Costco was nuts, just turned around. Albertsons slightly less crazy. I just bought the usual, People buying like in a month.
Costco was nuts, just turned around. Albertsons slightly less crazy. I just bought the usual, People buying like in a month.
all this said, we are in recession and we will be in recession for some time ahead. How that affects the stock market...no one knows. We;ve never had a pandemic-inspired recession. It might not affect stocks at all because they will look over the earnings valley. I'm not predicting that, but several times in this bull market we've had serious profit recessions...but stocks were smart enough to overlook them.
One of the biggest mistakes people make is to think the market is a thermometer of today's economic activity. it isn't.
I'm not disagreeing. No one has a crystal ball. There's also a risk of a very long recession too beyond 6 months. You convinced me. I'll nibble a little into these declines.
sitting in cash wrote:
I'm not disagreeing. No one has a crystal ball. There's also a risk of a very long recession too beyond 6 months. You convinced me. I'll nibble a little into these declines.
which is funny because I may be selling.
Recessions are normally small percentage drops in economic growth. This global shutdown could result in one of the largest falls in economic activity in recent history.
Stock markets can be expected to be at their lowest at the height of this panic/epidemic. The epidemic peak is likely to be some weeks or months away.
Igy,
a more interesting comparison might be to look at similar sharp dives (which are absent in the two bear market comparisons in your linked chart).
Alfie wrote:
Recessions are normally small percentage drops in economic growth. This global shutdown could result in one of the largest falls in economic activity in recent history.
Stock markets can be expected to be at their lowest at the height of this panic/epidemic. The epidemic peak is likely to be some weeks or months away.
yeah but if the stock market thinks that the economic drop will be brief, then it will bid back up the price of stocks.
I can remember talkign about this with igy - good parallel.
A few years ago the price of oil crashed. From 120 to 40 or something like that. Earnigns at oil companies went negative bigtime. The oil earnings drop brought down the entire SP500 earnings to where they were shrinking.
Igy thought the market would drop along with the SP500 earnings.
but the market did not drop with the SP500 earnigns, because the market could see that the drop was temporary. As it was.
If the virus fades in Europe and America as fast as it faded in China, SK and Japan, then this will be a brief problem.
Big IF.
agip wrote:
Alfie wrote:
Recessions are normally small percentage drops in economic growth. This global shutdown could result in one of the largest falls in economic activity in recent history.
Stock markets can be expected to be at their lowest at the height of this panic/epidemic. The epidemic peak is likely to be some weeks or months away.
yeah but if the stock market thinks that the economic drop will be brief, then it will bid back up the price of stocks.
I can remember talkign about this with igy - good parallel.
A few years ago the price of oil crashed. From 120 to 40 or something like that. Earnigns at oil companies went negative bigtime. The oil earnings drop brought down the entire SP500 earnings to where they were shrinking.
Igy thought the market would drop along with the SP500 earnings.
but the market did not drop with the SP500 earnigns, because the market could see that the drop was temporary. As it was.
If the virus fades in Europe and America as fast as it faded in China, SK and Japan, then this will be a brief problem.
Big IF.
That's basuically what i was saying five days ago, and I quote: "Of course one might expect this, but i do believe it must be tempered with the extremely high probability that speculative forces are already largely in play that foresee this likelihood. The markets are forward looking, and perhaps this is factored in. And once a hint that the selling pressure is subsiding, perhaps very large short positions will be covered and we will see a bounce.
Look at China. And if you don't, i can only expect that the big players have. Their economy is rebounding from the effects of the pandemic. US and other countries are far behind in our progression of the economic cycle, but it might offer insight into its reach and duration. One might reasonably expect this calculation is going on. The evolving news that more cases were found in more states is kind of like, 'well duh!'
Granted, this is all just conjecture, be that as it may.'
The current price of the markets is based on the collective knowledge of what market participants presently perceive the foreseeable future to be like. So a lot of the gloom and doom and recession likelihood are factored in.
I think yesterday the markets reacted quite favorably to the stimulus package. That could be a turning point in that it marks a new level of commitment in battling what we now understand to be a vastly changed economic landscape.
seattle prattle wrote:
I think yesterday the markets reacted quite favorably to the stimulus package. That could be a turning point in that it marks a new level of commitment in battling what we now understand to be a vastly changed economic landscape.
No chance.
A phony few hour bounce-back in response to some blah, blah, blah .
Back in the tank soon enuff
seattle prattle wrote:
agip wrote:
yeah but if the stock market thinks that the economic drop will be brief, then it will bid back up the price of stocks.
I can remember talkign about this with igy - good parallel.
A few years ago the price of oil crashed. From 120 to 40 or something like that. Earnigns at oil companies went negative bigtime. The oil earnings drop brought down the entire SP500 earnings to where they were shrinking.
Igy thought the market would drop along with the SP500 earnings.
but the market did not drop with the SP500 earnigns, because the market could see that the drop was temporary. As it was.
If the virus fades in Europe and America as fast as it faded in China, SK and Japan, then this will be a brief problem.
Big IF.
That's basuically what i was saying five days ago, and I quote: "Of course one might expect this, but i do believe it must be tempered with the extremely high probability that speculative forces are already largely in play that foresee this likelihood. The markets are forward looking, and perhaps this is factored in. And once a hint that the selling pressure is subsiding, perhaps very large short positions will be covered and we will see a bounce.
Look at China. And if you don't, i can only expect that the big players have. Their economy is rebounding from the effects of the pandemic. US and other countries are far behind in our progression of the economic cycle, but it might offer insight into its reach and duration. One might reasonably expect this calculation is going on. The evolving news that more cases were found in more states is kind of like, 'well duh!'
Granted, this is all just conjecture, be that as it may.'
The current price of the markets is based on the collective knowledge of what market participants presently perceive the foreseeable future to be like. So a lot of the gloom and doom and recession likelihood are factored in.
I think yesterday the markets reacted quite favorably to the stimulus package. That could be a turning point in that it marks a new level of commitment in battling what we now understand to be a vastly changed economic landscape.
The market did drop in 2015 fairly dramatically (twice 12-15%), along with earnings. However, if one recalls the Shanghai Accord provided stimulus to push valuations higher, halting the contraction. Remember the market was about 2,100 when I first posted on DGTD 3/4/2015 and was 2,080 11/4/2016. The Trump election, de-regulation, Republican Tax cuts, and continued Central Bank intervention all pushed valuations to record levels on a broad basket of assets. On a variety of measures, the market highs of last month were extreme. This remains an extremely overvalued market where a moderate portfolio of 60% stocks, 30% bonds, and 10% T-Bills is likely to return nothing over the next ten years. Covid-19 exposed the fragility of the post Financial Crisis period. One where Central Banks attempted to generate inflation and thus growth through cheap and plentiful credit/liquidity. The growth never came, and the inflation went to assets, all of them. Quite frankly this foolishness, is a pandemic with greater ramifications. We will have snap backs, but over the next 12-18 months valuations will settle in around 1,100 S&P 500 (plus or minus 10-15%).
“Stock Market is Not Forward Looking
A widespread myth persists that the stock market is a leading indicator of recessions, providing a year or more warning on average before one starts.
Actually, the stock market is a coincident indicator of sentiment towards stocks, no more no less.
The stock market sees ahead myth stems from Wall Street pimps who want you in the market 100% of the time or they don't make money.”
—Mike Shedlock
Agip yes, I am out, have been nearly out for years, back in only to get blow-off top, for less than a year. Not losing what you have is IMO a bigger motivation than gaining what you do not yet have. It can happen almost overnight, when your head is taken out of your azz by someone or something.
Idiot yes, those few giant moves—essentially all obvious but not instantaneous—are how you can beat, easily. This one has been slow-motion to me. Of course I was not knvolved in 1987.
Agip, no, you cannot be sure that corona is dead in CHN. My boots on the ground say it is not easily stamped-out.
Igy no, this time IS different, in many important respects, all of which you failed to acknowledge in a timely manner. Obviously all systems are the same in the face of existential threats, such as I enumerated, but the point is to know the system, and which threats are existential. You knew only some facts of the existing system, yet have assiduously ignored or avoided others, to preserve and nurture your worldview. I have been flexible and adapted, to my benefit.
“The markets” are controlled by a few whales, like it or not. They are part of a larger, interconnected, whale-controlled system. We are just remoras, along for the ride. I don’t like it, but I acknowledge it and work within it. I had glimpses into that world, nothing short of armageddon or world war will stop it. Over time demographic and religious shifts, along with land burnout, will shape its evolution. Anything can happen, but when the wave function collapses and all of the abstract quantities and proxies that we use are translated to reality, something has to give: dollar to zero, war, widespread poverty, famine, welfare bust, whatever it is, something has to give. There is no free lunch. There is a price for everything.
Still out, need to play this carefully.
agip wrote:
It remains weird to me that people can look at the nations which have had the virus...china, south korea, japan...and they're fine now.
China had one huge advantage: the ability to crack down on media hype.
The Shanghai composite fell barely 13% the whole way through, and then it steadily gained nearly all of it back in just one month. It declined since then, probably because of the west.
Bad Wigins wrote:
agip wrote:
It remains weird to me that people can look at the nations which have had the virus...china, south korea, japan...and they're fine now.
China had one huge advantage: the ability to crack down on media hype.
The Shanghai composite fell barely 13% the whole way through, and then it steadily gained nearly all of it back in just one month. It declined since then, probably because of the west.
It's painful to listen to stuff like this. China had big advantages that were much more important than controlling media.
Can you please get informed?
Maserati,
You have failed to acknowledge that no one controls the system. All your rich insiders will lose the most money. Valuations do matter. We will go to 1,100 as I predicted years ago. Enjoy the ride. You will want to buy then. Tell your buds too.
Igy
seattle prattle wrote:
Bad Wigins wrote:
China had one huge advantage: the ability to crack down on media hype.
The Shanghai composite fell barely 13% the whole way through, and then it steadily gained nearly all of it back in just one month. It declined since then, probably because of the west.
It's painful to listen to stuff like this. China had big advantages that were much more important than controlling media.
Can you please get informed?
Or what, you'll report me?
Stop referring to your precious emotions, how about. So sorry about your pain! Try to find something you enjoy and focus on that.
Iggy,
Moving forward, in the short term (2-3 mo), cash, short term bonds or medium term bonds (non-corporate)?
