Down goes the Dow

Social distancing, by the way, decreases the exponential growth rate, while quarantining will effect a change from exponential to linear to nothing.

Ghost of Igloi wrote:

The loss of equity value was entirely predictable

Yeah sure, only it was maser and not you who predicted it

Ghost of Igloi wrote:

The history of bubbles would have given investors a road map. As in the past largely ignored. This episode fueled by unhinged debt accumulation, stock buybacks, and the belief that central banks could moderate the economic cycle. Now the great rebalancing has begun, with consequences that will last for years,

It's completely dishonest to call what's happening a "bursting of a bubble," at least in the traditional sense. Businesses could be shut down for up to 2 months and the supply chains are already disrupted enough. Whatever equity market you wish existed with these magically fair values (determined of course by you, the Ultimate Arbiter of Fair Value) would get crushed by this as well. The US economy is not designed to be shut down for 2 months.

For all we know this "corporate debt bubble" that supposedly existed could have quietly resolved itself with a run of the mill market correction. As I previously mentioned, people were already taking notice of the froth when companies like WeWork failed to even IPO, and when companies like Uber and Lyft showed up dead on arrival.

If anything, this was a globalization bubble that's getting kicked in the teeth on top of a consumer debt bubble where people have been overleveraging themselves for decades. This is more like an existential crisis than a bubble bursting, and I strongly suspect that in a few months you and all the other bears will go home devasted that once again, like in 2009, the "great rebalancing" failed to materialize because the Fed and whoever else and whatever else. Then you'll spend the next decade talking about how valuations have been decoupled from reality and whatever the flavor of the week is (like the dreaded non-GAAP reporting).

jvffgh wrote:

Ghost of Igloi wrote:

The loss of equity value was entirely predictable

Yeah sure, only it was maser and not you who predicted it

Wow. GOI has been warning of this for years and you clowns have been ridiculing him

Now it happens and you tell this lie?

What kind of person are you?

Igloi warned of nothing. He didn’t say how or when, and no details = whining. Maser not only said how (pandemic) , he said exactly when, in late January. Because of that I sold my micro-IRA at the same time. Because Igloi never gave details I never listened to him. Years or decades of whining are a warning only that the person whining doesn’t know what they’re talking about.

Giles Corey wrote:

jvffgh wrote:

Yeah sure, only it was maser and not you who predicted it

Wow. GOI has been warning of this for years and you clowns have been ridiculing him

Now it happens and you tell this lie?

What kind of person are you?

The problem is GOI has been predicting a crash for years and years. That's like predicting snow in June and then saying, "SEE! SEE! I TOLD YOU I WAS RIGHT!" when it finally does snow in December. A crash was bound to happen eventually. That's the nature of the market. Even with the market at current levels, GOI has missed out on massive gains.

I mean no disrespect to him or anyone else on here, but I've been following this thread for about two years now, and he comes across as a fringe looney whose thinking is uninfluenced in absolute terms by literally any amount of evidence, facts, or reason. I honestly don't know why people engage with him since he's pretty much the epitome of the NPC concept (automaton who repeats the same script over and over and over with no ability to incorporate new script).

The market is tanking because of coronavirus. Can't say I saw a single mention of such a thing causing the next economic downturn anywhere in this thread going back multiple years. No one predicted this, and those who sort of predicted the *idea* of a pandemic-induced crash had no idea *when* it would happen. Even now no one knows what the hell things will look like even a month from now.

old math professor wrote:

Hussman has some pretty good math kung fu. His forward projection looks pretty linear to me.

I’ve been asking Igy to explain some of Hussman’s math for quite awhile now. He has been unable to do so. No wonder as it is voodoo math.

Math man wrote:

old math professor wrote:

Hussman has some pretty good math kung fu. His forward projection looks pretty linear to me.

I’ve been asking Igy to explain some of Hussman’s math for quite awhile now. He has been unable to do so. No wonder as it is voodoo math.

I don’t need to explain anything. It is a similar metric to Buffett and Schiller. Hussman is very open to questions on Twitter, but you don’t have the balls to embarrass yourself.

No, I have said the timing would not matter. I first posted on valuations five years ago, and in that time the stock market has produced bond like returns. During that period you and others have spent countless hours shifting money around for what? You have been wrong, and what is worse, you will never learn the lesson. That is why your portfolio will likely continue to leak principal.

In this case it isn’t about overvaluation.

It’s about the fact that all of the markets are tied together.

If you have major segments like travel and entertainment go to zero revenue, it brings everything else down.

It has nothing to do with how they were valued before this.

Futures hit limit down in five minutes.

X-Runner wrote:

In this case it isn’t about overvaluation.

It’s about the fact that all of the markets are tied together.

If you have major segments like travel and entertainment go to zero revenue, it brings everything else down.

It has nothing to do with how they were valued before this.

You are ill informed and need to learn more about the subject before you post.

My educated guess is that overvaluation didn't cause this crash, but overvaluation certainly has something to do with the acceleration.

old math professor wrote:

My educated guess is that overvaluation didn't cause this crash, but overvaluation certainly has something to do with the acceleration.

That would run counter to every valuation metric other than Forward EPS and the Fed Model. Funnily enough those two have the worse predictability to future returns.

old math professor wrote:

My educated guess is that overvaluation didn't cause this crash, but overvaluation certainly has something to do with the acceleration.

Actually it is opposite of your analysis. Covid 19 was the accelerator, overvaluation will take the market to fair value. That is why we have considerable work on the downside.

Ghost of Igloi wrote:

old math professor wrote:

My educated guess is that overvaluation didn't cause this crash, but overvaluation certainly has something to do with the acceleration.

Actually it is opposite of your analysis. Covid 19 was the accelerator, overvaluation will take the market to fair value. That is why we have considerable work on the downside.

Literally impossible to know at this point but what does "overvaluation" even mean? What sets proper value if not the market? Seems very much like a crank theory

Crank theory, that in part won Robert Schiller a Nobel Prize in economics. Actually what is crank theory is that valuation don’t matter.

I'm not very good at this and finished January with all cash. It was fairly obvious market was at a peak.

But remember that a GOI bear is like a stopped watch. Only right at precise moments in time.

Market down another 10% tomorrow. More if you-know-who has a presser before 4PM EST. God help us.