Author Topic: Upcoming Recession  (Read 6136 times)

Metalcat

  • Senior Mustachian
  • ********
  • Posts: 17395
Re: Upcoming Recession
« Reply #50 on: December 23, 2021, 07:58:45 AM »
Have all your stuff paid for.
Cash is king.

Idk, my 2.5% mortgage feels pretty good right now.

And leaves you with more cash.

How does paying stuff off result in having less cash?? Doesn't it totally depend on the interest rate?

Ron Scott

  • Handlebar Stache
  • *****
  • Posts: 1126
Re: Upcoming Recession
« Reply #51 on: December 24, 2021, 06:30:42 AM »
Being in the heavy accumulation phase I actually wouldn't mind a recession from an investing standpoint. I was fortunate to start investing during the run-up post 2008/09 and while I know it would be painful to see decreased balances for an extended period it would be far outweighed by continued investments during the market "sale".

That was an amazing period for growth. Probably once in a lifetime for most people.

American GenX

  • Pencil Stache
  • ****
  • Posts: 948
Re: Upcoming Recession
« Reply #52 on: December 24, 2021, 09:40:35 AM »
Does anyone doubt that a recession will occur at some point along their FIRE accumulation or post FIRE path? It is as close to a certainty as anything. If it is predictable, you are also unlikely to time it *in an effective way* better than the market without insider info.
Yeah, it's already occurred more than once.  But regardless of that fact, I expect a big drop in stocks anytime.  They're highly overvalued.

Glenstache

  • Magnum Stache
  • ******
  • Posts: 3493
  • Age: 94
  • Location: Upper left corner
  • FI(lean) working on the "RE"

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 2454
Re: Upcoming Recession
« Reply #54 on: December 24, 2021, 10:54:49 AM »
Yeah, it's already occurred more than once.  But regardless of that fact, I expect a big drop in stocks anytime.  They're highly overvalued.

I expect the overvaluation will come down but not with a drop in stocks but rather an increase in earnings because of inflation.

XYZ corp that is trading at a 29PE will eventually trade at a 22PE when they increase earnings by 30% because of a few years of 8% inflation.

nereo

  • Senior Mustachian
  • ********
  • Posts: 17500
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Upcoming Recession
« Reply #55 on: December 24, 2021, 11:37:48 AM »
Yeah, it's already occurred more than once.  But regardless of that fact, I expect a big drop in stocks anytime.  They're highly overvalued.

I expect the overvaluation will come down but not with a drop in stocks but rather an increase in earnings because of inflation.

XYZ corp that is trading at a 29PE will eventually trade at a 22PE when they increase earnings by 30% because of a few years of 8% inflation.

I’m willing to make a bet that we won’t see a >2 year period where inflation exceeds 8% annualized.

Let’s check back is 2024/25 and see how this goes…

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 2454
Re: Upcoming Recession
« Reply #56 on: December 24, 2021, 11:41:40 AM »
Yeah, it's already occurred more than once.  But regardless of that fact, I expect a big drop in stocks anytime.  They're highly overvalued.

I expect the overvaluation will come down but not with a drop in stocks but rather an increase in earnings because of inflation.

XYZ corp that is trading at a 29PE will eventually trade at a 22PE when they increase earnings by 30% because of a few years of 8% inflation.

I’m willing to make a bet that we won’t see a >2 year period where inflation exceeds 8% annualized.

Let’s check back is 2024/25 and see how this goes…

I mean I would love to lose that bet...