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I sold all my tech stocks last Monday and went all in on SPY puts. This will impact way more than 2008.

AnthonyMouse 7y ago
There are a lot of things that are only produced in China, but how many of those things can reasonably be produced somewhere else even if they're currently not? Production issues in China are bad for China, but from an economic perspective they may even stimulate the countries that production moves to. Also, the efficient market hypothesis says that any public information should already be priced in.
- Aperocky 7y ago
  That somewhere else is rapidly becoming a bigger problem than China right now.
- xvilka 7y ago
  If you consider that many countries will be affected by the virus, then the move will not happen in the near term. It might happen after the global recovery though.
- xbmcuser 7y ago
  It takes years to set up industries. This is not a video game other countries cant start producing in the next few months it will take time. And how willing would someone be in investing billions today that might be useful in 1-2 years but at the same time be aware that once china is full production they might not be able to compete for price/quality. Even the machines to manufacture stuff are mostly produced in china
  - Scarblac 7y ago
    Especially if the virus just started building up in the country you'd move the production to.
  - AnthonyMouse 7y ago
    > It takes years to set up industries. It takes years to set up industries from scratch in competition with incumbents. How long does it take when you're the same company, have access to the people who know how to do it and can spend more resources than normal because low supply has resulted in high prices? > And how willing would someone be in investing billions today that might be useful in 1-2 years but at the same time be aware that once china is full production they might not be able to compete for price/quality. Even the machines to manufacture stuff are mostly produced in china It's events like this that cause reevaluation of supply chain diversity. Companies don't want this to happen again, so they keep the new facilities online even when the old ones come back to hedge against it happening again.
  - pergadad 7y ago
    The steel for the machines comes from China, but many of the actual industrial machines are made in Europe and America; especially Germany is famous for that.
alasdair_ 7y ago
Do you think people who are forced to stay home for long periods of time will use less Facebook or Google, or do less online shopping?
- adreamingsoul 7y ago
  I except to see an increase in Internet usage. could be interesting to see how the current capacity can handle the load if sourcing materials from china is a no-go.
- aaomidi 7y ago
  Online shopping needs money. Which most people won't have much of if they can't work.
  - samsonradu 7y ago
    And even if they do have money, the uncertainty around makes people more cautious when spending, limiting unnecessary consumption.
  - flo123456 7y ago
    Speak for the US. ;-) Some countries have health care systems that continue payment when you’re ill or in quarantine. At least for a while.
    - lm28469 7y ago
      As much as I want to believe in that I doubt any system could support even 20% of incapacitated workers at the same time. Most healthcare system in Europe are barely at equilibrium.
      - pergadad 7y ago
        There were a number of stress tests, not necessarily for the health system but for the similarly funded unemployment and social systems. Overall it worked quite well in most of Europe.
xbmcuser 7y ago
I was not talking about tech but production in general. China manufactures a lot more than the tech we use. And also provides materials for production in other countries. For example a jacket or clothes manufacturer in another country might be getting its buttons, zippers etc from China so even their production will slow down or stop.
- pixl97 7y ago
  On Feb 04 it was announced that Hyandui, in South Korea, shut down some car production lines because of lack of parts from China.
emaz1ng 7y ago
I've created an account only to tell you good luck, hope you enjoy your 2nd butthole next week.
streb-lo 7y ago
Why do people think gambling is a good way to get rich all of the sudden?
- solotronics 7y ago
  Changed your mind? I made a good amount of money on those SPY puts. It offset my losses in my 401k entirely, which was my goal.
- bespokedevelopr 7y ago
  because too many people read r/wsb and think they've got an edge now
nojvek 7y ago
Yeah I think I’m going to sell all of mine too. Based on how market reacted on Thursday, it’s a frenzy. What is SPY puts? I think the worst is still to come. Especially since it’s hit the US and we’re hearing of many new cases all around the world. I think we may have a mini recession if we don’t have it under control.

There are a lot of things that are only produced in China, but how many of those things can reasonably be produced somewhere else even if they're currently not? Production issues in China are bad for China, but from an economic perspective they may even stimulate the countries that production moves to. Also, the efficient market hypothesis says that any public information should already be priced in.

Aperocky 7y ago
That somewhere else is rapidly becoming a bigger problem than China right now.
xvilka 7y ago
If you consider that many countries will be affected by the virus, then the move will not happen in the near term. It might happen after the global recovery though.
xbmcuser 7y ago
It takes years to set up industries. This is not a video game other countries cant start producing in the next few months it will take time. And how willing would someone be in investing billions today that might be useful in 1-2 years but at the same time be aware that once china is full production they might not be able to compete for price/quality. Even the machines to manufacture stuff are mostly produced in china
- Scarblac 7y ago
  Especially if the virus just started building up in the country you'd move the production to.
- AnthonyMouse 7y ago
  > It takes years to set up industries. It takes years to set up industries from scratch in competition with incumbents. How long does it take when you're the same company, have access to the people who know how to do it and can spend more resources than normal because low supply has resulted in high prices? > And how willing would someone be in investing billions today that might be useful in 1-2 years but at the same time be aware that once china is full production they might not be able to compete for price/quality. Even the machines to manufacture stuff are mostly produced in china It's events like this that cause reevaluation of supply chain diversity. Companies don't want this to happen again, so they keep the new facilities online even when the old ones come back to hedge against it happening again.
- pergadad 7y ago
  The steel for the machines comes from China, but many of the actual industrial machines are made in Europe and America; especially Germany is famous for that.

alasdair_ 7y ago

Do you think people who are forced to stay home for long periods of time will use less Facebook or Google, or do less online shopping?

adreamingsoul 7y ago
I except to see an increase in Internet usage. could be interesting to see how the current capacity can handle the load if sourcing materials from china is a no-go.
aaomidi 7y ago
Online shopping needs money. Which most people won't have much of if they can't work.
- samsonradu 7y ago
  And even if they do have money, the uncertainty around makes people more cautious when spending, limiting unnecessary consumption.
- flo123456 7y ago
  Speak for the US. ;-) Some countries have health care systems that continue payment when you’re ill or in quarantine. At least for a while.
  - lm28469 7y ago
    As much as I want to believe in that I doubt any system could support even 20% of incapacitated workers at the same time. Most healthcare system in Europe are barely at equilibrium.
    - pergadad 7y ago
      There were a number of stress tests, not necessarily for the health system but for the similarly funded unemployment and social systems. Overall it worked quite well in most of Europe.

xbmcuser 7y ago

I was not talking about tech but production in general. China manufactures a lot more than the tech we use. And also provides materials for production in other countries. For example a jacket or clothes manufacturer in another country might be getting its buttons, zippers etc from China so even their production will slow down or stop.

pixl97 7y ago
On Feb 04 it was announced that Hyandui, in South Korea, shut down some car production lines because of lack of parts from China.

emaz1ng 7y ago

I've created an account only to tell you good luck, hope you enjoy your 2nd butthole next week.

streb-lo 7y ago

Why do people think gambling is a good way to get rich all of the sudden?

solotronics 7y ago
Changed your mind? I made a good amount of money on those SPY puts. It offset my losses in my 401k entirely, which was my goal.
bespokedevelopr 7y ago
because too many people read r/wsb and think they've got an edge now

nojvek 7y ago

Yeah I think I’m going to sell all of mine too. Based on how market reacted on Thursday, it’s a frenzy. What is SPY puts? I think the worst is still to come. Especially since it’s hit the US and we’re hearing of many new cases all around the world. I think we may have a mini recession if we don’t have it under control.