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by bofadeez 209 days ago
Eugene Fama believes it's impossible to detect a bubble. Why do you think he's wrong?
3 comments

Why do you think Jeffery Gundlach is wrong when he just said literally everything is overvalued? Everyone knew it was a bubble in 2001 and in 1929, that's part of being a bubble, it doesn't make sense but it just keeps going up ignoring all risks. Is there liquidity for a little more yeah maybe, but when everyone is long and highly leveraged there is only one way for things eventually to go.
That person is not even an academic. At least google Eugene Fama so you don't embarrass yourself like this.

What does Ja Rule think about bubbles? Ask him why markets can remain irrational longer than you can remain solvent.

I do know who he is, why do you assume I don't, just so you think you can appear smart on the internet? Pretty pathetic. Gundalach has better investing success than you and Fama, you should listen to what he says instead of just assume he's wrong, that's called being intellectually dishonest.
Yeah I guess you fundamentally misunderstand the difference/significance between someone who is seeking objective peer-reviewed truth and someone who tries to seduce investors to put money into their fund for fees on the internet with wild theories and anecdotal gambling success. It's not your fault, you must be a teenager or something.
Why are you so angry buddy, are you way overinvested in tech or something? What are you even trying to argue, that it's impossible to value the market?
Yeah markets are disconnected from fundamentals. Conduct causal inference with any fundamental metric on forward returns and you'll see they have almost zero predictive ability. That supports the efficient market hypothesis, as do many many other observations.

If you could simply "value the market" in some analytical way, then any simple neural network would (universally) approximate it. Instead you see the vast vast majority of machine learning quant funds fail. Here are the specific details as to why: https://www.youtube.com/watch?v=BRUlSm4gdQ4

Why do you think he is right? Lots of people detected previous bubbles. The problem is that the same people also missed or called out bubbles that never happened.
Eugene Fama also believes the value of a Bitcoin will be zero (as do I). So he is implicitly calling Bitcoin a bubble.

He does this because he understands how money works and how Bitcoin works.

Yes but his point is it's impossible to detect in realtime. Timing.
You can detect that you're in a bubble, but there's no way to know how long it will keep going before it bursts.
Well yes, we're in a permanent bubble with fractional reserve banking and central planning. Mises institute spends a lot of resources explaining how that works to the public, etc. That's not helpful insight though in terms of taking informed action e.g. as an investor.