Do you think Dow 18,000 was the bottom?

brewer12345 said:
If any of the ugliness ever got priced in, you might have a point. But it hasn't been. Ah well. Good luck.
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I agree too. Perhaps in the past it was more often.
From another standpoint, are the expected economics of the USA by Dec 2020 better than the actual economics (in hindsight but that shouldn't matter to Mr. Market) were in June 2019?
 
brewer12345 said:
Because a small sample study on a drug with nasty potential side effects that aren't uncommon showed some promising results. So what?
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What are you talking about?

The reopening plan was released to the press, and then to the public.
 
Dtail said:
I agree too. Perhaps in the past it was more often.
From another standpoint, are the expected economics of the USA by Dec 2020 better than the actual economics (in hindsight but that shouldn't matter to Mr. Market) were in June 2019?
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I thought valuations were extended at s and p 3300 even without a pandemic and severe recession.
 
brewer12345 said:
I thought valuations were extended at s and p 3300 even without a pandemic and severe recession.
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Agree again.
So just using the last 2 bear market (2000,2008) scenarios where there were 2 bear market rallies and 3 downward movements before the general upward forward movement, are we going to say that "This time is different"?
 
Dtail said:
Agree again.
So just using the last 2 bear market (2000,2008) scenarios where there were 2 bear market rallies and 3 downward movements before the general upward forward movement, are we going to say that "This time is different"?
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I am in capital conservation mode, so I am not going to say that. I also have the luxury of having been short on the way down. If this time really is different and I buy back in at 330 I just go back to where I was except 20 percent wealthier. I am guessing I will be offered significantly cheaper prices this summer.
 
vipertom1970 said:
future is up over 700+ last 45 minutes.
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This market is a “perfect orgy of speculation”. It looks like the perfect time for a "day trader". Reminds me of the Y2K era. The stock market is not the economy and the FED knows we have serious problems (unless you view them as political) so I'm sitting back and waiting until things settle down. Too old to take a lot of risk and it looks risky to me.
 
Beststash said:
This market is a “perfect orgy of speculation”. It looks like the perfect time for a "day trader". Reminds me of the Y2K era. The stock market is not the economy and the FED knows we have serious problems (unless you view them as political) so I'm sitting back and waiting until things settle down. Too old to take a lot of risk and it looks risky to me.
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What I see in the real economy is very much at odds with what the market is doing. It perplexes me.
 
brewer12345 said:
What I see in the real economy is very much at odds with what the market is doing. It perplexes me.
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And you ain't the only one. I was perplexed the market went so high in January.
And now with all the bad news, I don't understand what investors see that I don't.
 
+1 It looks to me like the economy is in the ***tter and corporate profits will be absymal but the market doesn't seem to give a care. The artificiality of a combination of Fed intervention propping up the market with easy money and traders doing their trading thing seeming to ignore long-term fundamentals make me concerned we are seeing a bubble grow right before our eyes. When will it go "pop"?
 
pb4uski said:
+1 It looks to me like the economy is in the ***tter and corporate profits will be absymal but the market doesn't seem to give a care. The artificiality of a combination of Fed intervention propping up the market with easy money and traders doing their trading thing seeming to ignore long-term fundamentals make me concerned we are seeing a bubble grow right before our eyes. When will it go "pop"?
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Well I guess I would understand your view if you think the economy and profits were permanently in the ***tter. Otherwise, if this is temporary, not much has changed. A few quarters of zeros in the IRR calculation doesn’t change the valuation much. I’m kinda surprised how quickly you jumped ship, I thought of you as our fearless captain.
 
Market can look past bad news but what is going on now is a bubble in about 6 stocks that carry a significant weight of the overall market. The stocks are Apple, Microsoft, Amazon, Google, and Facebook. The market cap of these stocks are significantly higher than entire industry sectors. What doesn't make sense is that with so many businesses fighting for survival, the last thing they will be spending money on is advertising on Google and Facebook. I really don't think people are looking to upgrade to the latest iPhone given that many of their customers are people who live paycheck to paycheck and their iPhone is their sole status symbol. I'm selling a lot of my bonds into this rally to raise cash for the next sell-off.

I'm not too impressed with the three step plan to re-open the economy. Many people will continue to stay at home until the virus is contained and dinner out with your wife doesn't involve drinking your liquid dinner with a straw through your mask. My brother is a doctor (Radiology and Nuclear Medicine) Most of his work these days involve COVID-19 patients that are admitted to the hospital. He told me that MRIs and CT scans of many COVID-19 patients that survive show damage to the lungs, heart, and lesions in the brain. So we prefer to avoid getting infected.
 
Nobody knows nuthin'. Rembering this will allow you to become completely relaxed.
 
I don't get it either but over at bogleheads I recall they have a saying that the market is forward looking. It's looking at things 6 mos out and acting accordingly, not based on the current day situation. So I guess, in this case in 6 mos the market sees we'll be back to normal-ish. I dunno, maybe.
 
If the market price movement on any day is based on price discovery.....Who is buying at these prices? A few people closing short positions perhaps, but other than that who:confused:?
Even if people think this is overblown, I can’t imagine any sane person thinks at this weeks levels US stocks are cheap (the whole market not specific issues)?


Thoughts:confused:
 
BeachOrCity said:
If the market price movement on any day is based on price discovery.....Who is buying at these prices? A few people closing short positions perhaps, but other than that who:confused:?
Even if people think this is overblown, I can’t imagine any sane person thinks at this weeks levels US stocks are cheap (the whole market not specific issues)?


Thoughts:confused:
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Over the last couple of weeks we have moved cash into some US and non-US ETFs. We will likely continue. And we are sane.

You suggest above that the relevant consideration is whether “US stocks are cheap.” That is one consideration, for sure, but isn’t the sole one, at least for us. Here are some of the factors we consider when investing:

1. Is one a day trader/market timer, or long-term investor?
2. What is one’s AA?
3. What is one’s age?
4. What is one’s investment horizon?
5. Under any reasonable scenario would one envision cashing out of equities over certain future benchmarks (5, 10 years, e.g.)?
6. Does one take a negative or positive view of what society/life will be like in 2025, 2030, 2040, 2050?
7. Does the equity holding pay dividends?
8. Does one actually care if the market drops another, say 20% today (see above)?
9. Does one have any debt?
10. Does one LBYM?
11. Does one want to leave behind an inheritance to children or charity?
12. Are stocks off their recent highs?
13. Does one believe the market will be higher or lower in 2030 than it is today?
14. Does one watch Mad Money daily or instead not really care what some talking head on TV says?
15. Does one not really watch that much TV at all?

And on and on.

So there are lots of reasons why sane people could justify investing today. But YMMV. And I could actually be crazy, I suppose. But I don’t think I am.
 
What I see in the real economy is very much at odds with what the market is doing. It perplexes me.
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Now with all the bad news, I don't understand what investors see that I don't.
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I get it, but the market is not responding to what is happening now, or even for the first half of the year. It is responding to trillions from the Fed, which is real money, and what they see for the second half, which currently looks like the slow recovery will have started. That is better than the worst fears from March, so the market is up from there.
 
Hindsight being 20-20, was the stock market justified for tanking 35% about 1 1/2 months ago when the virus was starting to spread and people were beginning to understand the economic ramifications from it? I think it did.

Using the same logic, we'll see in a couple of months whether the stock market is justified that there will be some economic recovery due to all the measures taken. It is what it is. If you think that there won't be economic recovery, you should short the market. If you think there will be even greater economic recovery, you should go long. Or you can not play the game.

Trying to tie today's situation with a forward looking financial instrument is foolhardy.
 
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Toocold said:
Hindsight being 20-20, was the stock market justified for tanking 35% about 1 1/2 months ago when the virus was starting to spread and people were beginning to understand the economic ramifications from it? I think it did.

Using the same logic, we'll see in a couple of months whether the stock market is justified that there will be some economic recovery due to all the measures taken. It is what it is. If you think that there won't be economic recovery, you should short the market. If you think there will be even greater economic recovery, you should go long. Or you can not play the game.

Trying to tie today's situation with a forward looking financial instrument is foolhardy.
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This is really the whole deal. Down 35% in a very short period of time. Now back up....what 25%....in a very short period of time. If you think the economy won't take a huge hit over a long period time and we bounce out of this, that makes sense. If, like me, you believe that the market is overly optimistic about the amount of damage that has occurred and will continue to unfold in the coming months, it makes no sense at all.

Today we're up on what seems to me to be nothing short of plan that should be called "A 3 phase step to herd immunity". Because without adequate testing and governors/mayors truly adhering to the new "guidelines" (many won't), it's possible that we're going to have another surge this summer. Likely in states where the leaders and residents think this virus only affects old people and wusses.

Also up on a "leaked" t-con between doctors about Remdisivir, which overnight is a miracle cure. We've been hearing about this drug since February when it was used in China for compassionate purposes. Same in Europe. The Chicago hospital said their study is 125 patients, 113 critically ill, and lost only two patients.

But on April 10th the New England Journal of medicine reported on the compassionate use of Remdesivir in Europe, Canada and the US. And their synopsis was this: "CONCLUSIONS
In this cohort of patients hospitalized for severe Covid-19 who were treated with compassionate-use remdesivir, clinical improvement was observed in 36 of 53 patients (68%). Measurement of efficacy will require ongoing randomized, placebo-controlled trials of remdesivir therapy. (Funded by Gilead Sciences.)"

Those are very different snapshots of the efficacy of the drug.

This isn't a "top down" event like the Great Recession. This is going to be a "bottom up" Great Recession. I'm watching things on the news that I've never seen before. Lines of cars that go as far as the eye can see, not just for testing, but for food banks. Crowds of desperate people grasping for paper forms to apply for unemployment because the state's website keeps crashing. And NYC, a complete ghost town, for at least one more month. Many of those businesses will not make it. And everyone I am talking with has no plans to travel, attend concerts or any events with large numbers of people, or eat in restaurants for the foreseeable future. The Feds can put out "guidelines" til the cows come home. I don't trust their guidelines.

Until we get more earnings and data, we aren't even remotely out of the woods.
 
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