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The S&P500 index is about 20% off the highs. The NASDAQ index is ~35% off. And some big tech names are down 70% or more (Teledoc, Zoom, …). The stock market is

The S&P500 index is about 20% off the highs. The NASDAQ index is ~35% off. And some big tech names are down 70% or more (Teledoc, Zoom, …). The stock market is doing alright. Some investors are getting destroyed. And some new investors are receiving a very useful, very painful lesson. (Full disclosure: I’m mainly a buy and hold index investor)

marcinzm 4y ago
>And some big tech names are down 70% or more (Teledoc, Zoom, …). Zoom is still 80% higher than it was at the start of 2020.
- mgfist 4y ago
  But also like 4x revenue since then (or around there)
lamontcg 4y ago
We're not even really feeling any real economic pain right now. Still waiting for the first month of negative employment numbers. That is when things are likely to start getting interesting. Right now we're still in the warm-up act.
- selectodude 4y ago
  Ironically, I think a lot of that is, to an extent, priced in to the markets.
  - lamontcg 4y ago
    I don't think we're remotely pricing in something like commercial real estate detonating in the financial markets yet.
    - prasadjoglekar 4y ago
      Or, job losses/layoffs followed by foreclosures in the residential market that's already priced absurdly high.
      - lamontcg 4y ago
        Against a backdrop of a Republican party in a do-nothing congress which has been preaching against bailouts for 14 years with a Democratic president that they'd like nothing better than to hang an economic collapse on. We're still only just starting to pop the popcorn here.
    - pdxandi 4y ago
      What do you mean by commercial real estate detonating?
    - supernovae 4y ago
      What's the concern with commercial real estate?
      - rsync 4y ago
        Commercial real estate is going to take a 30 or 40 or 50% haircut due to work from home policies and related cultural changes. Loans will default and we (taxpayers) will need to bail out the banks. It’s not obvious yet because commercial leases are long and take time to wind down… and building owners are still making payments. We are in the phase where the coyote has run off the cliff and is still hanging in mid air … soon it will plummet.
        supernovae 4y ago
        I'm not seeing that trend. We haven't even seen down side in pricing or a full downaward trend in in new construction and most of the modern developments are doing mixed developments of retail, business and living spaces. There were a few % points drop at times - but most of that was supply dynamics and supply pricing. so much demand for commercial real estate that prices are up 24% It's probably a good thing for the market to cool
- mym1990 4y ago
  Not sure who 'we' in this situation is, but there are certainly a good portion of lower and middle class people feeling the economic pain through rising cost of every day items. My outlook is that we will eventually see this result in a drop in discretionary spending and that is probably when we might expect to see wide spread layoffs or upticks in unemployment.
  - supernovae 4y ago
    These groups of people already have a negative discretionary spending capability, they're not going to swing the markets. The markets don't even really jive with working class/normal citizens anyway. I don't see any areas of the economy where there will be wide spread layoffs besides crypto markets and even then, those people will be swallowed up elsehwere.
  - lamontcg 4y ago
    a $100/month "tax" due to things like high food and gas prices is actually small compared to unemployment. oil was over $100/bbl from roughly 2010 through 2014 but the economy kept on going just fine. if people have jobs and have some discretionary income they can ride out the pain of higher prices through deferring spending. the middle class certainly can do this. its the people who are quite literally paycheck to paycheck who fall behind and wind up making poor choices like payday loans who are really going to be feeling substantial pain right now. and i don't want to sound like i'm entirely discounting that, but crank unemployment up to 10% and it is going to be those people who wind up even worse off and possibly unemployed and homeless. it can get a whole lot worse for everyone right now. and yeah, the already comfortable people still feel pretty comfortable at this point and aren't feeling a lot of pain, other than maybe the family has to stick with old iphones this year or something. the economy is objectively much worse when those people are losing their jobs and houses than when they're not. which does not deny the existence of people at the margins of the current economy that are being more severely hurt by prices.
    - mym1990 4y ago
      While oil might have hit 100/bbl, gas price still only hit 4$ very briefly and the impact of higher prices was generally limited to that sector. Today we are seeing higher prices across the board. Depending on what stat you look at, the % of people living paycheck to paycheck is actually pretty large, and only getting larger as prices go up, especially in rent/homeownership space. But...the labor market is showing some great resiliency, so if that initial domino never falls, we might be able to skirt through with minimal damage by keeping confidence high.
- rsync 4y ago
  I’m not sure negative employment numbers will have the effect you think they will… I remember a time in the late 90s when “bad news was good news” - which is to say, bad economic news portends looser monetary policy… which has been the driver of higher equity prices. Not saying it will work that way but …
  - creakingstairs 4y ago
    That was before the wonders of ~ modern monetary theory ~ though. It’s already so loose I’m not sure what can the government do to combat what’s coming.

marcinzm 4y ago

>And some big tech names are down 70% or more (Teledoc, Zoom, …). Zoom is still 80% higher than it was at the start of 2020.

mgfist 4y ago
But also like 4x revenue since then (or around there)

lamontcg 4y ago

We're not even really feeling any real economic pain right now. Still waiting for the first month of negative employment numbers. That is when things are likely to start getting interesting. Right now we're still in the warm-up act.

selectodude 4y ago
Ironically, I think a lot of that is, to an extent, priced in to the markets.
- lamontcg 4y ago
  I don't think we're remotely pricing in something like commercial real estate detonating in the financial markets yet.
  - prasadjoglekar 4y ago
    Or, job losses/layoffs followed by foreclosures in the residential market that's already priced absurdly high.
    - lamontcg 4y ago
      Against a backdrop of a Republican party in a do-nothing congress which has been preaching against bailouts for 14 years with a Democratic president that they'd like nothing better than to hang an economic collapse on. We're still only just starting to pop the popcorn here.
  - pdxandi 4y ago
    What do you mean by commercial real estate detonating?
  - supernovae 4y ago
    What's the concern with commercial real estate?
    - rsync 4y ago
      Commercial real estate is going to take a 30 or 40 or 50% haircut due to work from home policies and related cultural changes. Loans will default and we (taxpayers) will need to bail out the banks. It’s not obvious yet because commercial leases are long and take time to wind down… and building owners are still making payments. We are in the phase where the coyote has run off the cliff and is still hanging in mid air … soon it will plummet.
      - supernovae 4y ago
        I'm not seeing that trend. We haven't even seen down side in pricing or a full downaward trend in in new construction and most of the modern developments are doing mixed developments of retail, business and living spaces. There were a few % points drop at times - but most of that was supply dynamics and supply pricing. so much demand for commercial real estate that prices are up 24% It's probably a good thing for the market to cool
mym1990 4y ago
Not sure who 'we' in this situation is, but there are certainly a good portion of lower and middle class people feeling the economic pain through rising cost of every day items. My outlook is that we will eventually see this result in a drop in discretionary spending and that is probably when we might expect to see wide spread layoffs or upticks in unemployment.
- supernovae 4y ago
  These groups of people already have a negative discretionary spending capability, they're not going to swing the markets. The markets don't even really jive with working class/normal citizens anyway. I don't see any areas of the economy where there will be wide spread layoffs besides crypto markets and even then, those people will be swallowed up elsehwere.
- lamontcg 4y ago
  a $100/month "tax" due to things like high food and gas prices is actually small compared to unemployment. oil was over $100/bbl from roughly 2010 through 2014 but the economy kept on going just fine. if people have jobs and have some discretionary income they can ride out the pain of higher prices through deferring spending. the middle class certainly can do this. its the people who are quite literally paycheck to paycheck who fall behind and wind up making poor choices like payday loans who are really going to be feeling substantial pain right now. and i don't want to sound like i'm entirely discounting that, but crank unemployment up to 10% and it is going to be those people who wind up even worse off and possibly unemployed and homeless. it can get a whole lot worse for everyone right now. and yeah, the already comfortable people still feel pretty comfortable at this point and aren't feeling a lot of pain, other than maybe the family has to stick with old iphones this year or something. the economy is objectively much worse when those people are losing their jobs and houses than when they're not. which does not deny the existence of people at the margins of the current economy that are being more severely hurt by prices.
  - mym1990 4y ago
    While oil might have hit 100/bbl, gas price still only hit 4$ very briefly and the impact of higher prices was generally limited to that sector. Today we are seeing higher prices across the board. Depending on what stat you look at, the % of people living paycheck to paycheck is actually pretty large, and only getting larger as prices go up, especially in rent/homeownership space. But...the labor market is showing some great resiliency, so if that initial domino never falls, we might be able to skirt through with minimal damage by keeping confidence high.
rsync 4y ago
I’m not sure negative employment numbers will have the effect you think they will… I remember a time in the late 90s when “bad news was good news” - which is to say, bad economic news portends looser monetary policy… which has been the driver of higher equity prices. Not saying it will work that way but …
- creakingstairs 4y ago
  That was before the wonders of ~ modern monetary theory ~ though. It’s already so loose I’m not sure what can the government do to combat what’s coming.