I manage a fund for a living and have been doing this stuff for a while. I'm generally an optimist...and I've never been more terrified in my life than now. This makes 2008 look like a keg party. We have a health crisis and the prescription from government has been to induce an economic crisis, one that's possibly (and increasingly more likely) orders of magnitude worse than anything we've ever seen, including the great depression. We are committing suicide. This is a battlefield triage situation, you save the soldiers you can and read the others their last rights. It makes me utterly sick to say that, but that's the grim reality. We need to immediately change our approach and adopt what the UK is doing. AMA
Dow Falls 2997 points worst drop since 1987 crash
241–250 of 499 posts
Re: Dow Falls 2997 points worst drop since 1987 crash
#242Earlier quoted context omitted.
You're forgetting the fundamental rule of the stock market. Buy low, Sell high.
Exactly. The people that got in in 2008 made out like bandits. The people that wait until 2010 or later missed out on a lot of the gains.
The people that bought right before the crash also made out like bandits. It’s impossible to time the market, just buy if you have money.
Re: Dow Falls 2997 points worst drop since 1987 crash
#243To 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.
Could you define 'much better'? Because we actually do know what the incubation period of this disease is, and we know how the virus has spread. It's a practical certainty that the spread of Covid is goingto gte worse, not better over the next month and that the mitigation strategies are going to completely tank some companies over that time.
Re: Dow Falls 2997 points worst drop since 1987 crash
#244This is the moment that management cuts staff and pushes survivors to work harder than ever with no more than the threat of the axe. Realizing productivity gains from job insecurity is unethical, so it only gets used under the illusion that it is the only way for the employer to survive. The reality is that the employer could have operated like this all along but couldn't drop the axe without looking like a butcher until now.
Getting laid off is sometimes better than surviving the shit show that is now to come. Quitting for new work, even better.
Seize the moment, people. Do not be a victim. You can rebuild your careers. Do not stay with a butcher.
Re: Dow Falls 2997 points worst drop since 1987 crash
#245I’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.
Can't speak to OP but I always think about the "buy low, sell high" cliche. If you follow that idea then when you think the market is high you should not buy.
My personal feeling the last 2 years was that the market was higher than it should have been. So I avoided buying equities. Now that the market is going lower I'm considering buying again.
Re: Dow Falls 2997 points worst drop since 1987 crash
#246Earlier quoted context omitted.
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.
A lot of ventures that were hanging on by threads will be ruined by this, so the pandemic is likely to clear out a lot of the weaker businesses as any good recession or crash is apt to. It will take a while for the marker to grow around that loss (though good in the long term, there is pain in the short). It could also trigger a housing correction, which has ripple effects on the construction industry, and those peop…
"apt to" -- presented in the hopes it is useful.
Re: Dow Falls 2997 points worst drop since 1987 crash
#247Earlier quoted context omitted.
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 reces…
I thought a recession was defined by GDP rather than stock prices.
Re: Dow Falls 2997 points worst drop since 1987 crash
#248Maybe people won't like this question. Is there a point at which does "social distancing" do more economic damage than it does health good?
(Not saying we're there yet, just asking if such a point exists, and when.)
Re: Dow Falls 2997 points worst drop since 1987 crash
#249Earlier 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.
It's not so shallow, the stock market is still bubbly, these are the prices of mid 2017, when everyone said that the stock market is a bubble...
That's what I'm seeing too. Even more, based on the mandated closings and limits on business, there'll be some future econ. damage to restore. How do we lately do that? Stimulus packages, bail-outs, QE. The very same thing that drove us to the [still] frothy highs and ticked up the external debt.
It is a global issue, but at the end each economy will be affected locally.
Let's just hope the human cost could be contained.
Re: Dow Falls 2997 points worst drop since 1987 crash
#250The current S&P P/E ratio is still higher than it was at any other time except the 1920s bubble, the .com boom, and the top of the 1960s bull market. https://www.multpl.com/shiller-pe There are problems comparing the P/E over time periods this long, but it is a cautionary datapoint.
Yeah, when everything is a bubble it’s bound to pop sometime.
Probably just too much free cash for banks.