5 ms·

3-2-1, bull market returns. (I hope)

lisper 7y ago
Why? Are you retired? Because if you aren't, if you're working and putting money into a retirement plan, you are much better off with a bear market, especially one like this that is practically guaranteed not to run for years. When you're a buyer you want prices to be low.
- war1025 7y ago
  Not all people buy stocks just for retirement.
- z9e 7y ago
  Perhaps this person bought stocks outside of their 401k when it was low and is excited about another run of high returns.
- wonderwonder 7y ago
  Except people lose their jobs in a bear market.
- repsilat 7y ago
  This assumes a return to trend, right? If stocks are temporarily depressed you can get them at a discount. If stock prices are permanently lower as a result, though, it's certainly not good for you. And, believe it or not, this is probably the more accepted idea -- that price movements are memoryless, that we shouldn't subscribe to the gamblers fallacy (that down today means up tomorrow), and that being happy for a price drop is a form of timing the market, which is frowned upon. I don't fully buy it, but it's worth thinking about.
  - lisper 7y ago
    > If stock prices are permanently lower The only way that can happen is if the economy is permanently less productive. There are things that can make that happen (climate change, for example) but the corona virus is not among them. Fear of the virus is causing vastly more damage than the virus itself. The virus itself is mainly killing old, unproductive people. I don't want to minimize the severity of the problem or the emotional pain of people who have lost loved ones, but in terms of long-term economic impact the corona virus is really not a problem.
    - repsilat 7y ago
      I mostly agree. Some nits, though: > permanently less productive A short-term reduction in profits reduces the discounted sum of future returns. Not as much as if interest rates were lower, though. Also, the example of the virus could indicate that these infections are on average more common and more severe than we figured, and that could reduce expected long-term growth. Finally, a "pause" on activity could delay productivity increases. Probably a small effect, but this could represent investment not happening in the short term. I sent some lumpy buy orders yesterday, but I'm not sure I was right to.
    - usaar333 7y ago
      This is the reason why more than a 10% drop or so (assuming this doesn't chain-cause a recession) isn't justified. That doesn't mean stock prices aren't permanently lower.
- usaar333 7y ago
  Disagree; you are best off if the economy is growing and doing well. Stocks being cheap is only secondary.
marcinjachymiak 7y ago
Rate cut was already priced in yesterday. CME's FedWatch already had really high odds for this exact cut.

Why? Are you retired? Because if you aren't, if you're working and putting money into a retirement plan, you are much better off with a bear market, especially one like this that is practically guaranteed not to run for years. When you're a buyer you want prices to be low.

war1025 7y ago
Not all people buy stocks just for retirement.
z9e 7y ago
Perhaps this person bought stocks outside of their 401k when it was low and is excited about another run of high returns.
wonderwonder 7y ago
Except people lose their jobs in a bear market.
repsilat 7y ago
This assumes a return to trend, right? If stocks are temporarily depressed you can get them at a discount. If stock prices are permanently lower as a result, though, it's certainly not good for you. And, believe it or not, this is probably the more accepted idea -- that price movements are memoryless, that we shouldn't subscribe to the gamblers fallacy (that down today means up tomorrow), and that being happy for a price drop is a form of timing the market, which is frowned upon. I don't fully buy it, but it's worth thinking about.
- lisper 7y ago
  > If stock prices are permanently lower The only way that can happen is if the economy is permanently less productive. There are things that can make that happen (climate change, for example) but the corona virus is not among them. Fear of the virus is causing vastly more damage than the virus itself. The virus itself is mainly killing old, unproductive people. I don't want to minimize the severity of the problem or the emotional pain of people who have lost loved ones, but in terms of long-term economic impact the corona virus is really not a problem.
  - repsilat 7y ago
    I mostly agree. Some nits, though: > permanently less productive A short-term reduction in profits reduces the discounted sum of future returns. Not as much as if interest rates were lower, though. Also, the example of the virus could indicate that these infections are on average more common and more severe than we figured, and that could reduce expected long-term growth. Finally, a "pause" on activity could delay productivity increases. Probably a small effect, but this could represent investment not happening in the short term. I sent some lumpy buy orders yesterday, but I'm not sure I was right to.
  - usaar333 7y ago
    This is the reason why more than a 10% drop or so (assuming this doesn't chain-cause a recession) isn't justified. That doesn't mean stock prices aren't permanently lower.
usaar333 7y ago
Disagree; you are best off if the economy is growing and doing well. Stocks being cheap is only secondary.

marcinjachymiak 7y ago

Rate cut was already priced in yesterday. CME's FedWatch already had really high odds for this exact cut.