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Q4 this year and Q1 next year just have to be bloodbaths this year - but then again, I'm literally always wrong about this stuff. It really seems like I should

by AJRF 6y ago

Q4 this year and Q1 next year just have to be bloodbaths this year - but then again, I'm literally always wrong about this stuff. It really seems like I should be right. I say this because I think now that callbacks are starting slowly and lots of offices have said Sept - Oct time will when they 'open the office' again properly - the redundancies will be made before then - then belts tighten, budgets get slashed, spending goes way down due to layoffs - and then Q4 and following quarters will be abysmal. I should probably buy calls on the S&P to be at record highs by year end instead though because we live in clown world now.

deleted 6y ago
[deleted]
ianai 6y ago
We live in weird times. I too am shocked and constantly shown wrong by the SP50 rising while many millions file unemployment. I’ve read that part of the rise is from the Fed lower rates to 0. It essentially pushed banks to buy into the market for their only sources of interest. I know from the past that company stock usually rises after they announce reorganization. Investors may be seeing opportunities for profit down the road from more optimized org charts following the mass unemployment. I do believe Dr Fauci and other medical researchers comparing this to 1918. If past is precedent we will see a far worse outbreak and economic fallout in the fall and winter then we did this spring. If the valuation decrease were over pessimistic this time around then next time may be more muted. If the decrease prove to have been over optimistic then expect further devaluations next time. Both of those assuming rational actors and reactions, neither of which assured. I also think we haven’t seen the full fallout from even the spring yet. I think we won’t know until the end of august how all of the unemployment affected rent and mortgage payments during the spring outbreak. We also don’t know whether the protests are going to spark super spreader events. That could necessitate closing the economy yet again and sooner. On the other side, we don’t have a monthly stimulus or cancelled obligations-those could have up or down impacts respectfully. I see a lot of really grave uncertainty in the future right now. The pandemic is a very real thing. The protests are too. The political desires to stimulate the economy despite any other affects is perhaps greater still. So I think there’s lots of noise and uncertainty here-which makes for volatility in valuations. Edit-I also just want to point out that the 1920s were marked by more than just Black Friday in October(date?). I’d suggest we all go back and refresh on how things played out back then to compare to today.
- formerchamp 6y ago
  Dr Fauci needs get on TV like before and compel the protesters to only 10 looters at a time.
nimaco 6y ago
>but then again, I'm literally always wrong about this stuff. Feel that. Story of every smart person who thinks the market should act logically
- ericmcer 6y ago
  Assuming there are a bunch of institutional trading bots using machine learning, they are gonna learn to fleece retail investors. With that in mind it kinda makes sense that the market would often behave opposite to expectations.
sudo-i 6y ago
Not sure why this is surprising as most people who are out of work don't have any equity in the stock market. I think it's more a reflection of income inequality and the concentration of capital. There is a huge disconnect indeed.
- mandelbrotwurst 6y ago
  Yeah, completely agree - I was thinking about this when this rally first started after the steep drops, at which time there was a narrative on the financial news that things were less bad because there were less outflows from retail investors than in previous downturns. One commentator was arguing that this is because the public had finally learned the errors of their ways in attempting to time the market. While I suppose it's possible that there may be some effect like this, I'm a bit suspicious of the idea that the outlook and risk tolerance of the typical retail investor could change that significantly. It definitely left me wondering to what extent capital invested in the equity markets has continued to move away from being held by those who are likeliest to be out of work right now.

by AJRF 6y ago

deleted 6y ago

[deleted]

ianai 6y ago

We live in weird times. I too am shocked and constantly shown wrong by the SP50 rising while many millions file unemployment. I’ve read that part of the rise is from the Fed lower rates to 0. It essentially pushed banks to buy into the market for their only sources of interest. I know from the past that company stock usually rises after they announce reorganization. Investors may be seeing opportunities for profit down the road from more optimized org charts following the mass unemployment. I do believe Dr Fauci and other medical researchers comparing this to 1918. If past is precedent we will see a far worse outbreak and economic fallout in the fall and winter then we did this spring. If the valuation decrease were over pessimistic this time around then next time may be more muted. If the decrease prove to have been over optimistic then expect further devaluations next time. Both of those assuming rational actors and reactions, neither of which assured. I also think we haven’t seen the full fallout from even the spring yet. I think we won’t know until the end of august how all of the unemployment affected rent and mortgage payments during the spring outbreak. We also don’t know whether the protests are going to spark super spreader events. That could necessitate closing the economy yet again and sooner. On the other side, we don’t have a monthly stimulus or cancelled obligations-those could have up or down impacts respectfully. I see a lot of really grave uncertainty in the future right now. The pandemic is a very real thing. The protests are too. The political desires to stimulate the economy despite any other affects is perhaps greater still. So I think there’s lots of noise and uncertainty here-which makes for volatility in valuations. Edit-I also just want to point out that the 1920s were marked by more than just Black Friday in October(date?). I’d suggest we all go back and refresh on how things played out back then to compare to today.

formerchamp 6y ago
Dr Fauci needs get on TV like before and compel the protesters to only 10 looters at a time.

nimaco 6y ago

>but then again, I'm literally always wrong about this stuff. Feel that. Story of every smart person who thinks the market should act logically

ericmcer 6y ago
Assuming there are a bunch of institutional trading bots using machine learning, they are gonna learn to fleece retail investors. With that in mind it kinda makes sense that the market would often behave opposite to expectations.

sudo-i 6y ago

Not sure why this is surprising as most people who are out of work don't have any equity in the stock market. I think it's more a reflection of income inequality and the concentration of capital. There is a huge disconnect indeed.

mandelbrotwurst 6y ago
Yeah, completely agree - I was thinking about this when this rally first started after the steep drops, at which time there was a narrative on the financial news that things were less bad because there were less outflows from retail investors than in previous downturns. One commentator was arguing that this is because the public had finally learned the errors of their ways in attempting to time the market. While I suppose it's possible that there may be some effect like this, I'm a bit suspicious of the idea that the outlook and risk tolerance of the typical retail investor could change that significantly. It definitely left me wondering to what extent capital invested in the equity markets has continued to move away from being held by those who are likeliest to be out of work right now.