Stock market crash

[LevelUP]

So my brother, who is a total whiz in math, algorithms, economics etc, sent me an email today that he got out of the stock market altogether. He sold everything today and will watch the coming carnage unfold from the sidelines. He said that this is the big one, the crash that will lead to a 50-70% evaporation of the US markets in the next 1-2 years, coupled with high unemployment rate and everything that follows. So I am passing it on. Don't say you weren't warned.

There is always a reason for the markets to go down and always a reason for it to go up.  Long-term the end result is you will miss out if you are out of the markets. 

My own prediction is that when new cases start to drop in the U.S. and around the world, the markets will a strong positive reaction.

We already know the virus is 100% containable shown by China, Tawain & Singapore either with aggressive testing or quartine.  Just a matter of when the effort to contain the virus exceeds the virus's ability to spread.

Our grandparents had to go off to battle to fight wars, our job here is just to #StayTFHome

Article on 15 minute testing already being done in China, Italy, South Korea, Japan, and other countries. 
https://www.dailymail.co.uk/news/article...OT-UK.html

[videogamesrock]

Q1 GDP on pace for a 3.1% expansion. Jobs report 100k over expectations. Wages rising another 3%. This is 100% hysteria selling. I bought on the dips and shorted airlines. Dividends for many stocks now are near 10%. All wealth is created in downturns.


Sent from my iPhone using DegreeForum.net

[ARhead]

https://www.macrotrends.net/2324/sp-500-...chart-data

Here is an inflation adjusted S&P500 chart going back 100 years. As you can see, it is in fact NOT always a good time to invest. Had you invested in 1929, you would not have made your money back until the mid-eighties, but by that time you'd probably have no need for money. If the chart went back further it would show the same would be true if you invested in about 1900. Same could be true for mid-sixties to late eighties (even the depth of 2009) and my conservative expectation is the US indices revert to 2000 levels. Most people believe that stocks and real estate only go up as they've rode bond yields from mid-teens to now about to be 0%, over the last 35 years. Bond yields and stock prices hold an inverse relationship to each other. By some metrics the US is still in the greatest stock bubble in history (Buffett is holding record cash by a country mile). The economy was already on shaky ground and with this virus issue, we are almost 100% going into recession. Central banks caused this bubble and they will try to paper over the problem again by bailing out institutions that should not be bailed out, but when people switch from greed to fear, cheap debt cannot coax them to speculate. Especially now when rates were already at historic lows.
I was heavily long index put options and vix through mid-february to now. but sold my vix way too early...

[dfrecore]

https://www.macrotrends.net/2324/sp-500-...chart-data

Here is an inflation adjusted S&P500 chart going back 100 years. As you can see, it is in fact NOT always a good time to invest. Had you invested in 1929, you would not have made your money back until the mid-eighties, but by that time you'd probably have no need for money. If the chart went back further it would show the same would be true if you invested in about 1900. Same could be true for mid-sixties to late eighties (even the depth of 2009) and my conservative expectation is the US indices revert to 2000 levels. Most people believe that stocks and real estate only go up as they've rode bond yields from mid-teens to now about to be 0%, over the last 35 years. Bond yields and stock prices hold an inverse relationship to each other. By some metrics the US is still in the greatest stock bubble in history (Buffett is holding record cash by a country mile). The economy was already on shaky ground and with this virus issue, we are almost 100% going into recession. Central banks caused this bubble and they will try to paper over the problem again by bailing out institutions that should not be bailed out, but when people switch from greed to fear, cheap debt cannot coax them to speculate. Especially now when rates were already at historic lows.
I was heavily long index put options and vix through mid-february to now. but sold my vix way too early...

I would say that no one is suggesting you dump ALL of your money into the stock market on a single day - it's more about investing over the long haul, dollar-cost-averaging, that kind of thing.

You can't time it on the way up, or the way down.  Just invest for the rest of your life.

[mysonx3]

https://www.macrotrends.net/2324/sp-500-...chart-data

Here is an inflation adjusted S&P500 chart going back 100 years. As you can see, it is in fact NOT always a good time to invest. Had you invested in 1929, you would not have made your money back until the mid-eighties, but by that time you'd probably have no need for money. If the chart went back further it would show the same would be true if you invested in about 1900. Same could be true for mid-sixties to late eighties (even the depth of 2009) and my conservative expectation is the US indices revert to 2000 levels. Most people believe that stocks and real estate only go up as they've rode bond yields from mid-teens to now about to be 0%, over the last 35 years. Bond yields and stock prices hold an inverse relationship to each other. By some metrics the US is still in the greatest stock bubble in history (Buffett is holding record cash by a country mile). The economy was already on shaky ground and with this virus issue, we are almost 100% going into recession. Central banks caused this bubble and they will try to paper over the problem again by bailing out institutions that should not be bailed out, but when people switch from greed to fear, cheap debt cannot coax them to speculate. Especially now when rates were already at historic lows.
I was heavily long index put options and vix through mid-february to now. but sold my vix way too early...

The chart you linked to does not show that it took until the 80s for someone who invested in 1929 to make their money back. Not sure where you're seeing that. Additionally, you have to keep in mind that, because these are inflation-adjusted numbers, you aren't comparing apples to apples if you compare just starting dollars to ending dollars, because cash sitting in a savings account is also subject to inflation. So if, instead of investing in 1929, you stuck that money in a savings account, you'd have lost a whole ton of purchasing power during the same time period.

[dfrecore]

https://www.macrotrends.net/2324/sp-500-...chart-data

Here is an inflation adjusted S&P500 chart going back 100 years. As you can see, it is in fact NOT always a good time to invest. Had you invested in 1929, you would not have made your money back until the mid-eighties, but by that time you'd probably have no need for money. If the chart went back further it would show the same would be true if you invested in about 1900. Same could be true for mid-sixties to late eighties (even the depth of 2009) and my conservative expectation is the US indices revert to 2000 levels. Most people believe that stocks and real estate only go up as they've rode bond yields from mid-teens to now about to be 0%, over the last 35 years. Bond yields and stock prices hold an inverse relationship to each other. By some metrics the US is still in the greatest stock bubble in history (Buffett is holding record cash by a country mile). The economy was already on shaky ground and with this virus issue, we are almost 100% going into recession. Central banks caused this bubble and they will try to paper over the problem again by bailing out institutions that should not be bailed out, but when people switch from greed to fear, cheap debt cannot coax them to speculate. Especially now when rates were already at historic lows.
I was heavily long index put options and vix through mid-february to now. but sold my vix way too early...

The chart you linked to does not show that it took until the 80s for someone who invested in 1929 to make their money back. Not sure where you're seeing that. Additionally, you have to keep in mind that, because these are inflation-adjusted numbers, you aren't comparing apples to apples if you compare just starting dollars to ending dollars, because cash sitting in a savings account is also subject to inflation. So if, instead of investing in 1929, you stuck that money in a savings account, you'd have lost a whole ton of purchasing power during the same time period.

I agree, it shows that the S&P was back to the 1929 high around 1959.  If someone dumped every penny into the stock marketing at the high in 1929, then I guess they'd have a long wait until it was worth that amount again.  BUT, it doesn't take into account someone who was buying all along, and continued to buy through the downturn in the 1930's.

BTW - if you'd have invested in May 1932, at the very low, then you'd have made money the next day, and you'd always be in the black going forward until today.  So there's really only a very small scenario of someone who would have to wait 30 years to make their money back, while there are tons more scenarios where they make money immediately, or only have to wait a few years to make back their investment.

Again, this all assumes you're putting all of your money in on a single day, when the vast majority of people aren't doing this, and never were.

[jsd]

In other words, it's not about timing the market, it's about time in market.

[ARhead]

This is how I make my money, I haven't had a job in many years. You have all helped me incredibly, I just wanted to help in the only way I know how. I know no one will listen. I repeat, I know no one will listen. The most important thing is if you make the decision to stick with the market, you don't bail at the lows, which is what most mom and pop market participants do. We are already in recession. If you are happy at S&P 1200 that is all that matters. This game is all about the first out the door. We no longer live in a capitalist system, central banks will try to intervene in extreme ways, to the detriment of the average citizen, to help the rich. But as I said earlier, I don't think it will move the dial, when people switch from greed to fear, they are not inclined to speculate.

[changeyourmind90]

I normally don't listen to any doomsday prophesies, just in general.

If he turns out to be wrong, I'll have lost money that I can never recover by pulling out when it's going up...and if he turns out to be right, I'm diversified, I'm still putting money in for the next 25+ years, there is still other ways to make money during this time...there's not a lot of downside to continuing as I've been doing.  I'm going to guess others will feel the same.

Also, I'm not certain what he's saying really.  Is he saying it's going to go down, and never recover?  Because if that's the case, we'll have much bigger problems than our stock portfolios.  That will be the least of our concerns.

https://www.macrotrends.net/2324/sp-500-...chart-data

Here is an inflation adjusted S&P500 chart going back 100 years. As you can see, it is in fact NOT always a good time to invest. Had you invested in 1929, you would not have made your money back until the mid-eighties, but by that time you'd probably have no need for money. If the chart went back further it would show the same would be true if you invested in about 1900. Same could be true because when I decided to make the best essay on the course and to purchase research paper for mid-sixties to late eighties (even the depth of 2009) and my conservative expectation is the US indices revert to 2000 levels. Most people believe that stocks and real estate only go up as they've rode bond yields from mid-teens to now about to be 0%, over the last 35 years. Bond yields and stock prices hold an inverse relationship to each other. By some metrics the US is still in the greatest stock bubble in history (Buffett is holding record cash by a country mile). The economy was already on shaky ground and with this virus issue, we are almost 100% going into recession. Central banks caused this bubble and they will try to paper over the problem again by bailing out institutions that should not be bailed out, but when people switch from greed to fear, cheap debt cannot coax them to speculate. Especially now when rates were already at historic lows.
I was heavily long index put options and vix through mid-february to now. but sold my vix way too early...

The chart you linked to does not show that it took until the 80s for someone who invested in 1929 to make their money back. Not sure where you're seeing that. Additionally, you have to keep in mind that, because these are inflation-adjusted numbers, you aren't comparing apples to apples if you compare just starting dollars to ending dollars, because cash sitting in a savings account is also subject to inflation. So if, instead of investing in 1929, you stuck that money in a savings account, you'd have lost a whole ton of purchasing power during the same time period.

I agree, it shows that the S&P was back to the 1929 high around 1959.  If someone dumped every penny into the stock marketing at the high in 1929, then I guess they'd have a long wait until it was worth that amount again.  BUT, it doesn't take into account someone who was buying all along, and continued to buy through the downturn in the 1930's.

BTW - if you'd have invested in May 1932, at the very low, then you'd have made money the next day, and you'd always be in the black going forward until today.  So there's really only a very small scenario of someone who would have to wait 30 years to make their money back, while there are tons more scenarios where they make money immediately, or only have to wait a few years to make back their investment.

Again, this all assumes you're putting all of your money in on a single day, when the vast majority of people aren't doing this, and never were.

Don't you think so now it's better to keep calm and wait for more bear trend?