This is weird. Bet against the Dow at 22k a couple days ago and I’ll still probably wait it out until a little after Easter, but nothing makes sense. Just gonna quit trying to time anything and re-enter in a couple months and hold a decade+.
Still feel like the play is a freeroll though. Either we hold around 21-23k for awhile and not much is lost or we take another plunge. We’ll see.
BTC and ETH heading up all day as well.
The models got massively revised yesterday as far as peaks in the US. Looking less likely that NYC will run out of ventilators unless they get some kind of second wave. Louisiana also revised to the good.
I figured it would be a huge day. I’m surprised anyone on here is surprised tbh.
Long term though what does reopening look like no one has a clue. We need anitbody tests.
Sold my oil puts for a decent profit and went all in on spy 3x etf puts. Gamble gamble.
Right, I’m not sure the finance bros understand what they’re doing right now. Flattening the curve successfully, which it looks like NYC may have done at least to the extent of not running out of vents (or not running out for long), is not necessarily good for the economy.
I also think we’re a few days away from really knowing and would not be at all surprised if this was just a temporary gap in cases/reporting.
The number of 7.5%+ days is not large. Just insane volatility in the last month.
Agreed. Cases and deaths peaking right now means a lockdown is effective, which is very good news in terms of humanity but isn’t sufficient to sustain the economy. Look how stubborn the rates of cases and deaths are in Italy, France, and Spain–it takes weeks of lockdown to get them to stabilize and start to fall. Any reopening is going to be extremely slow in these situations.
I think the performance of the economy is going to be depend on two main factors:
My clients seem to be having a hell of a time. One has basically had all their projects canceled. One said they’re fighting for their life, cash-wise. Two others ended all construction initiatives, but they’re fine cash wise. And I work in construction for these folks–supposedly insulted from “short term” economic swings. These are all industrial enterprises.
(Sorry, somehow I posted this prematurely with a hotkey on accident!)
Nice teaser.
Stocks and bonds generally move in opposite directions. I.e., on a day when stocks are up you’ll usually find that bonds are down.
One thing I noticed during recent weeks is that this inverse correlation has been disrupted. I would check my phone and see that BND (a total bond market ETF) was moving in the same direction as the SP500. And this was happening a lot. I confirmed this by running some numbers and comparing to the previous 6 months. My stats is rusty but I think the general result is accurate.
Can anybody offer a theory about why, during the past few weeks of crisis and volatility, this would happen?
Theory: Corporate bond prices aren’t sensitive to normal swings in profit/loss but they are sensitive to existential crises.
I don’t know anything about ETFs, so you’d have to compare stocks to corporate, mortgage and govt debt separately.
Yeah I think it was Keed who reminded us at some point that Total Bond is like 30% corporate. But I wasn’t sure that could have a big enough impact to explain it. Separate analysis is a good idea.
I also wondered if maybe on really bad days the sheer panic was causing people to flee all investments and just hoard cash and guns.
The “flee all investments to hoard cash and and guns” thing did in fact happen.
Do the same analysis for SPY vs GOVT, LQD, and TLT and that will tell you if it’s just the corporate bond component that is throwing a wrench into things or if it’s something else weird going on.
Put in an offer on a home today. First time, so what a crazy experience. Intense. I went from excitement to terror to optimism to terror, a few times.
Everyone seems to have a different idea of what is going to happen with the market, and this seemed like a good opportunity so I decided to go for it. The house has been listed almost two months, had one price drop before the virus shut down real estate showings in NY. And the owners are anxious to sell.
I offered 10% below the asking, which would be 16% below the current appraised value. It’s an old farmhouse, built in 1832. Sits on six acres, with two barns and a tiny pond.
Pretty psyched at the idea … wait, now I’m terrified … fingers crossed. Seems like a thousand spots the deal could break down–assuming they even accept. But hey, whatever happens, good experience I think.
Oh, and now I’m poor again. Sweet!
I offered on a house today too.
Spoiler alert: every person getting paid when transactions happen thinks the market is great and will always be great
Good luck!
I always think of that scene from The Big Short. “The market is just in a tiny gully.”
Yep, I realized that a bit too late as a first time homebuyer in March 2008. Oops! Thankfully I held on and have significant equity due to a massive bounce back in this area.
Never forget perhaps the most obvious admission of agent bias ever:
Imagine a stock broker calling up a client excitedly and saying, “Yeah, I think there’s an amazing opportunity in Facebook right now. Either buying or selling, doesn’t matter really. Just as long as you’re transacting.”
Mortgage Douches!
You really didn’t have to go to all that just for research. Just send an email to someone off zillow in 2006 and boom - pre-approved for $600k with a chance for much more (at a higher rate of course). I think I had one phone conversation with her leading up to the approval.
The fact that I could actually prove my income was a big plus in my favor to keeping my rate low! The fact that I had no money for a down payment was NOT A PROBLEM.
Shout out Wells Fargo trying to include massive points in my mortgage until I complained. They’re basically the only jumbo lender still lending and likely to close, so it’s basically like dealing with the cable company.
Gonna needs some details here.
Don’t you negotiate points up front? So they bait and switched? Gave you a rate, didn’t mention points, and then tried to slip them in later?
