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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

#261

Post by tomp »

koheripbal wrote: post #91
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…

Two points. 1. Today's drop is sort of misleading because it followed an irrational (IMO) low volume rally on Friday. We're still roughly flat from last week. 2. A recession is pretty much what we're ASKING for in order to stop the virus. People need to stay away from one another. So if it's not online, the business should be closed. 3. (bonus point) Unlike systemic recessions (like 2008), this one is purely external…

A lot of the companies won't survive.

A lot of the companies that do survive, will take a huge beating by the government, forcing them to be more resilient (to supply chain problems, short-term lack of labour, ...), reducing expected profits.

I 100% expect made in USA (or made locally for other countries) to be the selling point of both Trump and the Democratic candidate the next election. Most certainly after a shock like this.

Re: Dow Falls 2997 points worst drop since 1987 crash

#262

Post by prewett »

mschaef wrote: post #206
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.

> As long as you are reasonably sure you can hold your stocks for a few years then just hold on to them. What's 'a few years' mean to you? The Nikkei hit its high of 40K around 1989-89 and hasn't traded above 80% of that in the 30 years since.

You could take the absolute worst case scenario if you want, I guess, but every other peak in the history of world markets has come back faster than that... Besides, that's not even fair. Why are you assuming the parent is talking about holding stocks bought at the peak? The kind of people that hold their stocks for years tend to be the kind of people who don't buy at a peak. Long-termers tend to be more of the Buffett persuasion; he has said that he wouldn't care if the market completely closed for 10 years, because he buys businesses that grow in good times and bad, and he collects dividends in good times and bad. All the while the employees of the companies are spending their efforts in making his stock more valuable.

Re: Dow Falls 2997 points worst drop since 1987 crash

#263

Post by chrischattin »

lancewiggs wrote: post #239
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…

The S&P500, the best general index, closed at 2386 today. It's risen over 300% since the last crash, the GFC in 2007. It's been an extraordinarily lengthy bull run, and well overdue fo a crash. Before the GFC the index was 1550, and after it was ~760 (~50% drop) At the peak of the dotcom boom it was generally under 1500. In 2002 after that crash it was 800. (45% drop) The recent peak was ~3380. A 50% drop is ~1700, w…

9/11 happened during the dotcom crash, which likely had a much greater effect on the economy as a whole.

Re: Dow Falls 2997 points worst drop since 1987 crash

#264

Post by pmiller2 »

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…

I don't plan on selling, but if things don't get better in a couple weeks, I'll be doing some tax loss harvesting by selling some VT and VTI and buying VOO or the equivalent.

Re: Dow Falls 2997 points worst drop since 1987 crash

#265

Post by m3kw9 »

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…

Is not bad to sell, the problem with most people selling is they won’t get back in till things go way up, trying to time the bottom and missing the run waiting for it to come back angry that they missed the gains.

Re: Dow Falls 2997 points worst drop since 1987 crash

#266

Post by coliveira »

akvadrako wrote: post #237
xwdv wrote: post #149

Earlier quoted context omitted.

Others have already forecast a drop of at least 60%. 20% is definitely only the beginning.

If anyone could predict the stock market they wouldn’t be telling you.

The issue is not prediction, is expectation. The market moves on expected outcomes, not on reality. The reality may change down the road, but the expectation is to go down a lot more.

Re: Dow Falls 2997 points worst drop since 1987 crash

#267

Post by buboard »

vngzs wrote: post #212
gotoeleven wrote: post #185

Earlier quoted context omitted.

What lack of urgency are you talking about?

The US lags just about every developed country on testing for Covid-19 disease.[0] ‘It’s Just Everywhere Already’: How Delays in Testing Set Back the U.S. Coronavirus Response[1] [0]: https://www.vox.com/science-and-health/2020/3/12/21175034/co... [1]: https://www.nytimes.com/2020/03/10/us/coronavirus-testing-de...

as a non-US person, the US can do much more than testing, (which is what most other countries can do). A cure, or a quick vaccine is what matters, testing is just a measure of how bad you are performing. Containment measures are necessary, and they work, but eventually we ll all get the virus, in a vaccine or not

Re: Dow Falls 2997 points worst drop since 1987 crash

#268

Post by kradroy »

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…

I have never thought about all-out selling during this. In fact I'm buying more with each dip. I feel that securities are a bargain right now. With select selling I'll also be taking advantage of tax loss harvesting for years to come.

Re: Dow Falls 2997 points worst drop since 1987 crash

#269

Post by matwood »

addicted wrote: post #157
m_a_g wrote: post #122

Earlier quoted context omitted.

>...this one is purely externally driven (like 2001) - which means it's temporary. This can't be stressed enough. It may take a while but everything is going to be alright and normal again.

I don’t get this. If a meteor hits the earth and wipes out 25% of the population, that would be external. But there’s absolutely no reason to believe the significant reduction in economic activity and wealth would be temporary.

You think COVID-19 is going to kill 25% of the population?

Re: Dow Falls 2997 points worst drop since 1987 crash

#270

Post by cycop »

Zenst wrote: post #231
koheripbal wrote: post #104

Earlier quoted context omitted.

Bankruptcies can be pretty damaging. If we see a lot of loan defaults, we might see a banking crisis. ...but probably not. Banks are very well capitalized these days - much much better than 2008.

Banks can cover some things going wrong, sometimes, not everything going wrong at once. Just takes one queue at a bank, few social media posts and next thing, all those branches have queues due to panic and end up with a self fulfilling prophecy so to speak. Heck, if people can panic buy toilet roll, nothing is out of the reach of stupidity.

My bank would only let me take $3k out today , they said come back tomorrow for another $3k .... it is already starting.
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