Poll: Market bottom and recovery time?

[24601NoMore]

Hey, everyone..looks like we are in a the midst of a big downdraft with no end in sight. So, curious where you all think the bottom may be, and how long it will take to get back to 4,749 on the S&P (close level on 12/31/21)?

The market is facing huge, unprecedented headwinds and is at least 50% over-valued even at these levels by all traditional metrics. Equities have been hugely over-inflated by roughly $5 Trillion in fiscal stimulus and $120B / mo in QE for the past ~18+ months. All traditional measures of value - CAPE10, Market Cap to GDP and others have been screaming "SELL!" for months now. (Personally, I didn't pay enough attention to those signs and am feeling pretty dumb right about now for not doing so). Now, every moving average (especially the critically important 200 DMA) has fallen and is far in the rearview mirror. The Fed will be raising rates (they "have" to - no choice with inflation at 7.5+%) as many as 7 times this year per most major Wall Street banks. The yield curve is close to inverting, which signals high likelihood of a recession later this year or in early 2023. Sentiment is more bearish than anytime since 2016. And we're on the verge of a major war in Europe, that may already be in the early days. Plus, the algos are selling hard on every rally. I hate to say it, but this market is going down, and it is going down hard.

The only question becomes..where is the bottom? And more importantly, how long until we recover?

To me, all the signs point to a drop of 50% or greater, with it taking 5 years or longer to recover.

Curious on other perspectives..

 

[W2R]

I have no idea! My crystal ball is still broken, drat!

However, I can tell you what my gut feeling (wild, unsubstantiated guess) is right now.

My wild, unsubstantiated guess is that it will hit bottom in early 2023, and it will be back to 12/31/21 levels sometime in 2025. Needless to say, I'm not going to act on this gut feeling! That would be stupid IMO.

 

[cyber888]

Down some days, then market ignores Russia and inflation, and the the market skyrockets back up. Stocks on average beats Inflation.

 

[braumeister]

I feel pretty confident that those who pay the closest attention to market movements (because that's their job) don't know any more than the rest of us.

By my standards, I don't consider any of the major indexes to be down to a point where it's worth worrying about it. They may get there sooner, or maybe later, but not yet.

 

[njhowie]

I like bacon.

 

[24601NoMore]

I feel pretty confident that those who pay the closest attention to market movements (because that's their job) don't know any more than the rest of us.

Then you'll get a kick out of this..I've been following a pretty good YouTube channel called Wealthion run by a former Yahoo Exec (Adam Taggert). He has a lot of great expert guests on his show - people like Lance Roberts, Steph Pomboy and many others. One guest was David Hunter, who claims to have worked on Wall Street 48 years. He has a following on Twitter of 150,000+ people. Crazily, he's calling for a "melt-up" to S&P6000 (!) in the first half of 2022. And people follow him like he's the Holy Pied Piper, hanging on every word, just because he called the last downdraft - although he totally missed the bottom levels. Anyway..it's insane. I personally think he's a pumper working for the big boys so that he can convince Retail traders to stay put while they dump..but while WE all know "nobody knows nuttin" (in the immortal words of John Bogle), there are an amazing out of people out there that have been able to bamboozle the less educated into thinking they are some kind of crystal ball gazing super sage. Sad, really.

All that said, I'm getting a ton of value out of watching the show Lance Roberts is doing every day. He doesn't advocate market timing, but he DOES advocate "risk management" and I personally think there's a lot of value in what he's saying above the old (and IMHO no longer applicable) "just buy and hold forever, and you'll be fine". I think today's algo trading and other factors put buy and hold in the same camp as the DoDo Bird..personally, I wish I had done more "risk management" in my portfolio vs getting greedy last year even after being up 20-30+% on some things..stupid in hindsight. Lance said something the other day I really liked.."managing a portfolio is like managing a garden..you have to know when to plant and when to harvest". SO true.

 

[njhowie]

All that said, I'm getting a ton of value out of watching the show Lance Roberts is doing every day. He doesn't advocate market timing, but he DOES advocate "risk management" and I personally think there's a lot of value in what he's saying above the old (and IMHO no longer applicable) "just buy and hold forever, and you'll be fine". I think today's algo trading and other factors put buy and hold in the same camp as the DoDo Bird..personally, I wish I had done more "risk management" in my portfolio vs getting greedy last year even after being up 20-30+% on some things..stupid in hindsight. Lance said something the other day I really liked.."managing a portfolio is like managing a garden..you have to know when to plant and when to harvest". SO true.

Lance has been telling his same doom and gloom story for over a decade and has been wrong the entire time.

If you had really been listening to and following Lance, you would not have had your 20-30+% on anything.

Go to seekingalpha.com and pull up a list of Lance's articles, find me one that is non-negative or non-pessimistic...in over 10 years!

 

[6miths]

I'm surprised anyone votes in a poll like this. Magical thinking. It will do what it does and defy pundits as it always has.

 

[Fermion]

Some stocks on the market are about 10x overvalued, not 50% and there are some stocks on the market that are trading at decent values (mostly in the biotech sector right now).

 

[24601NoMore]

I'm surprised anyone votes in a poll like this. Magical thinking. It will do what it does and defy pundits as it always has.

Not so sure about that. Today's markets largely move on things like support levels, technical indicators, algorithmic buying and selling, etc. The days of buy and hold are long behind us, and are riding in our parent's Oldsmobiles.

If you don't believe that, go spend some time reading the $SPY tweets. There are big moves being made on every single technical indicator. The charts and graphs will easily blow any of our minds..and THAT is what people are trading on.

Earnings season is largely over - and we fell hard through the floor last week even on strong positive earnings. What else is going to move stocks back north at this point, with the Fed poised to raise 5-7X this year and end QE, and a major European war likely to happen?

We all sadly got caught in a downdraft that shows no signs of abating. Go check tonight's futures if you have a strong stomach. I can easily see a 50+% correction with a 5+ year recovery from here. Which BTW makes David Hunter's call of SPX 6,000+ in 1H22 even more amusing.

I'm 100% positive we will end this year - and likely 2023, possibly 2024 red. The only question is how bad the damage will be. And it would not surprise me one bit to see the S&P down 50+% from 12/31/21 by 12/31/22. The highly abnormal rise in markets the last 2 years "has" to be undone - and this is likely the year that will happen as there are a lot of pins in play that can and likely will, pop the balloon.

BTW, I'm not the only saying this..there are plenty of pretty smart, respectable people all calling for the same. Guess we will see.

 

[Chuckanut]

I'm surprised anyone votes in a poll like this. Magical thinking. It will do what it does and defy pundits as it always has.

My vote is worth every penny I was paid for it!!!!

 

[marko]

I expect that we'll see a big drop and a rapid recovery. My bet: back to normal in 6 weeks. Once we see some direction...market just doesn't like uncertainty. Once we know how things will play out, for better or worse, the market wil calm down.
Meanwhile...buying opportunities. Corporate fundamentals are still sound.

 

[FREE866]

Lance has been telling his same doom and gloom story for over a decade and has been wrong the entire time.

If you had really been listening to and following Lance, you would not have had your 20-30+% on anything.

Go to seekingalpha.com and pull up a list of Lance's articles, find me one that is non-negative or non-pessimistic...in over 10 years!

Exactly

 

[38Chevy454]

I have no idea, but historically any correction or bear market is over and recovery by 2 years. So the question is how much correction. Yes a lot of factors active right now in the world: supply chain issues, inflation is high, Ukraine situation, lack of confidence in govt, lingering covid variants, and whatever other excuse the media and "so called experts" want to blame.

For my advice: stay the course, don't kneejerk react. Ride it out. It will come back and you will be better off in the long term. May just be some speedbumps or temporary roadblocks in near future.

To try and put more positive spin, think of it as stocks being on sale and this is part of the buy low opportunity. Focus on the potential.


Or kind of like if you gamble and are on a hot streak. Just like in that example, you turn cold for a while. This is the time now when you are over the hot streak.

 

[RobbieB]

I'll worry about it next year, got this year covered.

 

[24601NoMore]

Lance has been telling his same doom and gloom story for over a decade and has been wrong the entire time.

If you had really been listening to and following Lance, you would not have had your 20-30+% on anything.

Go to seekingalpha.com and pull up a list of Lance's articles, find me one that is non-negative or non-pessimistic...in over 10 years!

Out of the (probably hundreds) of so called analysts I've listened to over the years, I find Lance to be the most solid.

If you're looking to get rich quick with gains that far outpace the averages, Lance is probably not going to be someone you enjoy listening to. Because unlike the hucksters, the guy only talks from a position of common sense and reason.

On the other hand, those of us who desire to keep the money we've earned while still growing it at a respectable level without the extreme ups and downs (hey, just "buy and hold - that'll work out GREAAAAAT!" - um, no, it won't, unless you enjoy watching your net worth drop by up to 50% or more), then I find the advice that Lance gives beyond invaluable.

You might want to try subscribing (totally free) to his daily market commentary. It's literally the single best, well-reasoned source of info I've found.

 

[24601NoMore]

BTW..Futures:

- Dow: -451
- NAS: -309
- S&P: -67

Tomorrow gonna be UGLY..continuing an ugly YTD.

2022 will likely end red. Probably bigly (30-50+% down). Only question is how long it will take to recover back to 12/31/21 levels.

 

[njhowie]

BTW..Futures:

- Dow: -451
- NAS: -309
- S&P: -67

Tomorrow gonna be UGLY..continuing an ugly YTD.

2022 will likely end red. Probably bigly (30-50+% down). Only question is how long it will take to recover back to 12/31/21 levels.

Another prognosticator will likely be proven wrong.

 

[njhowie]

If you're looking to get rich quick with gains that far outpace the averages, Lance is probably not going to be someone you enjoy listening to. Because unlike the hucksters, the guy only talks from a position of common sense and reason.

Again, you would not have made 20-30+% if you had been listening to Lance.

It's not about getting rich quick. It's about making any money at all. Buy and hold (most any index fund) trampled Lance over the past decade - fact. Please, tell us, when has he been right over the past decade? Biggest bull market in history and he sat out the entire time.

 

[ownyourfuture]

The Fed will be raising rates (they "have" to - no choice with inflation at 7.5+%) as many as 7 times this year per most major Wall Street banks

Is 25 basis points up or down the minimum for a fed move ?
I'm not making any predictions, but I do know all the Fed has done to this point is talk about raising rates. There's plenty of people that have a better understanding of the economy than I do, but didn't the fed (in the past) try to address inflation 'before' it reached the highest level in 40 years ?

 

[24601NoMore]

Another prognosticator will likely be proven wrong.

I'd actually LOVE to be proven wrong, as I'll largely be out of the market once we get back to 12/31/21 S&P levels. However, I don't expect that to happen again this year, let alone next. Possibly not for 5+ years. (I'm not alone in this observation..go watch some recent interviews with Steph Pomboy, who's far smarter than I'll ever be, among many others).

I think it'd be helpful if those who have an opinion to the contrary would articulate the underlying reasons why, vs just "you're wrong!". I see clear headwinds in 2022: a Fed that "has" to raise rates 4-7x, min 25 bps at a time and who also has to end QE. A market over-valued by any historical measure by at least 50%. War in Europe. Inflation at 7.5+%. All technical support levels totally destroyed. Algo selling < 200 DMA and below key support levels. etc.

If stocks are to go up from here (or even end 2022 green vs hard red), it'd be helpful to have a discussion as to why people think that is..with some well reasoned positions..that is after all the whole point of the poll.

 

[MRG]

I'll worry about it next year, got this year covered.

+1. I got a MYGA maturing in 2023, till then I'm covered. So I guess I'm covered till mid 2024 then I can worry or do some Roth conversions on equities at 50% off.

 

[Gumby]

.... (I'm not alone in this observation..go watch some recent interviews with Steph Pomboy, who's far smarter than I'll ever be, among many others)....

This and prior posts citing some guy named Lance have constituted an "appeal to authority" as a method of argument. That only works if everyone accepts the authority to which appeal is made. I have no idea who these people are or why I should accept their authority. I suspect others do not either. The fact that you consider Steph and Lance as authority is irrelevant.

If you have a good argument, you should just make it. Most people on this board are smart enough to recognize a good argument when they see it. The fact that others may agree or disagree with you will not matter if your argument is sound.

Just so you know, I have no view as to whether your stock market prediction is correct or not. But your appeals to authority do not move me to greater acceptance.

 

[aja8888]

David Hunter has a worse track record than Lance Roberts. Lance is selling his tech charting service. Hunter is just plain going brain dead.

 

[jazz4cash]

I'm 100% positive we will end this year - and likely 2023, possibly 2024 red. The only question is how bad the damage will be. And it would not surprise me one bit to see the S&P down 50+% from 12/31/21 by 12/31/22. T

How can you be 100% positive? That's powerful information!

I'd actually LOVE to be proven wrong, as I'll largely be out of the market once we get back to 12/31/21 S&P levels. However, I don't expect that to happen again this year, let alone next. Possibly not for 5+ years.

I think it'd be helpful if those who have an opinion to the contrary would articulate the underlying reasons why, vs just "you're wrong!". I see clear headwinds in 2022: a Fed that "has" to raise rates 4-7x, min 25 bps at a time and who also has to end QE. A market over-valued by any historical measure by at least 50%. War in Europe. Inflation at 7.5+%. All technical support levels totally destroyed. Algo selling < 200 DMA and below key support levels. etc.

If stocks are to go up from here (or even end 2022 green vs hard red), it'd be helpful to have a discussion as to why people think that is..with some well reasoned positions..that is after all the whole point of the poll.

This is difficult for me to understand. If you are 100% positive the market will be down by as much as 50% within the next 10 months, why would you wait for a recovery back to the level of 12/31/21? We're only down ~9% so far. It seems that you are stuck with your position.....didn't the experts you mentioned advise getting out before the downdraft?