The market is less informed about the news of the current situation than anyone paying attention to the coronavirus thread here. We know what’s going to happen in the near term with a reasonable level of certainty.
Yeah that’s my concern - that there will be a second wave of panic when hospitals get overrun.
That’s not really how markets work. If we know, then the market knows.
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Bingo. About 3 weeks out is my best guess. I hedged 401k by buying spy puts in my Roth. I went way low. Buying strikes 2, 3, and 4 months out between 1,900 and 1,600. I can take a good amount of pain but it’s nice to know I have some level of protection. I bought last Monday at the end of day on the bounce. The most I paid was .27 a contract. Bet pennies to win dillars.
Sure the super smart guys. But the buy and hold Trumpkins may panic at some point when they realize it’s not a hoax. Also a bunch of really rich people are in the cult and may be a bit delusional.
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Yeah, this. If the DJIA opens up with a 1000 pt drop tomorrow you can still get out with a 17% loss from the peak. If you think that’s pricing in a confirmed global pandemic that’s just getting started in the US, go ahead and buy/hold I guess.
I’ve always believe that (for my entire investing life of 25+ years) until the market inexplicably continued moving to all time highs despite what was going on in China. It was very obvious to me and others that were openly discussing this that a correction was coming. I moved to 50:50 because of this in mid Feb and posted in this forum that I did it before the crash even happened. Maybe I just got lucky this time but it sure seemed obvious.
Well as I’m sure you’re aware, that’s exactly what the overwhelming evidence shows.
Congrats on being right this time. Variance FTW.
The market is 70% institutions
Maybe, but when you can point to the exact reason you think it’s going to crash… I mean China shut down their manufacturing for 6+ weeks and the world economy is dependent on Chinese manufacturing. It wasn’t like I was reading tea leaves or pointing out triple dipple double cross bongo patterns in the technical charts.
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And a third when defaults on corporate debt spike. Interest rate cuts, tax cuts, and deficit spending could help recover from that more quickly, but oops, we blew our load on those juicing the S&P to 3400.
We knew in early February. We have an entire thread on it, the market has consistently been a week or two behind pricing in what we know.
Ok. So that’s 30% individuals.
The years is 2030. 99% of the worlds population has died from coronavirus. A group of survivors has clustered around Wall Street, chanting the ancient mantras, “buy the dip” and “the market knows.”
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What if I told you there was a way to weigh possible outcomes based on their probabilities to assign an explicit number to, I dunno, let’s call it their expected value?
I think BOTH SIDES have a point. Timing the market is not a great idea but also the people running the market are frankly not smarter than most of us. The reason timing the market is bad is that the game is rigged via monetary/fiscal stimulus to heavily favor going long and market has inside info (which I don’t think really applies here). But they are running out of ways to stimulate, and think we would need a crash before they start pulling out the bigger guns.
S&P 500 futures halted. I didn’t even know futures trading could be halted.
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And what if I told you that’s quite literally what timing the market is and there are boatloads of evidence that it can’t be done reliably. Being right this one time doesn’t mean anything.
I used to think this, but the last ~month has been pretty hard to comprehend in that context. Like you had virologists and data scientists looking at this stuff telling us how bad the coronavirus was likely to be, you had massive disruptions to the Chinese economy that were public knowledge, and the markets were just humming along mostly ignoring it all. I guess the argument is they’re pricing in upside we don’t see, but there are plenty of reasons lots of investors would panic and pull out, and it seems like a certainty at this point that we see a global recession.
Going to be blood in the street this week
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Sure, it’s not trivial. I’m just saying don’t expect the whole market to act like the retail market.