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The stock market is a colicky baby......
Old 06-27-2020, 08:20 PM   #1
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The stock market is a colicky baby......

When the stimulus teet runs dry it starts to cry.

And it was crying time again on Friday.

I may have an overly simple view born of a lack of understanding. To me, it seems if more stimulus is not forthcoming, there will be a whole lotta correcting going on. And the market will get really spooked if even that possibility emerges.
Is more QE a forgone conclusion? We all know it canít go on forever, but that itís gonna go on some more for now seems to be priced in.
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Old 06-28-2020, 08:33 AM   #2
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Here is my simplistic view, think of the economy as a balloon with a small hole bleeding air (corona effect) but someone (government) is at the nozzle pumping air back in (stimulus) achieving some sort of an equilibrium. Once the stimulus stops, the economy will revert/deflate back to its true natural value, it simply has to. Not saying the US government won't keep trying to shore up the economy but sooner or later the true effect/pain of the pandemic has to be felt.
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Old 06-28-2020, 08:52 AM   #3
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Quote:
Originally Posted by frayne View Post
Here is my simplistic view, think of the economy as a balloon with a small hole bleeding air (corona effect) but someone (government) is at the nozzle pumping air back in (stimulus) achieving some sort of an equilibrium. Once the stimulus stops, the economy will revert/deflate back to its true natural value, it simply has to. Not saying the US government won't keep trying to shore up the economy but sooner or later the true effect/pain of the pandemic has to be felt.
Agree.
Possibly one more big stimulus coming which will be the last prop up, possibly to SP500 all time highs. Then the balloon deflates.
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Old 06-28-2020, 06:20 PM   #4
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I am always 100% long and the recent run up felt good but made no sense. A crash will make sense but not feel good. Moral of the story is I can't win. lol
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Old 06-30-2020, 04:01 PM   #5
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My simple opinion/explanation for some of the market swings.

Too many people who donít understand how to invest are invested via their 401k etc retirement funds. Funds, in turn, invest in stocks. People get skittish and sell their funds, then the funds have to sell stocks.

Sadly not enough people take the time to learn about investing.
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