<story><title>Show HN: Is the stock market going to crash?</title><url>https://isthestockmarketgoingtocrash.com/</url></story><parent_chain><item><author>PDoyle</author><text>Wow, really interesting read.  Thanks for the link.&lt;p&gt;Only trouble is that once people find patterns like this, they have a habit of disappearing.  Hopefully this one is based on solid enough fundamental market forces that it persists after its publication.  It was published in 2013 so we won&amp;#x27;t know for sure until after 2023.</text></item><item><author>pdog</author><text>If you&amp;#x27;re looking for The Single Greatest Predictor of Future Stock Market Returns[1], here it is: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-greatest-predictor-of-future-stock-market-returns&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-gre...&lt;/a&gt;&lt;p&gt;This is a long read, but it&amp;#x27;s worth it. The metric can be calculated in FRED[2], and as a predictor of future returns, it outperforms all of the most common stock market valuation metrics, including cyclically-adjusted price-earnings (CAPE) ratio[3]. (Basically, the average investor portfolio allocation to equities versus bonds and cash is inversely correlated with future returns over the long-term. This works better than pure valuation models because it accounts for supply and demand dynamics.)&lt;p&gt;[1]: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-greatest-predictor-of-future-stock-market-returns&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-gre...&lt;/a&gt;&lt;p&gt;[2]: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;research.stlouisfed.org&amp;#x2F;fred2&amp;#x2F;graph&amp;#x2F;?g=qis&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;research.stlouisfed.org&amp;#x2F;fred2&amp;#x2F;graph&amp;#x2F;?g=qis&lt;/a&gt;&lt;p&gt;[3]: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.multpl.com&amp;#x2F;shiller-pe&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.multpl.com&amp;#x2F;shiller-pe&amp;#x2F;&lt;/a&gt;</text></item></parent_chain><comment><author>babaganoosh89</author><text>I actually made an automatically updating chart for this using FRED data: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;financial-charts.effingapp.com&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;financial-charts.effingapp.com&lt;/a&gt;&lt;p&gt;TLDR: The correlation did go down a bit since publishing but still seems alright.</text></comment>
<story><title>Show HN: Is the stock market going to crash?</title><url>https://isthestockmarketgoingtocrash.com/</url></story><parent_chain><item><author>PDoyle</author><text>Wow, really interesting read.  Thanks for the link.&lt;p&gt;Only trouble is that once people find patterns like this, they have a habit of disappearing.  Hopefully this one is based on solid enough fundamental market forces that it persists after its publication.  It was published in 2013 so we won&amp;#x27;t know for sure until after 2023.</text></item><item><author>pdog</author><text>If you&amp;#x27;re looking for The Single Greatest Predictor of Future Stock Market Returns[1], here it is: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-greatest-predictor-of-future-stock-market-returns&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-gre...&lt;/a&gt;&lt;p&gt;This is a long read, but it&amp;#x27;s worth it. The metric can be calculated in FRED[2], and as a predictor of future returns, it outperforms all of the most common stock market valuation metrics, including cyclically-adjusted price-earnings (CAPE) ratio[3]. (Basically, the average investor portfolio allocation to equities versus bonds and cash is inversely correlated with future returns over the long-term. This works better than pure valuation models because it accounts for supply and demand dynamics.)&lt;p&gt;[1]: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-greatest-predictor-of-future-stock-market-returns&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.philosophicaleconomics.com&amp;#x2F;2013&amp;#x2F;12&amp;#x2F;the-single-gre...&lt;/a&gt;&lt;p&gt;[2]: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;research.stlouisfed.org&amp;#x2F;fred2&amp;#x2F;graph&amp;#x2F;?g=qis&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;research.stlouisfed.org&amp;#x2F;fred2&amp;#x2F;graph&amp;#x2F;?g=qis&lt;/a&gt;&lt;p&gt;[3]: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.multpl.com&amp;#x2F;shiller-pe&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.multpl.com&amp;#x2F;shiller-pe&amp;#x2F;&lt;/a&gt;</text></item></parent_chain><comment><author>seanmcdirmid</author><text>&amp;gt; Only trouble is that once people find patterns like this, they have a habit of disappearing.&lt;p&gt;It took me a few seconds to figure out that you meant the patterns and not the people as the targets for disappearing.</text></comment>