Global Financial Crisis
Fellow monkeys - since we are potentially on the verge of another financial crisis, I thought it might be a good time to make a video on what caused the 2008 crisis.
If you're interested in how the subprime mortgage bubble grew so big and how this caused the downfall of the global economy then check out the vid:
nice breakdown
Thx
Lol what’s the catalyst. No crisis incoming
tech-induced liquidity crisis? Inevitable downfall of the majority of crypto? Could certainly wipe out $trillions
Not to mention potential stagflation.
There's just not enough institutional money in the crypto space for a crash to send the global economy into a tailspin right now. Stagflation is my biggest concern, followed by a potential interest rate-driven housing crash.
Part 2 out now:
https://youtu.be/Op90rN5aG-k
a cognitive bias of people is to relate the last crisis to the next one (can't remember if this is anchoring or recency bias, maybe both), tread carefully by saying that this will be 2008 all over again
every crisis looks different, I'd suggest you not only study 2008, but study S&L crisis in early 80s, 1972-1974, great depression, tech bubble unwind, panics of late 19th century, etc., as the only thing that's certain is we will go through hell once again, we just don't know what it's going to look like
for my part, I'm sticking to first principles. live below means so when my income goes down (not down much now) and inflation bites, I won't have to change my lifestyle much, buy a diversified folio high quality stocks that should survive whatever comes our way (focus on low debt, cash on balance sheet, dividend ideally), keep some cash for emergencies, and ensure I keep myself healthy and active so you're less inclined to panic (a lot easier to keep your cool during market events when you're well rested, exercised, and feeling good physiologically).
Do you have a particular view on how some sectors might perform relative to others? such as Tech, Private Equity vs more traditional consumer staples, banks etc. I am inclined to be more value-oriented, but seems like nothing is getting spared in this market if inflation is not brought under control
picking sectors is like forecasting but at a micro level, theoretically should be easier, but often times just as hard as macro forecasting, so all I do with sectors is make sure I'm not too overweight one or the other and then leave the rest to my security/manager selection and let the chips fall where they fall
also, this happens in every selloff, low quality goes first, then mid quality, then highest quality at the end. in the great depression AT&T (the stalwart of the day) lost well over half its value but the issue here isn't avoiding temporary losses, the issue is survival, which is why I focus on high quality. it'll go up and down, and when it goes down I'll buy more, when I get closer to retirement/an expense I'll shift more of my funds to cash or super high quality bonds, but for now I'm content to ride the waves
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