hard to say, but i think things are just getting started. Restaurants starting to go out of business now(really sad, I’m trying to buy to go more to support local ones). And all other sector will follow, all the chain reaction from shutdown. will see…
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It’ll bottom when you realize you know jack diddley. Can’t make sense of it, can’t rationalize it, can’t measure it, after you have thrown in the towel and so has everyone else. Pure psychology.
Hanera and Jil threw in the towel. Too bad WQJ isn’t around to throw in the towel too.
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difficult to time the bottom. And once things go south, growth stock is hard to predict growth.
We’re already starting to give up the morning bounce. Trump is speaking at 3PM eastern. I think that’s a mistake to speak while the market is still open after the reaction to his last speech.
Economic structure is still intact. I hear no news of underlying economic problem gone out of control. Only the perishable income (like hotels, airlines, entertainment etc). Schools and work places taking extra precaution considering the litigious society we are living in.
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For bold high-lighted, we may not have exact impact details (as we believe others analysis), but companies like Barkley, JP Morgan, Morgan Stanley and Goldman will have their own Research & Analysis, reports would have been already in place before bringing down the market. It is their confidential data collection and company IP. They pay hefty sums on those analysts to produce reliable report.
No one will share or produce such data/report to public like us.
Take an example, most of the companies started working from home, Google, Facebook…etc. Entire restaurant industry getting affected. My friend has a restaurant which normally gets around 500 people per day visits, now gets mere 25 people.
Airlines are already running with low profit margin. With more ban international travel and businesses are cutting local travel (except sales & Marketing ), most of them lay off and some file bankruptcy.
Biggest consumer of oil are USA & China, both are reducing consumption. In addition, price wars and heavy debt in oil business results lay off and bankruptcy.
All themes parks, las vegas kind of gathering going out of business.
If this continues another 2 months, with no cure to corona virus, they will wind up and get out, results auto-lay off. This is what going to happen.
Until someone says Cure or possible containment medicine in place to avoid spreading, schools, colleges, work-environment and businesses are not going to improve, stocks are hard to stop falling.
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jil knows his shit , let me know when you start investing, i’ll follow you. I’m holding ALL cash for a while now.
I commented that structure of the economy is intact. It is true that people are spending less for the reasons listed. The two do not contradict each other.
A few min later: Stock market is not economy. Stock market aggregate price can be thought of as a price someone is willing to pay for the american business participating in stock market. Some one low balling does not mean you have a bad product.
If I guess, market will halt temporarily after reaching SPY 230 or 200 range, then dead cat bounce during next quarterly results cycle - Apr 15th to Jun 15th, and then go down again to deep bottom.
My case is different, hard to decide, but waiting for some more time within 2-3 months. The best is to follow years 2007-2009 UPs and DOWNs.
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Tesla almost got halved from the high reached just a couple weeks ago: 969 → 507.
We don’t need vaccines for markets to bottom. Otherwise we are in deep shit as vaccines take at least a year to roll out. We need visibility to the problem and a credible path to deal with it. Right now we don’t even know how bad the problem really is given how bad the federal government has fumbled the testing. Uncertainty is much more lethal to the market than a known problem, no matter how big it is.
With 911 we didn’t need to wipe out all the terrorists for market to rebound. I still believe the current situation has most similarities with the 911 attack.
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And also we need to cut down on mindless hysteria. If it was really a virus that has been multiplying geometrically and killing people left and right, the world population would have fallen by quarter or half by this time. I am not hearing something like this.
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First hit is stock market,
then recession declaration, Real impact to business revenues/profits.
Mass lay offs, this is the key
Jobloss Impact to consumer biggest ticket items, Real estate
Jobloss Impact to consumer second biggest ticket item, CARs (TSLA is here)
Jobloss impact third in line, all credit facilities default.
Jobloss introduces rest of all expense control by people.
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I still think GDP will be at least -5% for Q1. A lot of hourly workers are without wages and those people usually have little to no savings. A month of missed wages will put them into a huge hole that’ll take them years to payoff. It’ll lower their spending for years. Also, don’t forget oil.
I think there’s real bankruptcy risk for airlines, cruise ships, restaurants, shale oil companies, etc.
Moments like are why financing a company via equity is way better than debt. Debt financing can kill you if it comes due during an irrational moment.
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Airlines have habit of going bankrupt in situation like these due to higher fixed cost of running an airline business. Most of the time airline bankruptcy means relief from creditors for some time.
How do you feel currently? 1% or 5% or 10%, what do you hear?
From whom you are expecting to hear? Who will inform you?
I hear people dying but in hundreds or thousands. Not like entire city has been wiped off.
The information flow through various channels. Some time it is from a paid journalist, and sometime from an individual wanting to share news of the community. Despite censors and restrictions, news have a way of coming out in open.
VIX is staying above 70. The crazy thing is utilities have gotten crushed. That tells you it’s people blindly selling everything. Utilities should perform well due to high dividend yields and falling interest rates. People not traveling shouldn’t impact them either. Maybe some offices turn down the heat without worked in them, but their revenue should be pretty protected.
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People are low balling a perfect product (US stock market) . That is how I see it. It is easier to be afraid and panic than to hold strong and be positive.
The damage to economy will be greater than the damages from the virus. I remember the 2008 crisis when many old people lost their life savings. Now they face a 3% chance of dying plus loosing 50% of their stocks. Many will never recover. I lost 50% of my net worth by 2012.
I had plenty of risky investments and too much leverage. This time I am better positioned and a have relatively small stock portfolio. But everyone will get hurt if we have a major recession.
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It is quite possible everything you fear or experienced in 2008 downturn will happen. But, at this point, I do not see any fundamental issue with US economy, other than this corona-virus shock that will knock off a few points off GDP. At least that is how I am feeling today.
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