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The stock market barely moved because every investor with a brain already knew that more people would be unemployed this week, 3 weeks ago.

koheripbal 6y ago
bingo. Stocks are forward looking - by 10 to 20 years, depending on the valuation model. The idea that companies should be worth half of what they were last year because of a 18-month long pandemic is kind of idiotic, which is why the liquidations in mid-march were a great buying opportunity. ...the only exception being companies that might be forced into bankruptcy - such as retail, restaurants, travel, etc. Tech (NASDAQ) has almost entirely recovered... which is reasonable. I think a lot of commentators are angry that many shareholders are not experiencing the same pain they are, and therefor attribute it to some sort of social evil. Misery loves company.
- Paradigma11 6y ago
  How come the stock market is not pricing in the catastrophic pandemic that will hit us 2039. Or the massive earthquake of 2027. That's just BS, you can make up any number on that timeframe.
  - RestlessMind 6y ago
    As an investor, I am obviously baking in those events in my decision making. I am also assuming an all-in-with-all-the-bazooka-firing response - Fed printing money, Congress enacting stimuli, smart people coming up with vaccines etc - which will recover the asset prices (at least in nominal terms) within 2-3 years.
- blaser-waffle 6y ago
  20 year forward looking? Maybe across the market and across broad indexes & ETFs, but there is no way you can tell me that they're looking that far ahead intelligently -- one only needs to look at 2008, or the huge volatility over the last couple months. Oil futures, for example, are only going out about 2-5 years. We knew there was going to be wicked unemployment down the line in Feb/March. Now it's here and no one is surprised -- and that was baked into the stock price, on top of Federal cash bailouts that make the unemployment numbers less relevant.
  - koheripbal 6y ago
    Oil futures go out to exactly the expiration date of the futures contract. Equity shares go out as far as you like. What makes the later years worth less is the discount you put on future cash - according to the time-value money principle. ie. future years are discounted proportionately dependent upon the expected inflation/discount rate. So yeah, 20 years is normal.

koheripbal 6y ago

bingo. Stocks are forward looking - by 10 to 20 years, depending on the valuation model. The idea that companies should be worth half of what they were last year because of a 18-month long pandemic is kind of idiotic, which is why the liquidations in mid-march were a great buying opportunity. ...the only exception being companies that might be forced into bankruptcy - such as retail, restaurants, travel, etc. Tech (NASDAQ) has almost entirely recovered... which is reasonable. I think a lot of commentators are angry that many shareholders are not experiencing the same pain they are, and therefor attribute it to some sort of social evil. Misery loves company.

Paradigma11 6y ago
How come the stock market is not pricing in the catastrophic pandemic that will hit us 2039. Or the massive earthquake of 2027. That's just BS, you can make up any number on that timeframe.
- RestlessMind 6y ago
  As an investor, I am obviously baking in those events in my decision making. I am also assuming an all-in-with-all-the-bazooka-firing response - Fed printing money, Congress enacting stimuli, smart people coming up with vaccines etc - which will recover the asset prices (at least in nominal terms) within 2-3 years.
blaser-waffle 6y ago
20 year forward looking? Maybe across the market and across broad indexes & ETFs, but there is no way you can tell me that they're looking that far ahead intelligently -- one only needs to look at 2008, or the huge volatility over the last couple months. Oil futures, for example, are only going out about 2-5 years. We knew there was going to be wicked unemployment down the line in Feb/March. Now it's here and no one is surprised -- and that was baked into the stock price, on top of Federal cash bailouts that make the unemployment numbers less relevant.
- koheripbal 6y ago
  Oil futures go out to exactly the expiration date of the futures contract. Equity shares go out as far as you like. What makes the later years worth less is the discount you put on future cash - according to the time-value money principle. ie. future years are discounted proportionately dependent upon the expected inflation/discount rate. So yeah, 20 years is normal.