Stock Downturn
I write this post today because I have noticed something interesting over the past few weeks concerning people's expectations and hopes for the stock market. I may be wrong, but it almost seems like people are hoping for the markets to crash and "retest the lows" again.... Whenever I read WSJ, Bloomberg, listen to CNBC, etc. and especially the comments on these articles it seems like people are almost disappointed that the market isn't continuing its downturn. Furthermore, the authors of these articles write with such glee and excitement that things have temporarily turned south.- I understand that the media business attempts to stir anxiety and keep you reading and watching for hours- but it's just disappointing that we've come to this concerning our markets.
Like I get it that a lot of folks have short positions, but it's so obvious that they are just salivating at the hope of the market dropping further. It's very un-American, and I hope people have more faith in our country and the federal agencies that have been doing an amazing job at supporting the economy through this economic "suppression"- not a recession. American institutions are as strong as ever, and a few months of closing up shop (due to orders by the government mind you) will not lead to the next great depression, especially when the federal government has been the most proactive it's ever been.
Anyway, that's my rant for the day- do you guys sense the same sentiment that I do out there, or am I just picking up the wrong messages?
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Sounds like your blaming them for talking about things you don’t like....that would happen even if they didn’t talk about them
I'm not sure how you arrive at that conclusion. I was just pointing out that it's unfortunate to see so many stories writing about "how the market doesn't make sense... etc" or the "market doesn't reflect the current state of the economy". I know journalism is a field in which a degree is conferred upon presentation of a pulse, but still, it's sad to see that they don't recognize that the stock market is where it's at due to many rational observations (such as long only bias in mutual/pension/endowment funds, bond yields being incredibly low, and many more reasons that push equities higher). With that being said, I can overlook a journalists inability to discern these market observations, but what's truly disappointing is that they are evidently upset about these circumstances, and their writing suggests that they WANT to see the market crash, and WANT to see a massive recession. I know the political persuasion of most journalists, so I understand the underlying motivations for their articles- it's just plain sad though and unfortunate that we have come to this in society where the media cannot be relied upon for fair/accurate reporting. Oh well, at least I know I can make rational decisions (and I've made plenty of money in this market due to that)
Someone needs to watch some Ray Dalio, with specific attention to the idea of 75 year realignment
i agree with this 100%. great post, thankful that someone has the same view that I have on all of this. very strange that people almost want the stock market to do bad.
I don’t think that we are sad that the market isn’t in a downturn, I think we are shocked. Corona virus is crushing the economy in a variety of ways leading to the first ever recession where people are told to not work. next, the oil industry is fucked. and while all of this is happening, we are seeing crazy jumps in the market. seems like a double dip recession may be coming
The wonder of the markets is that there are two sides to every trade, and I will happily take the opposite side of that in a particular security (so long as its undervalued at the current level). I don't play the market to turn a quick profit for tomorrow/next week and neither do mutual funds/ pension funds / endowment funds. Big money and the Fed combined will steamroll any short against this market- good luck!
The "media" has a great point here - it seems like the stock market is becoming increasingly out of touch with economic reality. Is the Fed's burgeoning balance sheet and repo intervention a sign of strong American institutions or a temporary inflating of the stock market that will ultimately fail to support the economy?
I understand your point about being unpatriotic, but I think these concerns are well-founded. After months of shutdown and millions of jobs lost, US companies are only worth 16% less than their previous all-time highs? I'll take the opposite side of that bet any day.
Haha your bet to take man, so far anyone shorting the market has been steamrolled to the point of margin calls (for levered positions) and some funds when bust. The media is just stirring panic and trying to make this whole situation look as bad as possible (for reasons unrelated to the economy). You should also pay close attention to the companies within the S&P- and how the S&P is constructed and weighted. Theres a bias towards the larger players that will do absolutely fine when this blows over in a few months due to massive balance sheets. Some players have been hit extremely hard (hotel REITs, some banks, airlines, oil companies, etc.) but ultimately the large firms in those industries will also do fine- do you think its the end of Citibank? Again, big money is in it for the long haul and they have a long-ONLY bias.
The media is stirring panic? This is an unprecedented situation of complete economic shut down (look at record economic data, i.e. claims). Sure, this is a recession induced by natural disaster but that does not mean we're in for a V-shaped recovery. States are reopening faster than consumers are ready to return to normalcy, but the economy-driving states (NY, CA) will wait much longer to reopen. Months of discretionary spending evaporated from the economy will not reappear when states reopen.
Why are you so ardently defending American corporations? It's ludicrous that you believe in these valuations.
Are shorts getting steamrolled? Not me. I got short last week after a sustained 20+% rally. Believe me - the market will fall again, Uncle Sam.
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