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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

#481

Post by aguyfromnb »

_bxg1 wrote: post #404
aguyfromnb wrote: post #390

Earlier quoted context omitted.

> you're taking it out of context You claimed the the GFC and dotcom bust "revealed fundamental problems in the marketplace" , but "In this case...the primary mechanism is "people can't work/aren't going out and buying things". That's..going to "go back to the way things were" To which I explained to you there are fundamental issues with this as well, mainly the world's second largest economy is messed up, royally. W…

From my own comment: > the primary mechanism is "people can't work/aren't going out and buying things" As soon as it's safe, people will very quickly start working and consuming again. The world around that mechanism will have changed - some businesses will have closed, some jobs will have been lost, some personal finances will have taken a hit - but people's desire to work for income and spend money on goods didn't…

>As soon as it's safe, people will very quickly start working and consuming again.

Your premise is at fault ("this is about buying goods"). The virus is a catalyst, not a cause.

Do you know if the Chinese economy will ever recover in the way you claim? Are you even considering the world outside your country? This is bigger than a few people not going out to bars and restaurants. Industrial production has been slowing for months, global debt was increasing exponentially for a decade, political tensions are rising globally, people are dying around the world because of government mismanagement of a pandemic.

You can keep repeating that things will go back to normal when people start shopping again, but if that's the extent of how you view what's happening now, you're likely wrong.

Re: Dow Falls 2997 points worst drop since 1987 crash

#482

Post by aguyfromnb »

Sargos wrote: post #424
aguyfromnb wrote: post #387

Earlier quoted context omitted.

> Goldman Sachs already said they expect a further drop of 20%. Of course, this is just the beginning. In November, Goldman Sachs was calling for 3.5% Global GDP growth. They are guessing, like the rest of us.

They would have likely been right if not for Covid 19. It's not just guessing.

>It's not just guessing

You're right, there's a lot of research that goes into the forecasts. What I meant was the results are no better than guessing.

>They would have likely been right

I would have likely been right about every forecast I've ever made if it wasn't for unexpected things happening.

Covid19 had started in China in November, when the forecast was made. How did they account for it in their models? "It won't matter" was a huge miss.

How about this one?:

"According to Goldman Sachs, Brent and WTI crude oil spot prices could average $63 per barrel and $58.5 per barrel, respectively, in 2020."

We're at https://marketrealist.com/2019/12/oil-prices-outlook-goldman...

You can endlessly Google examples. My point isn't that I'm better, but that Goldman Sachs' predictions are nigh worthless. And that's before taking into account any conflict of interest.

Re: Dow Falls 2997 points worst drop since 1987 crash

#483

Post by koheripbal »

cycop wrote: post #270
Zenst wrote: post #231

Earlier quoted context omitted.

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.

Those are pretty normal restrictions. Why on Earth are you withdrawing that much cash?

Your account is FDIC insured up to $250,000.

Re: Dow Falls 2997 points worst drop since 1987 crash

#484

Post by ninkendo »

adam_fallon_ wrote: post #152
rconti wrote: post #95

Earlier quoted context omitted.

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.

You're forgetting the fundamental rule of the stock market. Buy low, Sell high.

> Buy low, Sell high.

Come up with a good definition of "low" and "high" when you don't know the short/medium term future, and you'll have figured out this whole "investing" thing better than anyone else!

Re: Dow Falls 2997 points worst drop since 1987 crash

#485

Post by hitpointdrew »

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.

A few typically means 2. Sure you can cherry pick one stock that didn't recover from 1989, but on average the market as a whole always recovers. Yes, there are outliers with some individual stocks.

Re: Dow Falls 2997 points worst drop since 1987 crash

#486

Post by hitpointdrew »

mgolawala wrote: post #184
badfrog wrote: post #94

Earlier 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?

First, there is always the possibility that I could be wrong. The markets could hover around these levels and fall no further. Second, I may not know when to buy back in. Do I back in after they have fallen 10%? How about 20%? Should I wait till 25%? What if it goes down another 3% and then starts to head backup.. and then back down again above these levels before falling another 30%? What you are suggesting is marke…

> Do I back in after they have fallen 10%? How about 20%? Should I wait till 25%?

You should not try to time the market. And hopefully you don't really mean "buy back in" (meaning your panicked and sold, you should just be adding/averaging down). Just look for general buying opportunities and don't kick yourself if the market falls a bit further before it rebounds.

Re: Dow Falls 2997 points worst drop since 1987 crash

#487

Post by deanmoriarty »

tarsinge wrote: post #474
deanmoriarty wrote: post #402

Earlier quoted context omitted.

Could you please substantiate your claims? This is what I mean and what I do, by always allocating the same amount of savings per year, in good or bad times [1]. You can see how in 2008 such portfolio had a drawdown of more than -50%. Despite that, it performed well above the 8% IRR I mentioned. Another interesting data point, by investing lump sums of money at the very peak of every market cycle, immediately followe…

The past is not a predictor of the future, 2008 is a single point hardly representative of any economic crisis to come. A lump sum invested in 1929 would have taken decade to recover, and with the Nikkei it still wouldn’t have. These models based on 1 or 2 selected crisis as if we had seen all always amaze me.

it’s obvious that past performance is not a predictor for the future. Yet, I could have said your same exact words in 2000 and 2008: “this time is different, let me go out of the market!”.

I don’t know any other investment which is completely passive that will statistically allow me to grow my capital over the long term. So yes, I will rely on 100 years of data I have, and to prevent Nikkei I try to diversify using a healthy international allocation. If you have a different investing vehicle to suggest, please let me know.

Re: Dow Falls 2997 points worst drop since 1987 crash

#488

Post by dev-ns8 »

raincom wrote: post #461
dev-ns8 wrote: post #334

Earlier quoted context omitted.

I look at it this way. Your essentially buying a companies future earnings by buying their stock. For some time here, corporate earnings are going to take a hit. B2C probably the hardest, but B2B will also feel the effects, ripple effect if you will. The strain these quarantines are putting on Small business owners will also ripple into the larger corporate companies that the market is composed off because these SBO…

repo markets don't help corporate debt at all, as long as the federal reserve don't accept the commercial paper (corporate debt, in other words). The moment the fed accepts commercial paper as collateral, yes, it does. However, this will lead to a bigger problem. If S&P drops ratings for many companies, many banks will end up holding bags; in which case, the fed will come to rescue these banks.

> "repo markets don't help corporate debt at all"

I'm not sure I agree with this statement. The repo market may not help or hinder corp debt directly, but I think it very much so effects corporate debt.

Corporations presumably get their loans from banks. What facilitates banks to make these loans? The Repo market. What happens if the repo market collapses / shrinks / endures instability? Banks most likely, would not be able to make as many loans and the rate for future loans would increase due to lower supply and higher demand.

On top of future loans, this could have a negative impact to current outstanding loans held by corps. I'm not 100% sure the terms of corporate loans, but if they have variable rate loans with banks, this shrinking of loan supply coupled with increased demand for liquidity would surely hurt some of these corporations.

Re: Dow Falls 2997 points worst drop since 1987 crash

#489

Post by xtracto »

makomk wrote: post #277
vngzs wrote: post #212

Earlier quoted context omitted.

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...

The person described in that Vox article - upper respiratory symptoms, no direct contact with someone with confirmed Covid-19 - wouldn't meet the criteria for testing anywhere that I know of off-hand. Certainly not in the UK or Australia, probably not in South Korea (though they allow people who don't qualify to buy testing out of pocket), not in a whole bunch of EU states, and Italy has much bigger things to worry a…

In my country, you get tested even if you haven't had direct contact with confirmed COVID19, but have the symptoms and have travelled to selected countries or states in the last 4 weeks.

Re: Dow Falls 2997 points worst drop since 1987 crash

#490

Post by jfengel »

sfritz wrote: post #208
jfengel wrote: post #96

Earlier quoted context omitted.

Or at least, things claiming to be hand sanitizer. Which just makes the rule more absurd. If you've got a favorite shampoo, time to go looking for a nice large hand sanitizer bottle to transfer it to. (Though I wouldn't do that for contact lens saline, a thing I'd kinda like to bring on in large bottles, since the small ones are absurdly expensive and somewhat less available.)

They technically allow large bottles of contact solution in carry-on because it's a medical necessity ( https://www.tsa.gov/travel/security-screening/whatcanibring/... ). I just keep it in my toiletries bag and they pull it out to run a quick test most of the time.

That's good to know. Thank you.
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