[rapsey]

The bull market has been long. The crash is inevitable to be within a year or two. Of course various doomsayers have been vocal for a long time, but things eventually must come down.

When people like Ray Dalio are vocal about it there is something to it.

[kccqzy]

So? What if the market does crash? Just buy more index funds during the crash because after the crash the recovery is inevitable. If you are young (most HN commenters are), you can afford to wait for the recovery.

[paganel]

> after the crash the recovery is inevitable

It hasn't been inevitable in Japan after the early 1990s crash.

[rapsey]

I was replying on the question what is coming next year. What you are saying is completely correct as well.

[tracer4201]

What’s different this time? In other words, how do you know the crash is inevitable within a year or two?

[prewett]

- There is a well-known business cycle that goes from boom to bust in about 7 - 10 years on average.

- Unemployment is at multi-decade lows; if you look at FRED graphs the unemployment hits a low right before the recession. Of course, nobody knows how low it will go, but it can't go much lower than it is now.

- Bond yields have inverted, which has been a reliable recession-in-one-year signal.

- The trade war can't improve corporate earnings.

- Maybe the trade war triggers something bad in the US and/or Chinese economy and we have another 1997.

- Any one-time earnings juice from the tax cuts is over, so the year over year comparisons are harder.

- The markets flipped out in Dec after the Fed raised rates (I think that's what it was) and dropped 20% in a week or two. The Fed made some conciliatory statements and the party was back on. The RMB appreciates by only a few percent, but over some psychological threshold of 7 RMB to 1 USD and the market flips out, dropping 3%. It feels to me like everyone is trying to pretend that the party is just getting started, but if you keep drinking, sooner or later you pass out. It's been 10 years, it's getting pretty late, people have to stop and go home sooner or later. Sooner or later something random is going to happen like in Dec and everyone is going to flip out. But this time they'll stay passed out for a while.

[nguoi]

>unemployment hits a low right before the recession

You have your causal link the wrong way around

[WanderPanda]

I want to see your do calculus for that one

[nguoi]

Recessions make people lose their jobs

[rapsey]

There are lots of indicators of worldwide trade slowing down. In the tech world there has been a rush of IPOs, signalling that the private funds are running dry, and so on. Companies like Ray Dalios Bridgewater track these things better then anyone. When he says that their projections point to it then there is little doubt.

[ac29]

If you're so sure there will be a crash within 12-24 months, are you short in the market? Short with leverage?