Ghost of Igloi wrote:. The last three weeks are more about the fragility of that system than Covid-19.
I agree with this. I think CV-19 was the catalyst but not the root cause. Financial markets fluctuate all the time, occasionally very violently, like now. I can still hear people saying “this time it’s different...” :-)
sitting in cash wrote:
Technically, we need to re-test the December 2018 lows. We didn't get there yesterday or today. Nice try, but came up short. Will it hold or break thru.
How can we not re-test? The global economy in a rolling shut-down. Stocks valuations will be reset lower as earning shrink, recession is apparent, with consumer and investment confidence evaporating. Governments, businesses, consumers, and investors all counted on false assumptions. Falling economic growth was masked by a financial shell game. Covid-18 was just the pin.
the idiot wrote:
Ghost of Igloi wrote:. The last three weeks are more about the fragility of that system than Covid-19.
I agree with this. I think CV-19 was the catalyst but not the root cause. Financial markets fluctuate all the time, occasionally very violently, like now. I can still hear people saying “this time it’s different...” :-)
idiot,
I don’t think it is different,. People always trust in narratives that have little basis in anything that resembles market history. There is a playbook. That would have argued for caution years ago. We already wiped out two plus years of returns, with more to follow. Of course no one can predict that point, but you can make some reasonable calculations. For example, GAAP EPS currently at $135 shrinks to $100, multiply by historical average multiple of 16 gets you to 1,600. None of that is unreasonable. What is unreasonably is the phony $175 Forward EPS that Wall Street uses. Designed to make markets appear cheap. A shameful process really.
Igy
The market goes up. The market goes down. Repeat.
All Apple store in the world are closing, China excepted.
Because Apple just panics every time a few people die, agip?
agip wrote:
Ghost of Igloi wrote:
But China is not fine. People aren't working at full strength or spending as in the past. Auto sales are down 80%. The psyche has clearly changed. How long to recovery? Certainly not V-shaped.
i was speaking narrowly about the virus. the virus is as good as dead in china.
Wouldn't trust anything coming out of China. Also South Korea's markets are at like, what, 2013 levels right now? Not exactly "fine" in my opinion. Japan is a whole different story too.
But I do think people are underestimating The United States' ability to handle this, but pessimism is more fun than optimism I suppose.
the idiot wrote:
Ghost of Igloi wrote:. The last three weeks are more about the fragility of that system than Covid-19.
I agree with this. I think CV-19 was the catalyst but not the root cause. Financial markets fluctuate all the time, occasionally very violently, like now. I can still hear people saying “this time it’s different...” :-)
Yeah financial markets in the US have a history of 10% swings in a day. Happens all the time really.
The history, at bad times that mostly got worse:
https://twitter.com/biancoresearch/status/1238573702725369858/photo/1
Racket wrote:Yeah financial markets in the US have a history of 10% swings in a day. Happens all the time really.
As you should well know, the markets have experienced +/- 10% or greater swings. They are very rare, but their occurrence dominates the overall trend of the markets. If you remove the top ten largest daily % decreases since 1950, the index value would be about twice its current value. Similarly, if you could go back in time and delete the ten biggest daily % gains, the market would be about half its current value. Roughly 10 of ~ 17,000 daily changes account for fully HALF of the market's current position.
Ghost of Igloi wrote:
sitting in cash wrote:
Technically, we need to re-test the December 2018 lows. We didn't get there yesterday or today. Nice try, but came up short. Will it hold or break thru.
How can we not re-test? The global economy in a rolling shut-down. Stocks valuations will be reset lower as earning shrink, recession is apparent, with consumer and investment confidence evaporating. Governments, businesses, consumers, and investors all counted on false assumptions. Falling economic growth was masked by a financial shell game. Covid-18 was just the pin.
I agree. How can we not re-test indeed.
How could anyone buy at 270 SPY? 270 is assuming everything roars back after 2 weeks? Actually 270 SPY is more like everything is already roaring back. Staying strong in cash.
As far as your Russia portfolio, Ghost, I understand the strong fundamentals there (balanced budget, foreign reserves).
Same old song, though, regarding having only a few commodities to export; excessive dependence on one leader (obviously a problem here currently as well). No high-tech sector.
My local St Patrick’s Day 5k was cancelled this morning. I received an email from the YMCA I go to five days a week, they have a suspected yet unconfirmed Covid-19 case. I am headed to Costco shortly trying to beat the crowds, a normal Saturday activity. I will leave if there is a line of crazed hoarders. Any way you cut it interesting times. Stay healthy DGTD.
Get a grip Jesse. Go for a long run, you’ll feel better.
Ghost of Igloi wrote:
My local St Patrick’s Day 5k was cancelled this morning. I received an email from the YMCA I go to five days a week, they have a suspected yet unconfirmed Covid-19 case. I am headed to Costco shortly trying to beat the crowds, a normal Saturday activity. I will leave if there is a line of crazed hoarders. Any way you cut it interesting times. Stay healthy DGTD.
This made me chuckle. I don’t think you’ll be beating the crowds. Costco has been a better draw than a MA GA rally lately. Good luck though.
I’m working. Violent, disabled people need assistance Saturdays, too. World’s quietest job when the world is hectic.
the problem with sitting out is that it gets progressively harder to buy back in when you should.
At the bottom of 2009 bears said 'don't buy don't do it - it's a headfake! The world economy is completely sick and propped up by central banks! And they thought they were being smart.
Then the market was up 20% in 3 weeks and 60% in 9 months and many people sat in cash for years, losing massive returns.
This drop was around 27% at its worst.
or 34% for small caps.
That's a big break
True.
What if the shutdowns are extended? Everything thinks this is over March 31. Everything closed until March 31. Apple closed until the 27th. Is that enough? Japan still not back to normal and they closed schools for a month, not just 2 weeks. This 2 weeks and it is over mentality seems way too optimistic. Hope it's true though.
sitting in cash wrote:
True.
What if the shutdowns are extended? Everything thinks this is over March 31. Everything closed until March 31. Apple closed until the 27th. Is that enough? Japan still not back to normal and they closed schools for a month, not just 2 weeks. This 2 weeks and it is over mentality seems way too optimistic. Hope it's true though.
the thing is...the stock market looks into the future better than you can.
Things were awful in March 2009 but somehow it predicted, correctly, that things were healing up. And here we are, 11 years later hugely higher.
Just as at some point after today the market will look forward 6 months and see the virus over and world economies revving up again. You don't have a similar ability to look ahead, is the problem.