4 ms·
It’s supposed to be forward looking, yes, but I’d argue if it is at 2019 levels that it’s basically pricing in a full V shaped recovery. Nothing indicates to me
by tempsy 7y ago
It’s supposed to be forward looking, yes, but I’d argue if it is at 2019 levels that it’s basically pricing in a full V shaped recovery. Nothing indicates to me that unemployment and consumer demand will just revert back to historical lows and highs as soon as a lockdown is lifted and we return to some level of normalcy.
- SpicyLemonZest 7y agoIt's possible the market's wrong, and if it is then some investors will end up losing money. That doesn't seem terrible - they won't be in a worse spot than if the market were already lower today.
- AbrahamParangi 7y agoA lot of commentary is missing that if you believe the Fed and Treasury will put a price floor on the market, for instances by providing liquidity to buy equities or even directly buying equities as proposed- then the EV (your expectation of future values) is heavily skewed upwards. By analogy, the expectation of location for a random walk which has a floor at 0 is strictly positive and increases monotonically.