Do you think Dow 18,000 was the bottom?

[morriss003]

Yes

 

[RetireAge50]

I think so. Even if the next few quarters income streams are replaced with zeros the net present value of the stock market should not have changed (as much as it did).

 

[racy]

"Do you think Dow 18,000 was the bottom?"

Who cares.

 

[maestro]

Nope, I think we'll see 1870 on S&P, and DJ at best 15,300 on next leg down. The long term damage that is being done to keep the economy closed will be 'a learning lesson' for the government officials that demanded it. Sad time for the USA, but I am still VERY happy to be retired.

 

[jcgc50]

Hopefully it would not come to it but if it is, I will keep my shot gun loaded and close by. I am looking with horror on what happens in New York and other states. How come that we are not ready and looking for lungs ventilators in China and Russia? Did not our scientists warned for years that it is a matter of time when deadly pandemic will strike?

They've been warning us for a few decades. There was a plan that was ignored not that that would have stopped it but it should have helped.

 

[PatrickA5]

A big part of the economy that would be possible to reopen sooner is the white collar cubicle dweller community. Many of these guys are in 8x8 cubicles or actual offices. Social distancing by sitting in every third chair in a conference room, closing every other urinal, etc. is doable.

And perhaps companies will reverse the open floor plan nonsense.

Reopening financial companies, publishers, engineering companies, engineering departments of manufacturers, and other residents of generic office buildings would help a lot. They might operate a little less efficiently, but that's much better than not operating at all.

Depends on the underlying economics of the industry. My old industry (Energy) is getting a double whammy of oil glut and virus. DW took a pay cut for the first time in 30 years and will most likely be let go when her energy company goes bankrupt.

Airlines, hotels, etc, etc. will have a hard time restarting for quite a while, I think.

 

[Toocold]

Out of curiosity, if we go back to highs, will the people who thought it was going to go lower than 18000 remain out of the market or continue waiting?

 

[GravitySucks]

I think I will be able to confidently tell you about a week after it happens!

Only a week.
I would be interested in subscribing to your newsletter.

 

[OldShooter]

Out of curiosity, if we go back to highs, will the people who thought it was going to go lower than 18000 remain out of the market or continue waiting?

The ones who successfully time the market will be posting about their success and, at least deep in their hearts, will believe that they are geniuses. The people who are not successful will probably not be heard from.

 

[RunningBum]

Out of curiosity, if we go back to highs, will the people who thought it was going to go lower than 18000 remain out of the market or continue waiting?

That would be my fear, that I'd be stuck out of the market while it kept recovering. My sense is that it should be hit harder than it has been, but I'm not good at predicting the market so I just stay invested at around my AA goal. I may have lost a chance to sell off and get back in lower, but I'm not greedy, so I'll ride it down and hopefully ride it back up. I've got plenty of cash to get me through it. Others of you can do what you see fit.

 

[neihn]

...I just stay invested at around my AA goal...

May I ask what is your AA? Mine was 50/50 in Feb, now is down to 45/55 .

 

[Canoeboy]

My crystal ball Is still intact and it says the bottom will be at 14,973

 

[RunningBum]

May I ask what is your AA? Mine was 50/50 in Feb, now is down to 45/55 .

I was 62% equities (120-age) but decided to go 60% by the end of last year. I think I'm within 1% of that. Looks to be about 12% cash. Sometimes I just record current balances without doing the full stock/bond/cash split.

 

[donheff]

Out of curiosity, if we go back to highs, will the people who thought it was going to go lower than 18000 remain out of the market or continue waiting?

the vast majority of us pessimists never got out because we aren’t market timers other than a little guess work about when to rebalance. I’m at 65/35. If the current bounce continues on up I will just have to rebalance towards bonds sooner than I expect. If my pessimism is correct I may rebalance the other way a couple of more times.

 

[OldShooter]

the vast majority of us pessimists never got out because we aren’t market timers ...

Well, I don't go to casinos either, but I would not call myself a pessimist because of that. "Realist" comes to mind. ...

 

[Out of Steam]

I backed off from 45% stock to 20-25% when the market bounced back up in the past week. While it locks in a 20+% loss, we were failing the "sleep at night" test.

 

[oscar1]

I sleep well at night because I have not looked at my balances! In it for the long haul. ��

 

[Asabino]

I think we’ve bounced from the bottom. Having said that, next week will be the big week. Suppose to be the time to determine if we have flattened the curve for C19. I got lucky and sold at the first two big drops. I was up and didn’t want to get greedy. Sold all.

Around 19k, I started buying At 40 percent now and will buy a chunk at the next couple of drops. I think we’re passed the “rough” patch.

 

[Markola]

I sleep well at night because I have not looked at my balances! In it for the long haul.

Here’s to reading breathless posts while not lifting one pinky.

 

[DrRoy]

Some estimate of the future effects of the virus are priced in. How accurate those estimates are will determine the direction of the market.

+1

 

[Dtail]

Always interesting to hear that the market is forward looking and has the negative news priced in.
Where was Mr. Market in early Feb 2020 in terms of pricing in the upcoming virus situation in America?
I just don't believe the market has the true effects priced in on the upcoming economic effects of the virus, vs. more concentrating on the virus itself.
Hopefully I am wrong.

 

[Toocold]

Where was Mr. Market in early Feb 2020 in terms of pricing in the upcoming virus situation in America?

Highsight being perfectly 20/20, I don't think people thought it would travel outside China and/or would have such a devastating impact on the economy and at such speed. The initial drop came late Feb when people in Italy and WA started getting this virus. Reflecting SARS or MERS, the market adjusted slightly.

I don't think anybody could have guessed at that time that there would be such a lockdown throughout the world. IMHO, ultimately that was the black swan -- not the disease but the actions taken by the government to shut down all non-essential businesses.

That's why I dont think we're going to retest the lows because I think the market has already priced in huge unemployment, significant drop in GDP, between 100-200k deaths. The three factors that could retest lows are: 1) no treatment / vaccine, 2) hyperinflation, 3) related to #1, mutation of the virus with a higher death rate. Everything else is generally within the perimeters of the volatility to date.

 

[razztazz]

If it's priced in massive unemployment and system-wide large scale reduction in business operation the market should be going downer and downer. Those things don't make markets go up.


This notion of pricing-in is as ephemeral and variable as a feather in the wind. There's always a by-the-way and a Yeah, but... in there to make it seem plausible.

 

[Dtail]

Okay so let's take this situation with forward thinking concept.
The market returns to 3300 S&P in a few months.
Now let's compare the 3300 market in mid Feb with a 3300 June market let's say.
If the market is truly forward looking, can anyone say that the forward looking 6 month concept in June (Dec 2020) is expected to have all the economic damage corrected and go back to the Feb levels to justify the same price as what was back in Feb?

ETA -what we are basically saying is that it doesn't matter how much bad news there is, as long as the bad news was expected.

 

[Toocold]

This notion of pricing-in is as ephemeral

If that is the case, how do you account for the large drop in the stock market when the retrospective unemployment rate was still 3.4% and the number of deaths was still under 100 in mid march?

The market returns to 3300 S&P in a few months.

I think 3300 in a few months is a stretch. I dont think anybody thinks society will get back to where we were anytime soon. I think the majority think we will slowly return to normal over the next year or 18 months. If however a vaccine is approved and had the scale to give everybody in the world the vaccine in a month or two, this could happen.