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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

#171

Post by kaitai »

rconti wrote: post #95
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…

Every time I see this, I fail to grasp the logic. So you had money sitting on the sidelines for safety during boom times, and you elect to put it in a riskier asset class during a panic? I'm not saying this isn't likely the most profitable action, I just don't see how the principles are consistent with each other. The former is conservative; the latter is wildly speculative and risky.

If you have enough money, you can do some of both.

Re: Dow Falls 2997 points worst drop since 1987 crash

#172

Post by addicted »

nostromo wrote: post #111
quadrangle wrote: post #48

Earlier quoted context omitted.

I hope you're not saying that measures which actually achieve more social distancing is somehow theater.

If our response has been commensurate with the threat or an overreaction is definitely an open question. One we probably won't be able to answer definitively for a while.

Which is exactly why it isn’t an overreaction.

Thanks to the lack of testing we have no idea how bad this is. And due to the severity of the worst case scenarios and relatively high probability of them be happening, in the absence of more information, an overreaction is indeed prudent.

That’s what people don’t get. Uncertainty often increases the need for more action, it doesn’t reduce it.

Re: Dow Falls 2997 points worst drop since 1987 crash

#173

Post by ksj2114 »

rconti wrote: post #95
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…

Every time I see this, I fail to grasp the logic. So you had money sitting on the sidelines for safety during boom times, and you elect to put it in a riskier asset class during a panic? I'm not saying this isn't likely the most profitable action, I just don't see how the principles are consistent with each other. The former is conservative; the latter is wildly speculative and risky.

Would I have rather bought two weeks ago at 3000+ or today at 2400? Answer: today! The logic is that eventually the market will recover and you want to buy before that happens.

Re: Dow Falls 2997 points worst drop since 1987 crash

#174

Post by fuckknows »

tinyhouse wrote: post #125
mgolawala wrote: post #11

To put it into perspective, the last time the market behaved like (multiple drops of this magnitude) this was 90 years ago, in 1929, and it was at the start of the Great Depression. Today was the second largest percentage drop for US Markets in history. Now is not a good time to sell your stock holdings (at least not anymore). This smells of a panic right now. I think a severe recession is all but guaranteed at this…

No one knows. You have the entire world working (mostly together) on ending this. I'm optimistic things will get much better in a month or so.

This is going to take much longer than that to play out.

Re: Dow Falls 2997 points worst drop since 1987 crash

#175

Post by gizmo686 »

rconti wrote: post #95
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…

Every time I see this, I fail to grasp the logic. So you had money sitting on the sidelines for safety during boom times, and you elect to put it in a riskier asset class during a panic? I'm not saying this isn't likely the most profitable action, I just don't see how the principles are consistent with each other. The former is conservative; the latter is wildly speculative and risky.

Its not fundamentally crazy.

In one sense, standard investing advice is to periodically rebalance between investment classes when your holdings diverge too much from you desired profile. In this, for a "simple" investor, that would probably mean transfering from bonds to stocks; since the portion of your portfolio that is in stocks recently fell substantially below your desired portion.

Assuming an efficient market, it is almost a no brainer that you should rebalance. Since your risk profile didn't change from a month ago, and stocks are being correctly valued, your portfolio is now overly conservative.

If you dont believe the market is effiecient, the question becomes 'in what way is the market inefficient?'. If you believe it is now undervalues stocks, you should buy them since they are now on sale for a bargain price.

Personally, my view is that the market is irrational, but I don't know how; so I am planning on not reballancing until after the dust settles. This minimizes the downside risk caused by me not knowing what I am doing.

Re: Dow Falls 2997 points worst drop since 1987 crash

#177

Post by joe_the_user »

Reedx wrote: post #118
mgolawala wrote: post #11

To put it into perspective, the last time the market behaved like (multiple drops of this magnitude) this was 90 years ago, in 1929, and it was at the start of the Great Depression. Today was the second largest percentage drop for US Markets in history. Now is not a good time to sell your stock holdings (at least not anymore). This smells of a panic right now. I think a severe recession is all but guaranteed at this…

Maybe, but why don't you think the markets will bounce back once we're on the other side of this? Have underlying fundamentals changed longer term? South Korea, China, Singapore are encouraging and seeing a return back to (almost) normal life. Granted, we're not dealing with this nearly as effectively and there may be a 2nd wave to come. But at this point they seem to make the case for optimism.

South Korea and China itself are the best models for countries that have (sort of) bounced back. And they leveraged a variety of mass mobilizations the US hasn't started with. So basically we're in for a LOT of pain in dealing this.

Exogenous shocks usually don't provoke recessions but is going to be like a planet-wide tidal wave. Things are going to be very different at the end. Huge, efficient enterprises may well end up even stronger but would the market for a given medium sized enterprise even make sense? We don't know.

Re: Dow Falls 2997 points worst drop since 1987 crash

#178

Post by bsanr2 »

koheripbal wrote: post #98
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…

> Even liberal states like New York are ignoring the downstream economic effects these closures will cause What do you suggest they do? Keep restaurants open? Also - I think they're hoping that people will still order restaurant food - just at home and have it delivered. ...might be a boon for Chinese restaurants, ironically.

Cash transfer from wealthy individuals and families via the IRS.

Re: Dow Falls 2997 points worst drop since 1987 crash

#179

Post by addicted »

xnyan wrote: post #129
koheripbal wrote: post #98

Earlier quoted context omitted.

> Even liberal states like New York are ignoring the downstream economic effects these closures will cause What do you suggest they do? Keep restaurants open? Also - I think they're hoping that people will still order restaurant food - just at home and have it delivered. ...might be a boon for Chinese restaurants, ironically.

UBI, tax credits, emergency direct to consumer low interest loans with suspended interest in the crises or all of the above.

It’s very difficult for state governments to do these things although the state governments re trying.

Frankly they need the federal government to step in.

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