What's With All The Bears?

I can't help but notice that everyday I turn on social media or read comments on WSO, all I see are people speculating a market crash. It seems like they want the market to crash with how happily they talk about a bear market. What is wrong with these people? Did they short sell Tesla or something? I understand that PE values are high and we've had a great bull run the last 13 years, but why are people so negative? I know the market goes through cycles, but    even if the market "crashes" it will eventually recover just like every other recession. As long as you hold for the long term why are people so worried about a market correction? Am I the only one who is sick of the bears?

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Comments (17)

  • Intern in IB-M&A
Nov 19, 2021 - 9:04pm
:

What is wrong with these people? 

spy

In crypto, I'd say: "this shitcoin is gonna crash hard". But it's actually the S&P 500.

:

but even if the market "crashes" it will eventually recover just like every other recession

[laughs in Japanese]

Most Helpful
Nov 19, 2021 - 11:10pm

Your picture of the s&p500 is deceiving to people who don't know what it means. The market compounds as the value increases, so every time we're at all time highs the graphs will look much steeper than previous years, even if they returned the same percentage YOY. All this picture shows me is compounded growth. ie. I am pretty sure that after the 2008 crash stocks rallied over 40% in a single year, yet according to your graph thats just a small dent in the overall picture. And Japan is not even a comparison because they have many other issues at play that the USA doesn't have. 

If your main reason is technical analysis, then why even respond when I'm talking about long term investing not day trading?

Nov 22, 2021 - 12:33pm

USA is no longer in its golden age, just fyi. Japan is not the only country who never even nominally recovered, let alone adjusted for inflation. The European index was the same. 

In relative terms, usa is losing power. Nooone knows where the S&P will go in our lifetime, it would take a fool to believe that they really know what is going to happen.

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  • Analyst 1 in IB - Gen
Nov 19, 2021 - 10:10pm

They're salty because they missed out while everyone else around them with less credentials and experience got rich

  • Research Analyst in AM - Equities
Nov 19, 2021 - 10:19pm

Overvalued companies will get smashed that's for sure. Markets aren't going to crash, nonetheless. Bank of America published a survey of a variety of PMs being too optimistic about the outlook of American markets. At the same time Fidelity says we have more pension accounts worth +1mil than ever before. The base for booming markets is very strong and will continue to thrive. I'm hopeful

That said, companies that are obscenely overvalued will go down badly. The mechanisms by which this will happen vary tremendously. Eg keep the hype about tapering in mind. Tapering can induce analysts to adjust weights and allocations very quickly. Once the benchmarks rise, nearly all multiples will reflect this change and immediate actions will be taken, since the priority for money managers will become fixated on preserving this abundance of wealth. Furthermore for any sufficient raise in interest rates institutional money will remigrate to fixed income, which will be very interesting to see. Take a look at the Japanese yen 30yr swaps and see their fluctuations upwards relative to the past decades

This is a very simplistic way to put it. And there are more variables than interest rates. Remember before the pandemic CBs were conducting hawkish policy and we still had booming markets. Whatever happens next will be a continuation

Nov 22, 2021 - 5:52pm

Good point on institutional managers. Low rates are helping the markets in more ways than even some savy high finance people understand. I imagine that these excess flows will impact illiquid markets more than liquid markets, however.

Nov 22, 2021 - 2:34pm

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