In general, I think people try to time markets much more than they have skill for. Suppose you think there’s a stock bubble; the temptation is to buy, hold as it rises, and then sell at the top of the bubble before everything comes crashing down. But enough people are trying to do that that you need some special skill in order to be in the leading edge, able to sell when there’s a buyer. It’s much less risky to just sell the stocks as soon as you think there’s a bubble, which foregoes any additional gains but means you avoid the crash entirely (by taking it on voluntarily, sort of).
A similar thing happened at the start of the pandemic, where my plan was basically “look, I don’t think I’m going to be especially good at the risk assessment, I want to just lock down now instead of staying open to get the marginal few weeks of meetings or hangouts or whatever,” and various other friends said “look, I believe in math, I think it’s just paranoia to lock down immediately instead of doing so based on a cost-benefit analysis.” None of us knew it at the time, but the official tests were faulty and delayed and other testing was being suppressed, and so the numbers being used for the cost-benefit analyses were significantly underestimating the true amount of viral transmission.
Also relevant was at the start of the pandemic, there were various border closures and regional quarantines that by design had as little warning as possible. Suppose Disease City has too many cases, and also people in Disease City would want to leave if they think they’re going to get locked in (because regardless of whether or not they have the disease, it’s better for them to be out than in), and the regional / national government wants to lock them in; then the government want to impose the lockdown and then announce it, since that minimizes the number of people who can flee.
Noticeably, if there’s a revolution in some country, it’s much better for the new government to murder all of the people who would want to leave than let them leave. Contrast “Who, after all, speaks today of the annihilation of the Armenians?” with anti-Cuban politics in the US being driven by Cuban expatriates who felt wronged by the government they fled, or various potential leaders kept by other powers as potential puppets ready to be installed when the time is right. If more educated / capitalist Chinese had been allowed to leave China, and ended up in the US, it seems likely could have been a voting bloc much like the Cuban voting bloc, and impacted US-Chinese relations accordingly.
[As it happens, most of the people that I know who speak of the annihilation of the Armenians are themselves part of the Armenian diaspora. Out of the various genocides and purges I’m familiar with, people mostly seem interested in ones to people similar to them, and curiously uninterested in ones that are of their political enemies, or even of the political enemies of people they would like to be allied with.]
In summary, there’s no fire alarm for when to leave the country, in part because the situation is adversarial, and this isn’t the sort of thing you should expect people to be well-calibrated on, since they don’t have many examples to learn from.
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I think there’s also a factor where ‘the best time to plant a tree is 20 years ago, and the second best time is today.’ If you expect to want to be in Canada instead of the US in 2030, say, then you might expect to prefer the timeline where you move to Canada in 2020 and live there for ten years to the timeline where you live in the US for nine and a half years and then move to Canada the night before the civil war breaks out (or whatever), and then live there for six months. If the first, you’ll have been able to invest in lots of things that you expect to stick around; in the second, you might skip making useful home improvements because they aren’t mobile. [Similarly, imagining our Chinese intellectuals in the 1950s, if they knew they would want to move to the US in 1965, they might have decided to get the move over with as soon as possible, since then their children might have grown up speaking English, they might have been able to get positions at universities before there was a flood of similar refugees, they might have been able to liquidate Chinese assets at more favorable prices, and so on. Most of the benefit of delaying comes from the hope that actually you won’t have to move; this is why the illusory short-term positive signs are one of the most important parts of the OP.]
This story is less obvious when there’s a huge difference in value between the options. If you’re making net $60k a year in the US and would make net $30k a year in Canada, or whatever, each year you delay moving doubles your effective income. But if the difference is smaller, or you’re weighing different psychological benefits against each other, it’s probably better to get it over with than procrastinate.
Noticeably, if there’s a revolution in some country, it’s much better for the new government to murder all of the people who would want to leave than let them leave.
At Yalta conference, Stalin requested that all captured Russian soldiers be returned to Soviet Union. Especially the ones who turned and fought against Soviet Union during WW2. After hearing about the deal, many of them committed suicide rather than return. Those who were returned (both those who turned and those who did not) were sent to death camps. According to Soviet policy, all prisoners of war were automatically considered traitors. They were supposed to fight harder, duh.
Then there was no one to contradict the Soviet propaganda, and many left-wing people in the West parroted it completely uncritically. So as a part of propaganda, Russian expatriates who left before the WW2 were asked to return and help rebuild their war-ruined country, because “it’s completely different now”. Those naive enough to believe the message and actually return were also sent to death camps.
By the way, speaking about Armenians, who remembers all those ethnic groups exterminated by communists? (“Which ethnic groups?” My point exactly.) Even in the recent debate about whether Crimea was historically inhabited by Russians or Ukrainians… susprisingly, the correct answer is: neither.
Suppose you think there’s a stock bubble; the temptation is to buy, hold as it rises, and then sell at the top of the bubble before everything comes crashing down. But enough people are trying to do that that you need some special skill in order to be in the leading edge, able to sell when there’s a buyer. It’s much less risky to just sell the stocks as soon as you think there’s a bubble, which foregoes any additional gains but means you avoid the crash entirely (by taking it on voluntarily, sort of).
The correct move in this situation isn’t to get out early, but to leverage down. By keeping a balanced fraction in cash, you both accumulate the gains as the bubble inflates, and survive the inevitable crash—and it’s likely you can come out ahead on net. The appropriate ratio depends on the amount of volatility you’re expecting.
I’m not sure how to generalize this insight, but maybe there’s a similar move available? A winter home in Costa Rica, perhaps? Even if that means a smaller summer home here.
In general, I think people try to time markets much more than they have skill for. Suppose you think there’s a stock bubble; the temptation is to buy, hold as it rises, and then sell at the top of the bubble before everything comes crashing down. But enough people are trying to do that that you need some special skill in order to be in the leading edge, able to sell when there’s a buyer. It’s much less risky to just sell the stocks as soon as you think there’s a bubble, which foregoes any additional gains but means you avoid the crash entirely (by taking it on voluntarily, sort of).
A similar thing happened at the start of the pandemic, where my plan was basically “look, I don’t think I’m going to be especially good at the risk assessment, I want to just lock down now instead of staying open to get the marginal few weeks of meetings or hangouts or whatever,” and various other friends said “look, I believe in math, I think it’s just paranoia to lock down immediately instead of doing so based on a cost-benefit analysis.” None of us knew it at the time, but the official tests were faulty and delayed and other testing was being suppressed, and so the numbers being used for the cost-benefit analyses were significantly underestimating the true amount of viral transmission.
Also relevant was at the start of the pandemic, there were various border closures and regional quarantines that by design had as little warning as possible. Suppose Disease City has too many cases, and also people in Disease City would want to leave if they think they’re going to get locked in (because regardless of whether or not they have the disease, it’s better for them to be out than in), and the regional / national government wants to lock them in; then the government want to impose the lockdown and then announce it, since that minimizes the number of people who can flee.
Noticeably, if there’s a revolution in some country, it’s much better for the new government to murder all of the people who would want to leave than let them leave. Contrast “Who, after all, speaks today of the annihilation of the Armenians?” with anti-Cuban politics in the US being driven by Cuban expatriates who felt wronged by the government they fled, or various potential leaders kept by other powers as potential puppets ready to be installed when the time is right. If more educated / capitalist Chinese had been allowed to leave China, and ended up in the US, it seems likely could have been a voting bloc much like the Cuban voting bloc, and impacted US-Chinese relations accordingly.
[As it happens, most of the people that I know who speak of the annihilation of the Armenians are themselves part of the Armenian diaspora. Out of the various genocides and purges I’m familiar with, people mostly seem interested in ones to people similar to them, and curiously uninterested in ones that are of their political enemies, or even of the political enemies of people they would like to be allied with.]
In summary, there’s no fire alarm for when to leave the country, in part because the situation is adversarial, and this isn’t the sort of thing you should expect people to be well-calibrated on, since they don’t have many examples to learn from.
---
I think there’s also a factor where ‘the best time to plant a tree is 20 years ago, and the second best time is today.’ If you expect to want to be in Canada instead of the US in 2030, say, then you might expect to prefer the timeline where you move to Canada in 2020 and live there for ten years to the timeline where you live in the US for nine and a half years and then move to Canada the night before the civil war breaks out (or whatever), and then live there for six months. If the first, you’ll have been able to invest in lots of things that you expect to stick around; in the second, you might skip making useful home improvements because they aren’t mobile. [Similarly, imagining our Chinese intellectuals in the 1950s, if they knew they would want to move to the US in 1965, they might have decided to get the move over with as soon as possible, since then their children might have grown up speaking English, they might have been able to get positions at universities before there was a flood of similar refugees, they might have been able to liquidate Chinese assets at more favorable prices, and so on. Most of the benefit of delaying comes from the hope that actually you won’t have to move; this is why the illusory short-term positive signs are one of the most important parts of the OP.]
This story is less obvious when there’s a huge difference in value between the options. If you’re making net $60k a year in the US and would make net $30k a year in Canada, or whatever, each year you delay moving doubles your effective income. But if the difference is smaller, or you’re weighing different psychological benefits against each other, it’s probably better to get it over with than procrastinate.
At Yalta conference, Stalin requested that all captured Russian soldiers be returned to Soviet Union. Especially the ones who turned and fought against Soviet Union during WW2. After hearing about the deal, many of them committed suicide rather than return. Those who were returned (both those who turned and those who did not) were sent to death camps. According to Soviet policy, all prisoners of war were automatically considered traitors. They were supposed to fight harder, duh.
Then there was no one to contradict the Soviet propaganda, and many left-wing people in the West parroted it completely uncritically. So as a part of propaganda, Russian expatriates who left before the WW2 were asked to return and help rebuild their war-ruined country, because “it’s completely different now”. Those naive enough to believe the message and actually return were also sent to death camps.
By the way, speaking about Armenians, who remembers all those ethnic groups exterminated by communists? (“Which ethnic groups?” My point exactly.) Even in the recent debate about whether Crimea was historically inhabited by Russians or Ukrainians… susprisingly, the correct answer is: neither.
The correct move in this situation isn’t to get out early, but to leverage down. By keeping a balanced fraction in cash, you both accumulate the gains as the bubble inflates, and survive the inevitable crash—and it’s likely you can come out ahead on net. The appropriate ratio depends on the amount of volatility you’re expecting.
I’m not sure how to generalize this insight, but maybe there’s a similar move available? A winter home in Costa Rica, perhaps? Even if that means a smaller summer home here.
This is a really great comment, thanks. (Consider making it into a post.)