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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

#191

Post by legitster »

2OEH8eoCRo0 wrote: post #140
legitster wrote: post #37

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 mark…

I think it's showing all the cracks in the US system. A large part of the country scrapes by, have no savings, have no access to healthcare, etc.

For sure. But I don't think that's fundamentally different than any other crash in the US. But it may show that there is an economic benefit to having a stronger welfare net.

Re: Dow Falls 2997 points worst drop since 1987 crash

#192

Post by Kerrick »

badfrog wrote: post #94
hitpointdrew wrote: post #84

Earlier quoted context omitted.

That is opposite of what you should do. You would just be locking in losses (or greatly reduced profits). As long as you are reasonably sure you can hold your stocks for a few years then just hold on to them. Or better yet, go on buying spree and get cheap stocks.

My read of "I think a severe recession is all but guaranteed" was that OP thinks prices will continue to fall. Am I misinterpreting?

The textbook definition of a recession may mean that prices will continue to fall until the recession ends -- in fact, as soon as prices rise it ends the recession. But by that definition, the "great recession" ended in the USA in June 2009.

I'm guessing the above poster meant something more like "period of society-wide economic hardship" by recession. By that more colloquial definition, you might say the great recession lasted through 2014. The stock price plummet, however, was largely finished for most of that period of hardship.

I have no crystal ball; I can't tell you where we are going to be. But if the above poster meant "We're past the plummet, all that's left is the slow climb back to normalcy" then their comment makes more sense.

Re: Dow Falls 2997 points worst drop since 1987 crash

#193

Post by KMag »

nabla9 wrote: post #78
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.

Most of the SP500 movements come from small number of companies too. Dow Jones is bad index but the narrow number of companies is not the worst part. DJIA is price-weighted index which is completely arbitrary and there is no reason for that. They can't add Berkshire Hathaway into the index without completely changing the rules. BRK-A price is so high. Index would track only BRK-A after that.

"DJIA is price-weighted index which is completely arbitrary and there is no reason for that."

Well, I believe the reason is that it's much easier to calculate on hand-cranked mechanical adding machines. There is a reason, but it's obsolete.

Re: Dow Falls 2997 points worst drop since 1987 crash

#194

Post by seanmcdirmid »

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…

Looking through Wikipedia, only one congress person was known to die of Spanish flu (https://en.wikipedia.org/wiki/Jacob_Edwin_Meeker), so I don’t think the numbers will get up enough in this pandemic to effect someone high profile in government.

Re: Dow Falls 2997 points worst drop since 1987 crash

#195

Post by rabidrat »

kirse wrote: post #103
Hasz wrote: post #47

Earlier quoted context omitted.

Absolutely. I'm 21 -- I have 30 to 40 years to weather this storm. For people of similar age, you could not ask for a shallower entry into the market, albeit a tumultuous one.

Having been roughly in your position back during the 2008 dump... https://news.ycombinator.com/item?id=318595 Don't forget, the market can drop 20% a day for awhile. Plenty of smart folks are sitting on the sidelines with cash, but time will tell if this is the trigger for a much larger longer-term 2020 deleveraging. Markets aren't even where they were pre-Trump election yet, so this 30% haircut from the top isn't ev…

FWIW, I was ballsier back in 2008 and bought WAMU on the way down. It's exciting to watch your investment go all the way down to 0 :/

Re: Dow Falls 2997 points worst drop since 1987 crash

#196

Post by everybodyknows »

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…

Analyst sees 2000 SP possible with worst-case government policy responses:

https://www.marketwatch.com/story/coronavirus-stock-market-p...

Re: Dow Falls 2997 points worst drop since 1987 crash

#197

Post by [deleted] »

throw03172019 wrote: post #93
nodesocket wrote: post #60

Earlier quoted context omitted.

Great point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their trades to bull. However, keep in mind, a market down 30% requires a 43% gain to break back even.

Sorry for a maybe dumb question but what is the logic for 43% gain needed?

[deleted]

Re: Dow Falls 2997 points worst drop since 1987 crash

#198

Post by bryanrasmussen »

jghn wrote: post #160
tinyhouse wrote: post #125

Earlier quoted context omitted.

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.

If one assumes that the market was a powder keg waiting for a spark to explode, it doesn’t matter when the virus part of the equation clears up

I'm hoping for post-pandemic exuberance to lead us out of the economic problems.

Re: Dow Falls 2997 points worst drop since 1987 crash

#199

Post by amiga_500 »

ComputerGuru wrote: post #145
amiga_500 wrote: post #8

I'm quite surprised by this because it was my understanding that companies were doing us a favor by employing most people. That they were forestalling replacing us with robots by paying us near subsistence wages. I'm very confused. On the one hand I have all the things I've been reading in the papers about workers being superfluous. But yet on the other hand when I just look at the evidence, it seems like companies r…

Jobs that were economically beneficial to replace with machines or outsource were replaced with machines or outsourced. People with jobs now have them because they are needed now, even if not in ten years. How is that hard to understand?

I do understand that. I think workers are needed and should be paid well to reflect that, instead of the constant undermining of the psychology of wage negotiation by the apparent imminent replacement by robots.

Re: Dow Falls 2997 points worst drop since 1987 crash

#200

Post by koheripbal »

mcphilip wrote: post #90
legitster wrote: post #37

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 mark…

I think there will be some pent up demand, but some parts of the economy don’t benefit from that —e.g. I’m not going to buy more lattes when things return to normal, I will just go back to my daily fix.

...but you might buy a coffee machine at home to satisfy that fix over the next 3 months.
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