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Dow Falls 2997 points worst drop since 1987 crash

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Re: Dow Falls 2997 points worst drop since 1987 crash

#31

Post by nostromo »

SirensOfTitan wrote: post #25

I’m buying S&P index every day at this point, trying to drive my average down without trying to find the bottom. ...with that being said, I feel really worried about American economic stability long term now. Governors are closing restaurants and businesses leaving tons of folks out of work while providing minimal safety net coverage. Even liberal states like New York are ignoring the downstream economic effects thes…

This is similar to 9/11 where politicians would act without thinking just to appear like they were doing something. Security theater was the norm for many years.

Re: Dow Falls 2997 points worst drop since 1987 crash

#32

Post by ScoutOrgo »

lettergram wrote: post #26

Just my 2 cents - Take your assets out of the market. Until we (in the US) see a few senators, a justice or two and / or the VP/president/etc succumb to the disease we haven’t hit peak panic. ~50% of the workforce is about to be out of a job for a few weeks. A large portion of Restaurants are about to go bankrupt, daycares are about to go bankrupt. Houses are about to drop in price (no money, and elderly dying). The…

But if you sit on cash, you will miss the day where it has a huge gain due to some news like a vaccine announced.

Re: Dow Falls 2997 points worst drop since 1987 crash

#33

Post by aazaa »

> Our Advise: It is time to carefully pick up some stocks based on crushed valuations, but the market is not likely bottoming. It’s hard to say are we two weeks away or months away from market bottoming.

You'll know it's time to buy when the advice you get from permabulls like the mortgage industry is to sell.

What will happen in between? Failed rally after failed rally. Bear market rallies are extremely effective destroyers of capital. The suck the gullible in and spit out the bones.

By the time it's really time to "pick up some stocks based on crushed valuations," nobody will care about stocks. And nobody will care about or believe the rally.

Re: Dow Falls 2997 points worst drop since 1987 crash

#34

Post by mdgrech23 »

zizee wrote: post #20

PSA: The Dow Jones industrial average is a terrible measure of the stock market. It tracks just 30 stocks, some which have an outsized influence on the measure. This is not to say the stock market is not in freefall, but there are much better indexes to track general market movement.

I wouldn't say it's terrible but if you're looking for a quick way to assess the market there are better options such as the Wilshire 5000 index. That being said that's crashing too so it doesn't really matter. The market is crashing folks, thats the reality of the situation.

Re: Dow Falls 2997 points worst drop since 1987 crash

#35

Post by selectodude »

tathougies wrote: post #23
ghastmaster wrote: post #18

Housing needs to follow. For people looking to get into the market like me, these prices are a barrier.

Housing is unlikely to follow unless more old people die of covid than expected. Rates are so low and big money will be looking to diversify into alternate asset classes.

A million dead, mostly elderly, is not completely out of the realm of possibility, especially if we hit the high end of 150 million infections in the US. Statistically, 150 million infections would kill closer to 4 million.

Re: Dow Falls 2997 points worst drop since 1987 crash

#36

Post by marcinjachymiak »

anonu wrote: post #7

Worst drop ever for the Nasdaq Index today: -12%. These aren't 1, 2 or 3 standard-deviation events... these are more like 6 or 7 standard-deviations from the mean...

If you're experiencing 6 sigma events daily, your modelling is wrong.

Re: Dow Falls 2997 points worst drop since 1987 crash

#37

Post by legitster »

I'm a bit more optimistic about this crash - a significant portion is due to the (important) constraints on society - closing schools and restaurants. Meaning we can look forward to some pent up demand on the other side when those constraints are loosened.

On the other hand, if the US goes into lockdown for a month or more, there's a significant chance that we could be returning to a world very unlike today. The market does not like this kind of uncertainty, and an house of prevention would have been worth $10 trillion dollars of cure.

Re: Dow Falls 2997 points worst drop since 1987 crash

#38

Post by btilly »

whatshisface wrote: post #10

All of the return-seeking money that pushed up asset prices in the first place is still out there, because stock market crashes don't destroy money (they just redistribute it). I wonder who has it now, and I also wonder when it will end up back in the market.

...stock market crashes don't destroy money (they just redistribute it).

Source needed.

Stock market crashes absolutely destroy money by any reasonable definition of the money supply.

Re: Dow Falls 2997 points worst drop since 1987 crash

#39

Post by 01100011 »

ghastmaster wrote: post #18

Housing needs to follow. For people looking to get into the market like me, these prices are a barrier.

Are you really sure this is a good time to get into the market? I mean, property is usually a good long-term bet and rates are low, but you'd have to be pretty liquid to want to move now. Then again, if you think inflation is going to come in a big way, todays prices are reasonable.

Re: Dow Falls 2997 points worst drop since 1987 crash

#40

Post by usaar333 »

anonu wrote: post #7

Worst drop ever for the Nasdaq Index today: -12%. These aren't 1, 2 or 3 standard-deviation events... these are more like 6 or 7 standard-deviations from the mean...

Vix is currently at 82%, rather than a more typical 15%. You should expect daily fluctuations of 5 to 6x what is ordinary for the next month. In fact today's drop is only about 1 standard deviation.
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