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Dow Falls 2997 points worst drop since 1987 crash
- skrowl 7y agoThis probably isn't the bottom. Wait a little while longer and when things start picking back up, dump in as much as you can afford.
- klodolph 7y agoGood advice! Just time the market.
- deleted 7y ago[deleted]
- agumonkey 7y agoI'd rather die of self inflicted bankruptcy ! -- ex trader 2021
- hirundo 7y agoI wouldn't care to risk retirement funds until the scope of the virus is better defined.
- mdanger007 7y agothe investor who buys in just before a vaccine is announced will make some scratch
- djannzjkzxn 7y agoI don’t think it’s possible to tell the difference between volatility and things picking back up. Somebody trying to follow this advice might have bought on Friday when the market went up.
- tathougies 7y agoThe market is likely to go much higher than friday in the coming decades.
- deleted 7y ago[deleted]
- djannzjkzxn 7y agoI agree completely. My advice to anyone who isn’t employed as a stock trader is to buy when you have investable cash. In particular my comment was disagreeing with the advice to “wait a little while longer.”
- tathougies 7y agoYes... people should buy while the market is falling. You can't time the bottom. You can observe the fall though.
- deleted 7y ago[deleted]
- zenlot 7y agoWorst advice ever. Do not try to buy the dip in this market. Most likely it will lead to loosing money.
- foobarian 7y agoYou only lose money if you sell :-)
- Matheus28 7y agoDon't forget the opportunity cost of waiting 5 years for your investment to go back to net 0 :)
- VikingCoder 7y agoOr if your asset gets delisted. Or if there is no list.
- pengaru 7y agoIt can't possible be worse than advice to buy at the start of this covid-19 disaster. I feel for those stuck holding this particular bag of shit. Fortunately I pulled out after the last TSLA earnings call, and look forward to the future shopping spree once the dust settles.
- UncleMeat 7y agoBuying when it is low is not as good as buying when it is lower. But it is still good. Buying today is much much better than buying a month ago. Or six months ago. Was it a bad idea to buy then?
- dllthomas 7y agoIt's clearly better advice than dumping in more than you can afford? ¯\_(ツ)_/¯
- usaar333 7y agoIt probably isn't the bottom. That doesn't mean expectation is optimized by waiting.
- alkonaut 7y agoTiming the market is possible if you know more than the market otherwise it’s just gambling. But what do you do if you got lucky selling now? I sold three weeks ago figuring it would be bumpy ahead, but I don’t want to miss the bottom entirely. Now I’m thinking the low risk strategy is to buy very slowly over a long period.
- jacquesm 7y agoThat's pretty bad advice.
- Rapzid 7y agoI'm going to trickle cash in to total market index funds each week going forward. I'll just keep adding on the way down.
- anonu 7y agoWorst drop ever for the Nasdaq Index today: -12%. These aren't 1, 2 or 3 standard-deviation events... these are more like 6 or 7 standard-deviations from the mean...
- whatshisface 7y agoThat's not so impossible for the stock market whose distribution has a big, long negative tail. (If you plot the daily delta of the logarithm of the S&P you will see that it looks like a normal distribution, except with a fat long tail of very bad days.) It goes up little by little except on the days it goes down by a lot.
- marcinjachymiak 7y agoIf you're experiencing 6 sigma events daily, your modelling is wrong.
- hn_throwaway_99 7y agoIt's "wrong" because the stock market doesn't follow a normal distribution but instead a power law.
- usaar333 7y agoVix is currently at 82%, rather than a more typical 15%. You should expect daily fluctuations of 5 to 6x what is ordinary for the next month. In fact today's drop is only about 1 standard deviation.
- raincom 7y agoVIX was suppressed so long through shorting VIX futures via ETNs like $XIV, $SVXY up until Feb 5, 2018. Then the latter ETNs blew up. Lots of people made money just buying these ETNs. This was one way VIX was suppressed.
- amiga_500 7y agoI'm quite surprised by this because it was my understanding that companies were doing us a favor by employing most people. That they were forestalling replacing us with robots by paying us near subsistence wages. I'm very confused. On the one hand I have all the things I've been reading in the papers about workers being superfluous. But yet on the other hand when I just look at the evidence, it seems like companies really, really need workers. I wonder what will happen when this is over...
- mullingitover 7y agoConsumer spending is kind of the foundation of the economy, and as of today in the US it's about to go into freefall. Especially services. This fall is pricing in the inevitable waves of bankruptcies in the service industry.
- amiga_500 7y agoWhy don't the fed just print money, a program could order stuff on amazon and they could deliver it to a land fill (obviously the landfill would have to be automated by robots). for services they could just automate making bookings with a deposit and not show up. or a little zoomba vacuum thing could show up. wouldn't be inflationary as cash is being destroyed like mad as we are all replaced by robots, so that won't be a problem.
- xaxsacsdaffbnk 7y agoPeople lose business and need cash to get through the crisis.
- whatshisface 7y agoAll of the return-seeking money that pushed up asset prices in the first place is still out there, because stock market crashes don't destroy money (they just redistribute it). I wonder who has it now, and I also wonder when it will end up back in the market.
- btilly 7y ago...stock market crashes don't destroy money (they just redistribute it). Source needed. Stock market crashes absolutely destroy money by any reasonable definition of the money supply.
- ailideex 7y ago> Stock market crashes absolutely destroy money by any reasonable definition of the money supply. Mind sharing that definition? I don't see that quite squaring with this: https://en.wikipedia.org/wiki/Money_supply#Empirical_measures_in_the_United_States_Federal_Reserve_System https://en.wikipedia.org/wiki/Money_supply#Empirical_measure...
- acchow 7y agoWe’re destroying valuations, not money.
- archontes 7y agoI'm no expert, but I think I get what he said. If I have $100 and I buy a stock worth $90 from you, there's $100 in the economy. If the stock goes up to being worth $110, there's still $100 in the economy. If the stock goes bust, there's still... $100 in the economy.
- nodesocket 7y agoGreat point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their trades to bull. However, keep in mind, a market down 30% requires a 43% gain to break back even.
- mgolawala 7y agoTo 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 point. Let's hope we get through this with no more than that.
- badfrog 7y agoIf you think recession is guaranteed, why not sell?
- deleted 7y ago[deleted]
- Ensorceled 7y agoIf this drop is related to a panic sell off, then it's deeper drop than it needs to be. If you sell now, you might be selling in a panic low and locking in your losses. If. Make your own decisions.
- hitpointdrew 7y agoThat 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.
- badfrog 7y agoMy read of "I think a severe recession is all but guaranteed" was that OP thinks prices will continue to fall. Am I misinterpreting?
- mgolawala 7y agoFirst, 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 market timing. I am not very good at it, and I don't think most people are. You not only have to know when to sell, but you have to know when to buy back in. You have to get it right twice.
- magd 7y agoToo much winning!
- ghastmaster 7y agoHousing needs to follow. For people looking to get into the market like me, these prices are a barrier.
- tathougies 7y agoHousing is unlikely to follow unless more old people die of covid than expected. Rates are so low and big money will be looking to diversify into alternate asset classes.
- selectodude 7y agoA million dead, mostly elderly, is not completely out of the realm of possibility, especially if we hit the high end of 150 million infections in the US. Statistically, 150 million infections would kill closer to 4 million.
- btilly 7y agoYou really think that 50% of the population is the high end??? Per https://www.thelancet.com/journals/laninf/article/PIIS1473-3099(20)30144-4/fulltext https://www.thelancet.com/journals/laninf/article/PIIS1473-3... it seems that the basic reproduction number is over 2. Which means that herd immunity only sets in if under 1/3 of the population is vulnerable. Which means over 200 million Americans get it. The alternatives are permanent lifestyle changes, or a successful eradication of the disease worldwide.
- rnd33 7y agoThe number of confirmed cases in South Korea is flattening out at around 8,200 people out of a population of 52 million (0,016 %), China is flattening out at 81,000 cases (0,006 % of the whole population). Is it really reasonable to assume the number of infected people in the the US will be 3,000 to 8,000 times higher?? If these are the calculations Wall Street are doing then I'm not surprised the stock market is falling...
- tathougies 7y ago
- zizee 7y agoPSA: The Dow Jones industrial average is a terrible measure of the stock market. It tracks just 30 stocks, some which have an outsized influence on the measure. This is not to say the stock market is not in freefall, but there are much better indexes to track general market movement.
- bretpiatt 7y agoToday it correlated with the better indexes. DOW (-12.93%): [1] S&P 500 (-11.98%) https://finance.yahoo.com/quote/%5EGSPC?p=^GSPC https://finance.yahoo.com/quote/%5EGSPC?p=^GSPC [2] NASDAQ (-12.32%) https://finance.yahoo.com/quote/%5EIXIC?p=^IXIC https://finance.yahoo.com/quote/%5EIXIC?p=^IXIC [3] Russel 2000 (-14.27%) https://finance.yahoo.com/quote/%5ERUT?p=^RUT https://finance.yahoo.com/quote/%5ERUT?p=^RUT
- binarymax 7y agoAlso: NYSE Composite (-11.84%) https://finance.yahoo.com/quote/%5ENYA?p=^NYA&.tsrc=fin-srch https://finance.yahoo.com/quote/%5ENYA?p=^NYA&.tsrc=fin-srch
- mdgrech23 7y agoI wouldn't say it's terrible but if you're looking for a quick way to assess the market there are better options such as the Wilshire 5000 index. That being said that's crashing too so it doesn't really matter. The market is crashing folks, thats the reality of the situation.
- legitster 7y agoThe main benefit is that it has been around a long time, so it's somewhat useful for broader historic trends.
- nabla9 7y agoMost of the SP500 movements come from small number of companies too. Dow Jones is bad index but the narrow number of companies is not the worst part. DJIA is price-weighted index which is completely arbitrary and there is no reason for that. They can't add Berkshire Hathaway into the index without completely changing the rules. BRK-A price is so high. Index would track only BRK-A after that.
- mrpickels 7y agoBanks are our friends, the government is like our dad, the media is like our mom, let's hug them and meet the brave new world!!!
- mrpickels 7y agoprobably the folks here don't understand sarcasm or you really guys love to pay taxes and scroll through your facebook news feed...
- testacct316 7y agoTrump threatened Powell's job in order to force him to reduce interest rate and start printing money [1]. Our economy is being micromanaged by Trump who is not an expert in monetory policy and only has disdain for experts of all kinds (virus/economy/climate). Trump says he is qualified to do that because his uncle went to MIT [2]. [1] https://www.nytimes.com/2020/03/14/business/economy/trump-powell-fed-chair.html https://www.nytimes.com/2020/03/14/business/economy/trump-po... [2] https://www.washingtonpost.com/outlook/2020/03/12/truth-about-trumps-uncle-what-it-means-his-presidency/ https://www.washingtonpost.com/outlook/2020/03/12/truth-abou...
- SirensOfTitan 7y agoI’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 these closures will cause. If most Americans truly cannot afford a $500 surprise bill, we’re in for a very, very rough ride.
- nostromo 7y agoThis is similar to 9/11 where politicians would act without thinking just to appear like they were doing something. Security theater was the norm for many years.
- anthm1988 7y agoBitter about human lives being prioritized over your stocks? Poor little psychos.
- quadrangle 7y agoI hope you're not saying that measures which actually achieve more social distancing is somehow theater.
- nostromo 7y agoIf our response has been commensurate with the threat or an overreaction is definitely an open question. One we probably won't be able to answer definitively for a while.
- yitianjian 7y agoI saw one really good comment - we'll know for sure if we under reacted, but we'll never know if we overreacted
- lettergram 7y agoJust my 2 cents - Take your assets out of the market. Until we (in the US) see a few senators, a justice or two and / or the VP/president/etc succumb to the disease we haven’t hit peak panic. ~50% of the workforce is about to be out of a job for a few weeks. A large portion of Restaurants are about to go bankrupt, daycares are about to go bankrupt. Houses are about to drop in price (no money, and elderly dying). The reality is, this could be worse than the Great Depression. At least if we keep this up for any length of time. What we are doing right now is seizing the economy and if we close down everything, it’s going to be hard to start back up. Governments are going to crumble because of this. Long term (a year out) things should be improving. But IMO we have a long way to fall. I wouldn’t be surprised if banks start folding.
- ScoutOrgo 7y agoBut if you sit on cash, you will miss the day where it has a huge gain due to some news like a vaccine announced.
- marcinjachymiak 7y agoMost of the people betting on this becoming a recession/depression think that the coronavirus is just the pin to pop the (ETF) bubble. Most of the companies that have announced that they're working on vaccines have pumped already, but feel free to invest.
- raincom 7y agoCoronavirus and oil crash are huge catalysts. A vaccine won’t help much, as investors become risk-averse. When majority of investors become risk-averse, risk premium goes high, thereby reducing stock prices.
- minwcnt5 7y agoTo me that's fine. The S&P 500 isn't going to instantly spike back up to 3000. There is real damage being done to corporate bottom lines. The negative growth experienced by companies during a recession compounds into all future earnings -- for the rest of time. So the way I look at it is that the market is pricing all future earnings of companies, and once the volatility has settled it will reach some new baseline that's much lower than the peak, and then continue to grow at a nominal rate, only forward-looking, with no memory of what just happened. It took 4 years for the S&P to reach its previous peak after it bottomed out in 2009. So if you've been holding onto cash, or sold near the 2020 peak, you probably have a lot of time to get back into the market and still end up better off than if you'd bought in a month ago. You don't need to time it perfectly. I can make a lot of money if I do time it correctly, but if I fail to I'm not going to count it a loss.
- jcranmer 7y agoBy percentage, this isn't just the worst drop since the 1987 crash--the 1987 drop is the only worse drop. This is worse than any day in the Great Depression.
- raincom 7y agoIf there were no circuit breakers, we would have witnessed drops worse than the 1987 drop. The 1987 crash brought forth circuit breakers, limit up/down in the futures markets.
- jusonchan 7y agoI'd say keep a close eye on the Coronavirus situation. If a vaccine is found and is effective, likely the market will calm down and hit the bottom. After that its about keeping the companies afloat until they can get their revenue back up again. Most likely the quantitative easing programs from the Fed will help in this regard.
- ailideex 7y ago> If a vaccine is found and is effective, likely the market will calm down and hit the bottom. Realistic timeline for this seems months.
- aazaa 7y ago> Our Advise: It is time to carefully pick up some stocks based on crushed valuations, but the market is not likely bottoming. It’s hard to say are we two weeks away or months away from market bottoming. You'll know it's time to buy when the advice you get from permabulls like the mortgage industry is to sell. What will happen in between? Failed rally after failed rally. Bear market rallies are extremely effective destroyers of capital. The suck the gullible in and spit out the bones. By the time it's really time to "pick up some stocks based on crushed valuations," nobody will care about stocks. And nobody will care about or believe the rally.
- legitster 7y agoI'm a bit more optimistic about this crash - a significant portion is due to the (important) constraints on society - closing schools and restaurants. Meaning we can look forward to some pent up demand on the other side when those constraints are loosened. On the other hand, if the US goes into lockdown for a month or more, there's a significant chance that we could be returning to a world very unlike today. The market does not like this kind of uncertainty, and an house of prevention would have been worth $10 trillion dollars of cure.
- mcphilip 7y agoI think there will be some pent up demand, but some parts of the economy don’t benefit from that —e.g. I’m not going to buy more lattes when things return to normal, I will just go back to my daily fix.
- r00fus 7y agoThat's not all - some will forego, lose the habit then not re-uptake. Also schools - how will additional schooling later on make up for the lost service & revenue (schools need students to get tax revenues)
- legitster 7y ago> That's not all - some will forego, lose the habit then not re-uptake. This is why I think the economy on the other side could look so radically different. What if every coffee shop and brewery went out of business... and had no reason to re-open? Could something completely different fill the void?
- koheripbal 7y ago...but you might buy a coffee machine at home to satisfy that fix over the next 3 months.
- gruez 7y agoA coffee machine's contribution to the economy is a fraction of one or two months of take-out coffee at a cafe/restaurant. If you factor in how much value is being generated in the US vs elsewhere (eg. China), the difference is even more pronounced.
- visualstudio 7y agoDumb question. Why can't they just turn off all stock markets for a month?
- dmitrygr 7y agoAnnouncing that will cause a panic the size of which you cannot imagine!
- Der_Einzige 7y agoThey may end up doing that to prevent a collapse. They also ban short selling sometimes even if the stock market is kept open.
- jacquesm 7y agoIt will just make things much worse. Without a liquid market for stocks, no matter how bad the whole economy would grind to a halt at some point. Though we're a long time away from the next IPO (by my guess) as long as there are buyers the market should stay open because that will allow a lot of entities to fulfill their obligations. If you close that avenue off there will be a severe knock-on effect from institutional investors that suddenly find themselves without liquidity. That's a scenario that I'd rather not contemplate. The 'no buyers' scenario in fact did play out two weeks ago, there were 1.8 million shares of Shell for sale on the Amsterdam exchange without buyers. Shares to be sold without reserve, and yet, no buyers. It took a long time to fill those orders and that's why Shell did not have a price on the board during that time. Never, ever, happened before.
- nodesocket 7y agoThat would cause severe pressure on other financial institutions and invoke immense panic.
- dougmwne 7y agoBut what if I need money for food and rent but my emergency fund runs out? If I own stock but cannot sell it that would be a bad thing, right?
- screye 7y agoI am not well versed in the economics of depressions, but almost all the ones I know of were preceded by some monetary imbalance or the explosion of a bubble based on falsely propped up ownings. 1929 was stock being leveraged off mortgaged homes and loans, that was clearly no sustainable. 2000 was the dot com burst. 2008 was mass defaults on home loans. Is there any reason why apart from slow business for 2 months due to corona and the oil war (that resulted from corona causing a loss in demand), the economy can't juts go back to being business as usual once this all passes over ? Is there a particular kind of asset, the collapse of which will seal this drop as a proper depression ?
- seanmcdirmid 7y agoMany people think the world is rife with real estate bubbles, definitely in china if you don’t think there is a big one in the USA. The stock market rose very quickly with respect to earnings as well, and we’ve had over a decade of very low interest rates world wide, leading to lots of debt both private and public.
- deleted 7y ago[deleted]
- koheripbal 7y agoBankruptcies can be pretty damaging. If we see a lot of loan defaults, we might see a banking crisis. ...but probably not. Banks are very well capitalized these days - much much better than 2008.
- Zenst 7y agoBanks 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.
- cycop 7y ago
- Der_Einzige 7y agoAll you gotta do is buy puts and you'll be able to ride a yacht in a few years when this is all over.
- appleflaxen 7y agoThis is only the first round. The second round will be over-leveraged investments being uncovered, as any leverage they had in stocks evaporates. Given that the over-leveraged loan situation was out of control during the 2008 GFC, and nothing structural was done to change behavior, it's extremely likely we're going to see some secondary changes.
- engineeringwoke 7y agoCorrect. Let's wait and see where the path of least resistance takes us. It goes somewhere from the commercial paper market to anyone levered, all the usual TBTF suspects.
- icedchai 7y agoI moved $100K to cash on Friday. I should've been more aggressive.
- deleted 7y ago[deleted]
- arthurcolle 7y agoSPY puts printed today. Up 110%, sold before Trump had his press conference. I think there's going to be a little bit of a bounce tomorrow and then resume drilling.
- synaesthesisx 7y agoAgreed. I had puts on TQQQ and also UVXY calls (yes, I play volatility like a madman). My last couple TQQQ puts sold today for....5100%
- arthurcolle 7y agoI'm "super" long vol now, have a limit buy for those hilarious 130 VIX calls. If meteor strike happens, I'll be in a good place. Costs like 160 bucks, hilarious way to hedge
- arthurcolle 7y agoI couldn't resist not getting more OTM SPY puts today, I totally think this will crater further short term once NFP get released
- vearwhershuh 7y agoThe 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 https://www.multpl.com/shiller-pe There are problems comparing the P/E over time periods this long, but it is a cautionary datapoint.
- akvadrako 7y agoYeah, when everything is a bubble it’s bound to pop sometime. Probably just too much free cash for banks.
- yurr 7y agoso ..... any thoughts on cryptos ??
- yurr 7y agoso ..... any thoughts on cryptocoins ??
- anonuser123456 7y agoSomething to consider for people thinking of jumping into the market via an index fund; in 2008, corporations were in OK shape to weather a downturn. In 2020, a lot of corps are very highly levreged. I think it's likely we'll see a lot of shareholder wipeouts. This will have an interesting effect if you buy an ETF. If 50% of your stocks get wiped out... that big bounce you might expect won't be in your portfolio. Yes, the index will recover it's value... but the composition of pre-post shareholders will be different. I don't think the country is in the mood for shareholders to get bailed out unless individuals get bailed out first... and I don't see that happening.
- whycombagator 7y agoAlso the worst % drop since 1987[0] [0] https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average#Largest_percentage_changes https://en.wikipedia.org/wiki/List_of_largest_daily_changes_...
- thinkloop 7y agoThe S&P 500 is down 30% since Coronavirus started [1], back to April 2017 levels [2], about three years worth of gains erased. But this comes after a decade-long record bull run that's been begging for a 15% correction. Treasury yields were inverted a few months ago, last week bond prices got disjointed from their underlying assets, QE has been incessant since 2008, rates are at literal zero - the bull market was fake, propped-up and political; there is nasty sausage festering in the belly of our financial system and it's set to explode. Get ready for at least another 30% drop. Or: The internet is truly the greatest invention of all time. There is nothing more valuable than the exchange of ideas. We have only begun reaping its rewards. It will be responsible for another 100 year bull run of greater magnitude than the industrial revolution. Not only is innovation at record levels, but the pace of increase of innovation is at record levels. The bull run was not fake, P/E levels of the S&P are in line with historical averages [3]. We are taking Coronavirus very seriously and China has shown that you can "flatten the curve" when you do [4]. This will blow over in a few months and the economy will be right back to where it was. But the stock market is forward-looking and can recover in an instant, the buying opportunities are now. [1] https://imgur.com/a/aq2yw70 https://imgur.com/a/aq2yw70 (chart) [2] https://imgur.com/a/EOWR4Kf https://imgur.com/a/EOWR4Kf (chart) [3] https://imgur.com/R0zpJiP https://imgur.com/R0zpJiP (chart) [4] https://imgur.com/VTMOeh9 https://imgur.com/VTMOeh9 (chart)
- bedhead 7y agoI 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
- riffic 7y ago> last rights rites
- mgolawala 7y agoSo Weird, reading your comment reminded me of how this is similar to how the immune system of an infected host can react with such ferocity that it kills the host. Like a Cytokine storm or a persistently high fever. Imagine if our reaction to this disease, to prevent human death and suffering... will cause so much poverty, hardship, and social instability that the outcome is more human death and suffering, than if we had just let the virus run its course and had just gone about our daily lives accepting the losses. I sure hope we are doing the right thing. Makes you wonder.
- fock 7y agopeople dying everywhere (which, with a hopeful 2% letality is still very likely) will also heavily disturb the peace as well as the economy. As long as we are not sure about basic things like that, I'm quite for a lockdown, because a 7% letality is still not off the table (with happy things like reinfection) - and this is basically about double the loss of life of WW2 (which at least had a clear winner, being able to play out its game). So: how are you sure that the parameters of the pandemic are something, the system can handle? Is there any precedent for that? What reason is there, that our society (that's the people, making up this system) can't overcome this crisis with something different?
- say_it_as_it_is 7y agoThis 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.
- tomp 7y agoSeriously?! "Quitting for new work" when in a week or so no companies will even be doing in-person interviews? This sounds just insane to me. "Quitting before you find a job" is bad advice even in very good economy.
- seanmcdirmid 7y agoThe boat on in person interviews sailed a couple of weeks ago.
- lgats 7y agoCertainly most will be better off being laid off (and eligible to collect unemployment in the US) vs quitting.
- alexandercrohde 7y agoMaybe 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.)
- skohan 7y agoIs there a risk of a compounding factor with the current level of corporate debt?
- raincom 7y agoYes, companies issued bonds to finance their buy backs. Best example is Boeing, which spent $58B in buy backs to parabolically pump its stock to $420. Today, Boeing lost its credit ratings, and is begging Washington for bailouts. Zero interest rates don't help much.
- CRUDite 7y agoWell, as someone who has traded alot, i did always wonder when the 2013 gap would be filled.. but at ~ 150 spy that is still far away.
- steve76 7y agoWork remotely. Everyone needs leads.
- throwaway713 7y agoSo I know it's almost impossible to predict the stock market, but... a lot of this crash seems to be based on panic and human psychology concerning the virus (I know there is some effect due to the oil price war though). My question is: if we assume 20-40% of people in the U.S. are drastically underestimating how bad the virus is going to be, then they are more likely to hold their stock until there is finally "proof" that the virus is as bad as everyone with some amount of scientific understanding knows it is going to be, at which point we would expect some portion of these people to panic sell. Wouldn't that indicate that in an event like this, we're not betting on essentially random fluctuations of an emergent economic system, but rather on many people not understanding the trajectory of the virus? In other words, it's almost like a prediction market at this point — you're betting against other people about how damaging the virus is going to end up being. Am I off base here?
- sgillen 7y agoI would argue that to some extent that’s how the stock market works all the time. You’re betting about how other people will react to information.
- dictatorsunion 7y agoI don't understand why people are catching a falling knife. It is as though they have never been in bear markets before. Understand the market psychology and don't waste your money. I have friends who DCA-ed and regret because it took them years just to breakeven. In a standard fear cycle (Google it), we are only at the middle stage between denial and fear. There is an acceleration downwards that we have not experienced yet (Crypto 2018 and China 2015 are good examples if you want to look back at recent history). Wait for that to happen first. You also can feel the time to buy when people are very distraught and demoralized by the endless drops. Twitter activity will change a lot, trust me. A good way to read when to buy is, aside from seeing that everyone is completely mentally exhausted and demoralized, is that the VIX is around 30% and dropping, and distribution is over with accumulation channels being formed, which is when multiple supports are being built. This is when bulls and bears are in equilibrium, with bears quite exhausted but still exuberant. If you want better certainty, at least wait for the stock you want to buy to cross the 200 SMA, because it is a good indicator that the stock is being rationally valued once again. My point is that DCA is only good if the trend favours it. It is central limit theorem where you reduce the variance by multiple sampling. Good shorters DCA downwards as well, so you are fighting these people too if you are DCA-ing now.
- coliveira 7y agoThe very fact that there are still so many people willing to "buy the dip" shows that we're just in the beginning of the process. There will be a time (a few weeks from now), when almost everyone will be screaming sell. This is just how ALL bear markets work.
- Swizec 7y ago> It is as though they have never been in bear markets before. We haven’t. It’s been 12 years since the last bear market. I was literally 20, in college, and with nothing to even think about investing. How many are too young to even remember 2008?
- dictatorsunion 7y agoThere are industry-based bear markets and bear markets in other countries almost every year. They all work the same.
- bubbleRefuge 7y agoI think as soon as there is some clarity around fiscal policy, we will see markets stabilize. Fiscal policy is coming, we just don't know the extent. So 2 or 3 months from now the virus will have burned out and we will have massive amounts of fiscal stimulus in the economy and the boom ensues. This is the way our Economy and stock market function. As soon as the stock market begins to see this, it will explode to the upside. That maybe in a week or a month or 2.
- Waterluvian 7y agoI have a "balanced" index fund with my retirement savings. I'm 33. I'm simply not touching a thing. I hope this is the correct move. It's amazing. I think I'm a pretty smart guy and I'm finding it very difficult not to second guess these choices. And the worst time to make choices like this is during financial crisis.
- veggieburglar 7y agoI’m in the exact same boat. I’ve never done so much reading and research to do nothing before.
- every 7y agoI'll just sit here on my municipal bonds, thanks...
- saiya-jin 7y agoSuper beginner question - as somebody holding some Swiss cash on top of some basic reserve, I understand now it would be too risky to enter any stock/other market. I am a pessimist in expectations what will happen - rather gloomy state of affairs for next year or so, no fancy vaccine/quick tests etc. Here is the question - what investment vehicle, if any, would you consider for looking into when wanting to presumably enter this situation in say 4-5 months? Ideally say some medium term returns, not benefit after 30 years. Sorry for possibly annoying question to the experts, just looking into some guidance
- sn41 7y agoIs there any estimate of how many years the recession is going to last?
- breatheoften 7y agoTo those that think the market response is likely to become predictable anytime soon — a thought experiment ... how do you think the markets will respond if Warren buffet dies of corona virus? Personally I think this kind of event could trigger a large change in the market (who knows why) and am curious what others think.
- atsushin 7y agoI've got some saving and am considering looking into trading if the market gets any worse than this. Do any of you have advice? I was doing some research into ETFs and was considering putting some money in that direction since it seems safer than buying individual stocks.