Calming thoughts, maybe

[MikeyMarks]

I've been reading these boards for about 15 years, but decided to register an account today just to share a few thoughts on the market.

1. I'm old enough to remember 9/11 and the Great Recession and how they both felt like the end of the world. They weren't the end of the world. And neither is this. It's funny how much calmer I am now, and it's because I've experienced the fall AND the rise several times now - it's a normal rhythm that you must embrace psychologically. It feels terrifying when you watch the market drop seven percent two or three days in a row, but just keep looking at the 100-year Dow Jones chart to reassure yourself that the market has always headed in one direction long-term: up.

2. Every expert was saying we were due for a market correction and/or a recession. So, it finally happened. Okay. You didn't think it would never happen, did you? Markets must have corrections, and economies must have recessions. But they're always temporary. And this one in particular seems so inextricably linked to an externality (the virus) that just think how positively the market will react when the US announces a major drop in cases or a company announces a vaccine.

3. These boards are helpful for information and (sometimes) reassurance, but just remember nobody in this community knows anything more about the future than you do. Don't be influenced by those who post predictions, especially dire ones, with confidence - they have no idea what they're talking about.

That's all for now. Just thought I'd share.

[Rianne]

Quote:

Originally Posted by MikeyMarks I've been reading these boards for about 15 years, but decided to register an account today just to share a few thoughts on the market. 1. I'm old enough to remember 9/11 and the Great Recession and how they both felt like the end of the world. They weren't the end of the world. And neither is this. It's funny how much calmer I am now, and it's because I've experienced the fall AND the rise several times now - it's a normal rhythm that you must embrace psychologically. It feels terrifying when you watch the market drop seven percent two or three days in a row, but just keep looking at the 100-year Dow Jones chart to reassure yourself that the market is always headed in one direction long-term: up. 2. Every expert was saying we were due for a market correction and/or a recession. So, it finally happened. Okay. You didn't think it would never happen, did you? Markets must have corrections, and economies must have recessions. But they're always temporary. And this one in particular seems so inextricably linked to an externality (the virus) that just think how positively the market will react when the US announces a major drop in cases or a company announces a vaccine. 3. These boards are helpful for information and (sometimes) reassurance, but just remember nobody in this community knows anything more about the future than you do. Don't be influenced by those who post predictions, especially dire ones, with confidence - they have no idea what they're talking about. That's all for now. Just thought I'd share.

Nice post, MikeyMarks. I think the discussion brings everyone back for more. You are logical and express common sense. I gotta say, I love the discussion. More fun than a barrel of monkeys Even when the sky is falling, this forum gets together and talks about it! Sharing every which way it could possibly go. Forum gives me food for thought.

[REWahoo]

MM, like your comments - even though you seem to contradict yourself here:

Quote:

Originally Posted by MikeyMarks ... the market is always headed in one direction long-term: up.

Quote:

Originally Posted by MikeyMarks Don't be influenced by those who post predictions... they have no idea what they're talking about.

Just kidding.

[MikeyMarks]

I just changed "is" to "has" for clarification.

[Bryan Barnfellow]

"1. I'm old enough to remember 9/11 and the Great Recession and how they both felt like the end of the world. They weren't the end of the world. And neither is this."

Erm,...are you absolutely certain in this prediction? We don't know much about this virus, do we? :-)



-BB

[Bryan Barnfellow]

My calming thought has to do with China: Observers are noticing pollution levels up again from factories and reports of production climbing.

-BB

[teejayevans]

You’re taking the fun out of this ;-)

[easysurfer]

I'm not worried. That Ramen noodle package is looking better and better .

[Midpack]

Good post Mikey. I agree with your summary. Like others here, I was invested in ‘87, ‘00, 9/11 and ‘08-09, never sold anything, and was rewarded handsomely for it. Might have missed early FI and ER later had I panicked. So I’m not worried at all, it’ll turn around in a few months if not sooner, though it will probably take a long while to reach 29,000 again. I’m willing to wait.

[teejayevans]

Quote:

Originally Posted by Bryan Barnfellow My calming thought has to do with China: Observers are noticing pollution levels up again from factories and reports of production climbing. -BB

Or that’s because they are burning the infected bodies:


Coronavirus
Large amounts of sulfur dioxide clusters in China is raising speculation of China burning piles of bodies. | Source: DALE DE LA REY / AFP

Evidence suggests that crematoriums are running 24×7 and burning thousands of infected dead bodies in a day.
Data has suggested a massive amount of sulfur dioxide is being released into the air. Sulfur concentration is especially high around Wuhan and Chongquing, the cities most affected by the Wuhan coronavirus.
The massive release could be because of the crematoriums burning dead bodies en masse on the outskirts of the cities.

[OldShooter]

This is a chart from my investment class that I have posted before, but I think it is relevant here:

The punch line is that volatility is not risk, SORR excepted. The real risk is missing out on long-term equity growth by being afraid of volatility. Note that the Y-axis is logarithmic.

[ER Eddie]

I appreciate the post, thanks Mikey. It's always safer and easier in some sense to be pessimistic, so I'm glad you're taking the opposite tack.

Personally, I take comfort in the fact that the economy was in good shape before this happened -- maybe a little overweight, but basically well-functioning. It's like getting a virus in an otherwise healthy body. We weren't an old, doddering economy going into this (e.g., filled with runaway inflation or imminent collapse of major financial institutions). So I expect us to be on the road to recovery by the end of the year.

Of course, file that under "predictions by people who don't know what they're talking about." heh

[MikeyMarks]

Quote:

Originally Posted by OldShooter This is a chart from my investment class that I have posted before, but I think it is relevant here: The punch line is that volatility is not risk, SORR excepted. The real risk is missing out on long-term equity growth by being afraid of volatility. Note that the Y-axis is logarithmic.

That chart says it all, thanks. But wait for all the "But this time it's different" comments. : )

[momoftwo]

Thanks for the calming perspective.
As a newly retired person, I really can use it

[momoftwo]

And, if it can be believed, the numbers of NEW cases of covid in China has declined in recent days.
Hopefully, we will see a similar path in the US and globally soon

[OldShooter]

Quote:

Originally Posted by MikeyMarks ... wait for all the "But this time it's different" comments. : )

Per Sir John Templeton: " 'This time is different.' are the four most expensive words in investing."

[Spock]

don't want to harsh your mellow
but BofA is suggesting Treasuries could be the next to tank
https://www.nasdaq.com/articles/u.s....ofa-2020-03-12


and the fed is pumping $ into the repo market at a record rate daily

[OldShooter]

Quote:

Originally Posted by Spock don't want to harsh your mellow but BofA is suggesting Treasuries could be the next to tank https://www.nasdaq.com/articles/u.s....ofa-2020-03-12 and the fed is pumping $ into the repo market at a record rate daily

That article repeats the common mistake of using the word "investor" when the words "speculator" or "trader" are much more correct.

Buffett: “The stock market is a device for transferring money from the impatient to the patient.”

Bogle: "Don't just do something. Stand there."

[Midpack]

Quote:

Originally Posted by MikeyMarks That chart says it all, thanks. But wait for all the "But this time it's different" comments. : )

Hasn’t happened yet in the US but if/when it’s ever truly different, there most likely won’t be any good place to put investments anyway, and we’ll have worse things to worry about...

[eytonxav]

Quote:

Originally Posted by Midpack Hasn’t happened yet in the US but if/when it’s ever truly different, there most likely won’t be any good place to put investments anyway, and we’ll have worse things to worry about...

The fear this time that really hands me a laugh are all those running out to the supermarkets and emptying the shelves. Can't say I remember that happening before unless a massive blizzard was being forecast.