market today is not the same as it was 20 or 30 or 50 years ago. Just the fact that I can buy and sell stock at any time at no cost with just a few clicks on the supercomputer I carry in my pocket is transformational.

[LivingAlmostLarge]

So Harry Dent has been predicting that we are in the biggest bubble of all time and eventually it will pop, having a market crash so bad that it will take decades to recover. For those who want to see his argument, please watch the video provided.

Everyone knows I am a perma bull because interest rate is so low. However after listening to Harry Dent's argument, I've noticed that the doomsday predictors are really just analyzing by analogy. They refer back in time to the great depression, the 70s, or the dot com bubble.

Now I'm not saying there wouldn't be a market crash, however I disagree with the recovery time and the extend of the crash. My prediction is that market crashes will be smaller in magnitude going forward with faster recovery time. The Pandemic crash of 2020+recovery time was no fluke. I believe it will be reproducible going forward. The reason for this are of the following.

1. Passive investing has became so popular over time that trillions of dollars worth of float of any stock are locked away for safe keeping in these index funds. This alone prevents whatever Harry said, "tech stocks will crash 90%"..pffft right
2. The speed at which information travel is at lightning speed today vs 100 years ago. People are more informed and most times have more knowledge about a company than the "professionals". So generally people are less likely to trust these professionals for advice.
3. The bull run from the financial crisis + the bull run of the post covid crash had many people who "bought the dip" made out greatly. Large dips will be rare going forward as people follows the "buy the dip, any dip" mantra going forward.
4. Easier trading platforms make buying this dip super easy vs 20-100 years ago.

Time has changed thanks to technology. These analysis by analogy, trying to compare today to decades ago is missing lots of new information that will change the outcome greatly which in my opinion should reduce the magnitude of market crashes while expediting recovery time.

I heard that a lot recently about passive investing. That even thinks like pension funds are moving into that. And of course most traditional deferred compensation plans offer target funds with indexes. So it's unthinking for most and where even myself dumped 100% of DH's 401k into the S and P index fund. He has 19 poor options and that was the best so we just do that. I bet there are a lot of people in the same boat.

[Singuy]

I follow MeetKevin and liked a lot of his video clips. What do you think about the Matterport one?

He loves the whole 3d camera thing. I'm just afraid that a smaller company will come out with a motorized tripod with an app for the iphone and replace the thing. We know that iphone 12 max/galaxy ultra now comes with lidar/laser so it's not hard to replace those bulky matterports.

[JBinKC]

All I can say I am partially hedged to a black swan event like this through a small position in some gold mining equities and bitcoin which should do OK until we see margin calls. Note: that some influential people like Elon Musk and others are starting to embrace bitcoin so I highly doubt it will be outlawed given the ability to cap gains tax it

My concern this reset will be a currency debasement event but I totally agree with you that the recovery time will be quick unless the central banks totally ditch MMT or embrace a feudalistic future going forward.