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S&P 500 triggers 15-minute trading halt for the second time this week
- marvel_boy 7y agoDo not "buy the dip". It will go down more, like in 2008.
- r0fl 7y agoIt seems everyone is a financial guru these days. I wonder what these people are doing on their keyboards. Why aren't they all on gold plated yachts?
- jansan 7y agoAre there no keyboards on gold plated yachts?
- samstave 7y agoI cant even afford a gold plated keyboard. :-(
- TAForObvReasons 7y agohttps://www.tomshardware.com/news/24k-gold-keyboard https://www.tomshardware.com/news/24k-gold-keyboard
- marvel_boy 7y agoJust ordered !
- econcon 7y agoIsn't buying silver plated better due to germicidal properties of silver?
- Jorge1o1 7y agoI've pulled off some pretty great trades in my time, for example, I had the conviction that the Sprint merger was going to get approved and I bought Sprint stock in January, nearly doubled my money. The only problem is that I've only got $5k to invest, especially if I'm maintaining a healthy rainy day fund. And I'm not throwing all $5k into a single stock. That's why I'm not on a gold plated yacht. The truth is you could be a financial genius but if you grew up in a middle class family and have basically zero inherited wealth, you're not going to have the money to invest.
- bluGill 7y agoIf you are a financial genius you will soon have money to invest, it doesn't take much to start, and every year there are a few doubling opportunities. Most of us are not financial genius and so we only realize they existed in hindsight. However there were always signs that could have been seen in advance - and there are always ways to cut your losses. If you don't start with might it might take 20 years but a real financial genius can be rich even if their source of income during that 20 years is flipping burgers.
- MulliMulli 7y agoHey man, posting this from my gold plated yacht.. want some trading advice?
- logfromblammo 7y ago30% returns on chump change is still chump change, but if you already have a yacht, 30% returns will allow you to gold-plate it. It's far more likely that those financial geniuses are just not worried about retirement or college tuition for their kids. Because the strongest correlating factor for getting richer is already being rich, and not being smart with money. The real question is... why aren't all yachts now gold-plated yachts? If my father gave me $1 billion 40 years ago, I would have to be literally the dumbest idiot in the world--or the unluckiest schliemazel in the world--to have less than that now. Instead, I just got a debt-free bachelor's degree, and so I'm not rich now, but still doing okay.
- Der_Einzige 7y agoSome of us only entered the markets now (puts) because they hedged that they know more about epidemology than investors did. I don't think I can beat wall street except when wall street doesn't know how to respond.
- AznHisoka 7y agoIf your time horizon is more than a year, why not buy the dip? Sure, I wouldn't put 100% of my cash to work right now, but I think it's sensible to come up with a list of stocks you feel are beat up, and dollar cost average buying them. Of course this is hard to do if your portfolio is 100% invested already, and you have little cash left.
- TAForObvReasons 7y agoS&P fell in late 2000 and returned to that peak in in 2007. S&P crashed in 2008 and recovered in 2013. 1 year is way too short a timeline. Maybe 5-10 years is the shortest time horizon to not be worried about market timing EDIT: what part of this comment merited the cascade of downvotes (-5 at this moment)? You can verify the first two points fairly easily, and the last line is general advice given by many financial professionals and evidenced by the first two.
- dragontamer 7y agoAnd for the Tech bubble, Nasdaq peaked at 5,046.86 on March 1999, and didn't return to that level March 2, 2015, 16 years later.
- praveenweb 7y agoFor a 50% fall, there needs to be a 100% increase to reach back the same levels and hence the timelines might be longer.
- AznHisoka 7y agoTrue, but we aren't near the peak. Most likely, you don't need to wait 5-10 years for stocks to go above the current price range. You might need to wait longer for it to return the peak, I agree.
- streetcat1 7y ago"Losers average losers" (Paul Tudor Jones) Do not average down.
- leggomylibro 7y agoEspecially since the number of "confirmed" cases is extremely limited by the number of tests. The infected numbers will rise precipitously as testing rolls out, and the apparent growth rate will freak people out and roil the market more. By all means, please keep selling! Personally, I'm betting that the markets will recover pretty quickly after things actually start to improve, and I'll be surprised if this skittishness doesn't pay for the trip to Venice that I'm now planning to take in the Spring :D It'll still be gamble, but I like these odds.
- XorNot 7y agoThe other way it'll show up in an absence of testing will be hospitals running out of beds. Which will be invisible in the media until it happens and doesn't let up (see Italy, which was doing okay up to a few weeks ago).
- leggomylibro 7y agoI think and hope that's less likely, but it would still be bad for the markets in the short term either way. I don't think that failing to test people in order to artificially reduce "the numbers" will keep the markets afloat for much longer.
- martokus 7y agoA dip implies a bottom exists. Right now it's just a steep slope with no bottom in sight.
- qubex 7y agoA steep slope with no bottom in sight does not imply that a bottom does not exist. Indeed it’s clear that a bottom must exist. Being unable to infer where it may be does not negate that certainty.
- trevyn 7y agoMoney must exist?
- monster_group 7y agoA bottom always exists. It is zero. There is no top however.
- logfromblammo 7y agoLeveraged financial instruments can create a negative bottom. Don't assume anything magical about zero.
- jsight 7y agoHonestly, that is always the mentality of the market. Its going up with no top in sight! The next day its going down with no bottom in sight! Except that bottoms have more natural barriers than tops.
- PragmaticPulp 7y agoDo not get your investment advice from random internet comments. Do not make "all or nothing" investment choices. It's perfectly reasonable to stay the course with bi-monthly investment purchases in your 401k. We will bottom out eventually, but you're unlikely to call the exact bottom.
- totaldude87 7y agoofficially into the bear market.. so far 8000 points down from its peak in a month, Now this may be good for the option sellers or biggies, regular investors should stay away (or use this to accumulate)
- VBprogrammer 7y agoAverage people should not try to time the market for good or for bad. It's a fools errand. Keep putting money into low cost mutual funds, preferably though some tax efficient vehicle (e.g. a pension if possible).
- 76543210 7y agoI'm trying to refinance my mortgage. Is now a bad time to put 20% of my savings into the market? I've been waiting for this moment since 2018
- foota 7y agoProbably a bad time, no telling where the bottom is. Especially if you need the money soon?
- Kabukks 7y agoI wouldn't think we are at the bottom yet. But no one knows.
- podnami 7y agoI would wait. Don’t even try to buy into a dip unless there’s at least some period of stability first.
- deleted 7y ago[deleted]
- twodave 7y agoI'm not a financial advisor, but the phrase "don't try to catch a falling knife" comes to mind here.
- adrianN 7y agoBuy a little each week to spread the risk. Corona will probably get worse for a few more months.
- tehlike 7y agoThis.
- charliemil4 7y ago*This is the way.
- 7y ago
- drcongo 7y agoAs someone who has very little grasp of global markets, I'd kind of assumed that bitcoin and other cryptos would rally if stock markets were falling under a global pandemic, but the cryptos seem to be tanking along with them. Is this down to reduced consumer confidence?
- overcast 7y agoThere's no one left in the world to get sucked into that scam, they all got obliterated in that last run to $21k
- OzzyB 7y agoMore like a "the world is crash and burning I want real cash in my pocket, NOW!" kinda thing. It's hard to buy toilet paper and water with Bitcoin at your local Costco.
- derwiki 7y agoCostco sounds as bad as a flight
- doubleunplussed 7y agoIt's hard to buy toilet paper at all!
- tunesmith 7y agoBuy a $60 bidet attachment, you savages!
- overcast 7y agoThis is going to turn out to be the great investment opportunity that I mostly missed out on in 2008.
- cwilkes 7y agoEveryday is a great investment opportunity given a long time horizon.
- psychometry 7y agoTrue. Investing a little bit each day far exceeds the returns from investing a lot every time there's a local minimum.
- overcast 7y agoThere is no argument that the market for a lot of stocks was completely out of control. When stock charts are a 90 degree angle, trading on average at 25:1 price vs earnings, there is a problem.
- lotsofpulp 7y agoIt's all relative based on what people's options are. What if the government comes out tomorrow and says they will start buying stocks to prop up the values? You're always invested in something, whether it be cash, land, resources, equity, guns, food, water, etc. If you think a handful of large corporations will continue to gain power, it might make sense to pay 25x.
- overcast 7y agoNo doubt government will try to do that, they are also running out of options. Those are always temporary. Look what happened to the latest rate change.
- lotsofpulp 7y agoNot all governments are equal. The US has a lot more runway to devalue the USD than pretty much every other country.
- deleted 7y ago[deleted]
- generalpass 7y agoWhen financial bubbles burst the markets fall an average of something like 42% in the first two months.
- Grimm1 7y agoExcept I don't know if I'd classify this as a bubble bursting this is a true blue recession driven by the pandemic. The market reacting to information of weak fiscal measures against people not spending. A bubble would be something that was artificially propped like 2008 fraud with cdos this just seems like simple economics at play to me. That said I'm no where near close to informed or experienced enough on these things to say for certain.
- ahelwer 7y agoMarket movements follow a power law, not a normal distribution, so average is an utterly useless measure.
- generalpass 7y ago> a normal distribution Not really clear what you mean here. If you take the peak index value and its value two months into the bubble burst, the average value of this will be ~42% lower than the peak.
- ahelwer 7y agoRight, but what is the purpose of statistics like this? The purpose is for them to inform our understanding of what might happen in the future. As mentioned above, since market movements follow a power law rather than normal distribution, the average gives us absolutely no information about what might happen. Thus this statistic fails at the goal of having a purpose; it is just a meaningless number, like those meme baseball statistics about who is the third-best thrower of fastballs on a rainy friday or whatever.
- generalpass 7y ago
- manigandham 7y agoThere is more bad news to come. Infections in US and EU, supply chain issues, local business impacts and bankruptcies, repo markets, etc. Buy-the-dip and dollar-cost-average work but you don't need to go in blind. I advise waiting until there's actually repeat good news before you buy in.
- czbond 7y agoWhy would one buy the dip when momentum is heavy downside (long term)? April will most likely be a short slaughter, sure, but after that very unpredictable.
- manigandham 7y agoThat's what I'm saying. I see too many people get too mechanical about it when they would be better off making adjustments on significant news. If you don't see some sudden positive in the next quarter, there's no reason to buy in now.
- comicjk 7y agoThe market reacts to expected news, not just current news. The fact that bad news is coming might already be priced in. It's hard to say how bad a piece of news would have to be to make expectations worse.
- manigandham 7y agoThe market hates uncertainty the most and nothing about this pandemic or the economic impacts are certain. There is definitely no good news anytime soon for there to be a serious uptrend.
- jczhang 7y agoWhat about selling now in order to re-buy in over time?
- 7y ago
- deepGem 7y agoHere is my logic as a retail investor. The market has lost close to 20-30% from the peak. Will it regain the peak, for sure. By when ? Hard to predict. All I know is that the rate of climb need not be the same as the rate of the fall. This virus will bring about significant collateral damage to the global economy. Already airlines, cruises are hurt. Soon, tourism and hospitality industry will be hit. Transport and logistics will be next followed by retail. So the cascading collateral damage is quite unpredictable at this time. Double this with plunging oil prices. So unless you are willing to wait for 10+ years from now, it's unwise to invest a lump sum amount at once. If it were me, I will just invest small amounts periodically. Like every couple of weeks or so.
- Spacetoaster 7y agoThe argument could be made that if you do not have 10+ years to wait, you should not be investing large amounts in the stock market at any time. So now would probably even be a good time to do so, but of course, nobody knows.
- darkwater 7y agoThis is a mantra repeated by everyone in the field but what about if I have been in the stock market for 10+ years and I wanted to get out in the next month for my retirement? Sure, maybe I have gained something anyway but between this periodic crashes and the commission fees everybody applies looks likr the real winners are just the bankers
- bluGill 7y agoYou should have been buying bonds in larger amounts over the past years. Any target date retirement plan is doing that for you, because you are targeting a % of your portfolio in bonds/stocks you are probably buying more stocks than bonds now to get into balance. If you are self managed and haven't been doing that - well too bad, delay your retirement. Note that even if you are retired you should still have some stocks as a hedge against your retirement having more than a year left before you die.
- gringoDan 7y agoI wouldn't be surprised if we hit another circuit breaker by the end of the day. This will get worse before it gets better.
- hashberry 7y agoThe market has been overvalued and manipulated for years. Even Apple took out billions in loans for stock buybacks.[0] Boeing took out $43 billion in loans for stock buybacks[1] instead of investing in planes, QA and employees. Everyone knew this was a stock bubble caused by record low interest rates. COVID-19 is the pin that woke everyone up. [0] https://9to5mac.com/2019/09/05/apple-is-borrowing/ https://9to5mac.com/2019/09/05/apple-is-borrowing/ [1] https://wolfstreet.com/2020/03/11/boeing-crashes-as-43-billion-in-past-share-buybacks-turn-into-existential-threat/ https://wolfstreet.com/2020/03/11/boeing-crashes-as-43-billi...
- xiphias2 7y agoInterest rates are still low. This is not yet the financial crash and depression that will happen when the bond market pops. Still, it was the first time when lowering interest rates didn't have a huge effect on the market, so the signs are there.
- jjoonathan 7y agoWhat is the proposed mechanism for the bond market popping here?
- baq 7y agonot sure, banks suddenly getting flooded with formerly leased vehicles and stuff like that? banks can be bailed out though but supply chains can't.
- samvher 7y agoDisclaimer: not a specialist, this is what I gather from online research and discussions on reddit (please correct me if I get anything wrong!). The issue is with corporate debt. A lot of it is unsustainable in the event of an economic downturn [1]. Already people are leaving the junk bond market [2]. There is a risk that BBB-rated bonds will get downgraded, which would mean that pension funds can no longer keep them in their portfolio. If this happens, these bonds will move into the junk bond market, increasing supply in that market with already decreasing demand. That means that interest rates on lower-rated bonds will go up, meaning that it will become harder for companies that are not in a strong position to obtain credit, which they might need to if times get harder. Especially in a few sectors (tourism, shipping, oil) it's clear that companies are going to get hit this year. Central banks are aware that this is an issue and they are taking some steps to soften the blow. [1] https://www.theguardian.com/business/2019/oct/16/global-economy-faces-19tn-corporate-debt-timebomb-warns-imf https://www.theguardian.com/business/2019/oct/16/global-econ... [2] https://www.bloomberg.com/news/articles/2020-03-11/junk-investors-seen-pulling-cash-again-setting-fund-exit-record?srnd=markets-vp https://www.bloomberg.com/news/articles/2020-03-11/junk-inve...
- tosser0001 7y agoPeople are panic buying toilet paper for crying out loud. Unless you are planning on retiring in the next few years, you should be looking at this as the buying opportunity of a life time. This is at least the 4th panic sell off I've seen.
- beepboopbeep 7y agoYou first.
- ackbar03 7y agoYour next, I'll follow
- greenshackle2 7y agoThe toilet paper "panic buy" is overblown. People are stocking up extra on necessities, sure, but what's different about toilet paper is how bulky it is. I doubt most stores have large stocks to cover extra demand cause it takes up too much space. Hence it doesn't take very much extra demand to deplete shelves.
- ajross 7y agoMore charitably, a toilet paper run is a pleasing, simple, humorous and yet correct metaphor for general preparedness. People are buying cans too, but that's not as funny.
- greenshackle2 7y agoIt's not as dramatic to show a picture of a shelf of canned goods only half-stocked instead of fully stocked, as opposed to a an empty shelf of toilet paper. That's what I've seen at my local Costco. TP is gone, canned goods are running lower than usual but not actually out of stock.
- sdinsn 7y agoI agree with you, but I don't think this is "panic" selling. People are selling because this is causing a significant disruption to the global economy. Of course, still doesn't change the fact that everyone should be investing fairly normally. A chunk of my next paycheck is still going into the market, just like every other paycheck I've ever received.
- songzme 7y agoI have alot of unvested RSUs and my reasoning is that if 2008 repeats itself, there is a real chance I may get laid off and lose my RSUs. I donate most of my income and I have very little savings. To protect myself, when I see sharp dips in the markets like this, I usually buy a put (option) just in case 2008 repeats itself. I bought a put last week for 2k (CMG) and now its worth 18k. If the markets keep falling, I may end up with around 30k, which is enough for me to pay my mortgage for a year and a half. Maybe someone finds this helpful, maybe not. Be safe, play responsibly.
- zrail 7y agoHow do you buy a put option if you have zero savings and donate your income?
- songzme 7y agoupdated, sorry.
- VectorLock 7y agoAre rainy day funds not savings?
- texasbigdata 7y agoHe sells his virtue signaling
- czbond 7y agoSmart approach. Pay attention to unwind it before April please IF it is short duration. Mainly sharing since you state you donate your income (much applauded!). There will be a sharp short slaughter rally in April, but then dropping off a cliff.... (do own due diligence). If you have a put into summer you're fine.
- cadence- 7y agoAre you from the future?
- ackbar03 7y agoEcb is flooding market with money again. The dynamics of all this liquidity sloshing around is really hard to grasp. Sure everything is crashing around us but all that liquidity has to go somewhere, and since 08 it's basically just ballooned up the stock market and real estate. Where's the money sloshing off to next?
- Analemma_ 7y agoRight now? US treasuries. They’re paying below 0.5% for the first time ever.
- cletus 7y agoI'm going to recycle advice I gave earlier this week [1] and say it's way too premature to consider this a buying opportunity. Short term dips followed by recoveries are the hallmarks of a bull market. We're now clearly in bear market territory. In a bear market, you need to be wary of "dead cat bounces" ie a short term rally followed by a steeper decline. In 2008 this bear market lasted well over a year. If you're already in the market, well you're kind of stuck now. Who knows how much further it will fall or even if it will? If anyone knew that, they'd be rich. But this, as always, is a question of probabilities. In the short term there seems to be way more downside than upside potential. As much as it may have fallen in the last month, we're only now really getting back to the long term mean. Typically, during a market correction, the market oversells so further drops are entirely possible, even likely. Another 10-20% drop is (IMHO) completely realistic. [1]: https://news.ycombinator.com/item?id=22527631 https://news.ycombinator.com/item?id=22527631
- whatshisface 7y agoI don't think it makes sense for there to be such a thing as a bear market. If everybody knows that it's going to go down, then they will sell until the price drops to about the place where they expect it to eventually hit. That's what a crash is. The final price after the crash is the price at which the market is split between "it will go up" and "it will go down." If the bears and the bulls had any other proportion than 50/50 then the price would go up or down until the bears and bulls changed teams back to 50/50. The only thing that's guaranteed about stocks is that the average person is always uncertain.
- empath75 7y agoPeople don't know how far it's going to go down. We have no idea what kind of disruption is going to happen to global GDP. As the situation clarifies itself, it may very easily become worse, which would continue to drive it down.
- positr0n 7y agoWhat OP is saying is that the current price reflects the average investors best guess at how bad it's going to get. If some more people start thinking it's going to get worse they will sell and that statement will (essentially be) instantaneously true again.
- ansible 7y agoMy goodness. I transferred most of my retirement savings out of stocks in early March, realizing a 9% loss. The market had a little upswing that day, so that worked out as well as possible for me, considering. I was hearing advice from an acquaintance to just "ride it out".... yeah, no. After hearing about the inadequate testing and other half-measures taken by the Administration, I was convinced it would get much worse before it got better. I had thought about cashing out on January 31st, because I figured Brexit would trigger an Europe-wide recession, which would lead into a worldwide recession. But I didn't get around to that (lazy).
- chrstphrhrt 7y agoDoes this bode well for the private equity technology sector? Intuitively it would seem that people will be looking for different investment vehicles, and here we are in startup land already working remotely, ahead of the curve. Of course the risk is higher and it could be wishful thinking.
- jlei523 7y agoPrivate equity and public markets get money from the same source.
- jansan 7y agoGerman stock market suddenly fell another 3 percent within a few minutes. I wonder if that was triggered by the circuit breaker in the US with traders trying to sell on other market places.
- davidw 7y agoDeal with the pandemic. People won't invest again until they feel safe. That doesn't mean tax cuts or propping up shale oil companies. It means getting the deadly disease under some semblance of control.
- foogazi 7y agoYes WTF, this is not about interest rates, it’s about test kits for sick people, sick leave and pandemic risk
- marketfalls 7y agoPrecious metals like gold is also underperforming when it supposed to act as a safe haven
- ryanmercer 7y agoMy suspicion is this is a very small number of entities going "sell our bullion on paper so we can buy the dip", probably why bitcoin is down 25% and change last time I looked too. I've seen precious metals move a lot more than this for no apparent reason.
- deleted 7y ago[deleted]
- 8bitsrule 7y agoThat sudden slide to Biden looks like a big clue. "Turn those machines back on! Turn those machines back on!"
- shdh 7y agoBig clue for what?
- Leary 7y agoIf you want to be contrarian: DO the opposite of whatever the top comment here says
- misja111 7y agoThere is some deep truth in your comment, however simple it may seem. Joe Kennedy, a famous rich investor in the 1930's, exited the stock market in timely fashion after a shoeshine boy gave him some stock tips. He figured that when the shoeshine boys have tips, the market is too popular for its own good. In general the public consensus seems to be always one step behind after the developments on the stock market. It might actually make sense to do exactly the opposite of what everybody is advising.
- marktangotango 7y agoHa, I had a co-worker make the asinine comment that "real estate only goes up!" in about 2007. I sold my property a few months later. Great timing? Naw I put the profit into the stock market just in time for 2008!
- deleted 7y ago[deleted]
- rdslw 7y agoI'm downvoting you, to be able to follow your advice.
- KaoruAoiShiho 7y agoWho got puts? I think a lot of people called this yesterday.
- nostromo 7y agoWe’re tanking the world economy to try and stop the spread of a virus that cannot be stopped, and has a median death rate older than the expected life span. It’s so mild young people think they have the flu or a cold, and over 80% of people over 80 also recover. The economic outcomes of the interventions could end up being worse than the disease, as people will lose their jobs, houses, and healthcare.
- runawaybottle 7y agoIt’s hysteria without question. So what is the game plan for humanity? Tank the global economy every time a novel virus hits? We are only gonna get away with this hysteria once, it’s not something a society can tolerate. This has to become a ‘new normal’.
- yifanl 7y agoWhy do we compare covid with "just the flu" like that's supposed to make it seem benign? The flu is consistently among the leading cause of death annually, often higher than car accidents. Is it just that the flu is so commonplace that we've gotten numb to its impact?
- whatshisface 7y agoYou're missing a very important fact, which is that 15-20% of all ages need a hospital. Get ready for warehouses full of sick people like China had: and that was with a total social lockdown.
- wonderwonder 7y agoI went out to grab some food last night and while I was just standing there waiting to be served I looked around at people. Everyone is close, who know who is making the food. We are all going to get it, its just that simple. It will just go into circulation like the flu. We cant shut down society over this and live in hermetically sealed chambers. Schools are cancelled, offices are closed and people that work in any form of travel related industry are going to be unemployed with essentially no welfare net. It sucks but there really is not a long term alternative. Eventually we will have a yearly corona vaccine.
- seanhunter 7y agoFor people who think that this is just automatically a buy because "prices have to go back up again, right?", it's worth looking at the Nikkei[1]. Note the peak in 1989 has still not been regained, and the market is about half that level now. Now is the US economy fundamentally less messed-up than Japan? Absolutely (in general). But every fall is not necessarily a buying opportunity even if you have a very long-term horizon. [1] https://finance.yahoo.com/quote/%5EN225?p=^N225&.tsrc=fin-srch https://finance.yahoo.com/quote/%5EN225?p=^N225&.tsrc=fin-sr...
- xwdv 7y agoStop bringing this up, it’s been debunked that this isn’t an accurate example.
- freehunter 7y agoOne reason why it’s not a great example is the exchange rate of the currency. The Yen is worth about double now what it was in 1989.
- 2bitencryption 7y agois there a way to see the graph in more-familiar USD? I'd expect it to not appear as drastic?
- seanhunter 7y agoTotal return on the nikkei in dollars since 1974 is 3.6% annualised. So that's including exchange rate and dividends. That gets you to about double today in nominal terms what it was back then (yay compounding!) but is still a pretty terrible rate of return for having your capital tied up over a very long period of time.
- rv-de 7y agoExactly - if I had lots of money lying around I'd probably invest some of it now. But it's not worth the risk if one doesn't have sufficient cash for bridging at least an entire year. If it's just a dip - then I'll have to live with not making that money - whatever. But if it is the beginning of a recession then investing earlier than one year from now is financially inefficient. For now I'll stick to me regular investment strategy/cycle aiming at long term gains.
- petilon 7y agoI see only doom & gloom comments here. Did people miss this positive note: "On Thursday, China said it had just 15 new coronavirus cases and 11 deaths over the previous day." See: https://www.nytimes.com/2020/03/12/world/coronavirus-news.html https://www.nytimes.com/2020/03/12/world/coronavirus-news.ht... China has controlled the problem. By taking drastic measures the rest of the world will too. In a couple of months the virus will be under control. The stock market will not recover as quickly as it crashed, but it will recover! How do I know that? Because crashes have happened in the past, and the world didn't collapse and disappear. A single company can collapse and disappear but not the entire stock market. The only question is, how long will it take to recover. I think it will take 2 to 3 years. People who sold during the financial crisis of 2008 did not get to participate in the recovery that followed. There isn't an email or a notification that goes out when the market starts to recover. Attempting to time the market is futile. Staying out of the market will only mean that you will miss out on the largest portion of the recovery.
- kaiabwpdjqn 7y agoAnd what if China is wrong, lying, or only temporarily correct, causing the virus to resurface when society resumes?
- singularity2001 7y agoThen there are still some drugs in the pipeline which are proofen to be safe + helpful and only need official approval (if you trust China on that).
- helen___keller 7y ago> only temporarily correct FWIW this is not uncommon with pandemics. For example, WHO[0] says "During the post-peak period, pandemic disease levels in most countries with adequate surveillance will have dropped below peak observed levels. The post-peak period signifies that pandemic activity appears to be decreasing; however, it is uncertain if additional waves will occur and countries will need to be prepared for a second wave." For example, during the spanish flu, the second wave was far deadlier than the first. But there were additional factors (WWI and a mutation that made it more dangerous to the young). This can continue until enough of the population has been infected that we have herd immunity. This is why there's long-term estimates of 20-60% of population being infected[1][2] [0] http://www.euro.who.int/en/health-topics/communicable-diseases/influenza/data-and-statistics/pandemic-influenza/about-pandemic-phases http://www.euro.who.int/en/health-topics/communicable-diseas... [1] https://www.nytimes.com/2020/03/11/world/europe/coronavirus-merkel-germany.html https://www.nytimes.com/2020/03/11/world/europe/coronavirus-... [2] https://www.axios.com/congressional-physician-predicts-75-150-million-us-coronavirus-cases-fec69e77-1515-4fbc-8340-c53b65c22c53.html https://www.axios.com/congressional-physician-predicts-75-15...
- nimbius 7y agoSomething ive wondered about these 'circuit breaker' halts...do they actually work to prevent mass sell off or are they just prolonging the inevitable? Apparently not only can the powers that be halt trading momentarily, they can simply close the market altogether if trading is "bad" enough. How is that not manipulating the market? Why shouldnt we all be able to sell? disclosure: Im firmly in the blue collar worker category. I dont own stocks.
- cthor 7y ago> How is that not manipulating the market? Nobody said it isn't. In fact, that's the whole point: manipulate people to chill out, take a few minutes to think, and then get back to it.
- nimbius 7y agoso isnt it bad to manipulate a free market? I know China gets beaten up about it all the time.
- sp332 7y agoStock exchanges are heavily regulated. That's why trades can be made so quickly.
- thawaway1837 7y agoThe market exists through manipulation (regulation). There is no such thing as a free market that erupts spontaneously. Despite the rhetoric from certain circles, “free” markets are actually highly managed and regulated entities. There’s a reason why places with the best (largely defined as consistent) regulations, and greatest stability are also financial centres. If markets erupted without any regulatory framework then their quality would be highly correlated with the level of anarchy in a place. Whereas the reality is almost the opposite.
- SpicyLemonZest 7y agoWhen knowledgeable people talk about "market manipulation", they're generally talking about secret market manipulation, fiddling with the market structure in private to extract value from it. Wash trading is a good explanatory example; you're tricking people into thinking market volume is higher than it actually is, to get them to do things they wouldn't do if they knew the real story. Setting clear rules known in advance is "manipulation" by some definitions, but it's not really the same thing. There are some people who beat up China for simply setting rules in the market, and they're definitely wrong to do so, although you shouldn't confuse this with people saying the specific rules China sets are bad.
- wycy 7y agoCan anyone say why gold (GLD) is dropping so much too? I would've thought it would be a rough inverse of the market. It's still up over the last month (just barely), but down over the past several days.
- pja 7y agoThe impact of the Coronavirus epidemic means that many companies & individuals can see that they’re going to have a short term cash squeeze this year - they have interest payments due & the income to pay it isn’t going to be there. So they’re selling anything that can be sold to raise the cash to make those interest payments - in a strongly deflationary environment you’d expect $/£/€ to rise against everything, including gold and bitcoin, which is exactly what’s happening.
- Thriptic 7y agoPeople are getting caught in a liquidity crisis, which is one thing that happened during 2008 too (albeit in a slightly different way). They don't have enough cash for basic use and are being forced to sell whatever they have to meet obligations.
- Cthulhu_ 7y agoI suspect (but I'm far from an expert) that a lot of market products are traded together, automatically by computer systems. Invest in everything, sell and buy a bit of everything at the same time. Why do various cryptos seem to follow each other (roughly) up and downwards?
- whb07 7y agoLet's say you've been buying gold since its been at $1300/oz (or even before that), at what point do you tell yourself the moment is right to start selling in order to buy things for cheap? The point of gold is to have buying power in times where very few have any of it. So liquidate some gold and start buying healthy companies for the cheap.
- deleted 7y ago[deleted]
- s9w 7y agoWhen's the lowest point? I did some rough fits with some stupidly simply logistic function: http://s9w.io/corona_2020-03-12.png http://s9w.io/corona_2020-03-12.png US point of highest increase according to this is in "2.6" days with a standard deviation of 0.76.
- nojvek 7y agoI very much feel this could be another recession albeit a small one. It has very cascading effects throughout the world. Making everyone stay at home is effectively halting the world economy. I still have a decent amount in my 401k and stocks, sold 70% of them incase shit hits the wall (I quit my job earlier this year to be an indie hacker) Plus the upcoming election usually slows things down. So my prediction is until 2021 we’re deffo in for a ride.