Markets looking like recovery?
- Thread starter DirectorGunner
- Start date
Hopefully, all depends on Covid treatments and how quickly people get their jobs back. The Fed has done a great job injecting liquidity to the markets.
Its called a bear market rally. They are usually swift, massive percentage gains, then fail.
Not saying that history repeats, but here is an example with the Dow in 2008.
An almost 20% drop, then a massive rally to regain 50% of that loss...
And then lets zoom out a bit:
And longer term
Not saying that history repeats, but here is an example with the Dow in 2008.
An almost 20% drop, then a massive rally to regain 50% of that loss...
And then lets zoom out a bit:
And longer term
The difference this time, compared to the 2008 finacial crisis when we had a $800B bailout, is that now we have a $2T bailout.
Is that enough to juice a rapid recovery and set the floor already?
Or is it, more to my thinking, that there are longer term ramification of thousands of small businesses that do not get bailed out and a depression hitting us which should lead to more downside in the markets.
Is that enough to juice a rapid recovery and set the floor already?
Or is it, more to my thinking, that there are longer term ramification of thousands of small businesses that do not get bailed out and a depression hitting us which should lead to more downside in the markets.
Fed and government acted quicker this time. Also helped banks are more capitalized now versus 2008. Add in the economy was doing well before and "maybe" recovery is quick.
But unemployment didn't go from 3% to 20% in 2008. So, we will see.
But unemployment didn't go from 3% to 20% in 2008. So, we will see.
Radegast74
Space Marshal
The term I heard used recently was "bull trap" i.e., raise the price a little to get people buying, then sell all your stuff...Its called a bear market rally. They are usually swift, massive percentage gains, then fail.
Not saying that history repeats, but here is an example with the Dow in 2008.
An almost 20% drop, then a massive rally to regain 50% of that loss...
And then lets zoom out a bit:
And longer term
Honestly, I've never seen the market more disconnected from reality than it is right now. We have huge amounts of damage and disruption, will likely take at least 6-9 months to recover from the immediate aftermath, who knows how long to fully recover regard jobs, supply chains, cash flow...
There is a bit of difference between these two instances. the 2008 bailout was specific because they knew exactly where the damage was done, many people on the inside knew it was going to happen before it did. This was much quicker and unexpected, I am afraid this time its so wide spread and like you said with so many smaller businesses affected many are closed or closing right now, who knows if a bailout by the time it gets there will bring them back or if they even want to struggle bringing them back.
No one really knows how bad it will get, but if anyone thinks Mr Douchebag in the White House is going to snap his fingers and make it all ok, they need a reality check.
One other thing is this is not limited to one country. The one area I am curious about is how much of the economy is based upon services and not the generation of wealth. And how the continued social distancing will continue to disrupt the services industry as well as the lack of economic surplus.
Recent headline from China said 240,000 small businesses claimed bankruptcy due to the virus.
Its probably going to be worse in the States.
I'm just looking at my savings account and the money sitting there is doing absolutely fuck all cause interest rates have tanked. Anywhere else I can plunk it? That's relatively safe in these times of uncertainty? Index Funds?
The whole reason the markets have been soaring for the last decade is that interest rates are so bad, there is nowhere left to go except equities.
Like I said above, I can't tell you that the markets are heading higher from here for good, but I do expect the economic ramifications to ripple through for some time and offer some better buying opportunities.
Index funds are easy, but you can get pretty much the same from ETF's, for example SPY gives you the S&P500.
QQQ is the NASDAQ, which is mostly tech heavy like Amazon, Apple, Netflix etc.
HYG is a high yield corporate bond ETF
GLD is gold.
The list goes on... but what I would do is invest in something you know. You say you are in the movie industry? Do you have friends at AMC?
Is AMC going to survive this? Look are your own industry, see what your contacts are saying about the companies they work at, dig down and see if there is an opportunity.
I used AMC as an example because it went from $20 to $2 and there are concerns about bankruptcy.
That is going to be very interesting to watch play out.
I was just mentioning AMC which I think is a great example of the fallout we will see.
Before a vaccine is widespread, how eager are you to go to a cinema and have some guy coughing and wheezing two rows behind you?
Will anybody be attending a packed theater for a movie release in the next year?
SoloFlyer
Grand Admiral
I kinda wish we still had a lot of drive in theaters around, scarce now
Yeah I don't know much about the cinema companies to be honest. I know a bit more about the studios and production companies. I think the bigger boys like Disney will pull through. Streaming services will definitely do well.
I was looking at Netflix for awhile (Their share price dipped on March 13th to $298 and is at $370) today. Missed the boat there. :(
J/K
It's really interesting to see the similarities and to read your takes on the situation!
I was really surprised to see how well Disney is doing, especially at the start of all this. Even though they dipped, they came back pretty fast and strong, despite 2-3 years worth of movies being pulled, postponed, or otherwise hanging in the air. Also Disney+ wasn't looking like something that would work out as well as it did for them.
Lost some change by betting the wrong way on them, thankfully I was pretty lucky with Tesla's daily crazy dance, so it didn't hurt that much.
As for predictions, it's worrying to see that there is past evidence as shown by our glorious leader @Montoya for what my gut tells me about all going down hill again soon, as reality catches up to the rally. It's not just the US that has millions laid off, factories standing still, and so on. It's a global event that will have lasting effects everywhere. This won't be over in just 2 weeks, or 2 months even.
Disclaimer: when it comes to money, I'm an absolute idiot. Do not under any circumstances take into account what I say
I trash Disney all the time but they've treating me well. The last show before I was working on was a Disney show. They shut us down but as a parting gift cut me a check that's the equivalent of 2 weeks of pay as a hardship assistance. Of course Netflix had to shame the rest of the industry to follow suit since they were the first ones to do it but I'll take it. Anyway we've been assured we'll go straight back to work once the social distancing measures are lifted so that's encouraging.
I think their Theme parks will take a hit but the film/TV production side will still do well. Disney+ has also done well, they've actually gained a lot more subscribers during this whole shutdown stay at home business.
I also think people forget that we are still today seeing ripples that have not stopped since 9/11, the thousands of mass shootings since the late 90s and now this, a Pandemic that showed how critically unready and unwilling to prepare for future events this country is, who would have thought in 2020 the U.S. would be struck worse than other countries like China, Italy, Russia etc.... 20 years ago I never would have imagined this country had gotten so cocky, so spoiled and so disconnected that we would be sitting here with the highest gun deaths, horrible healthcare system and now pandemic numbers that are worse than Europe, Asia and Middle East...
I don't know what has happened to this country, but its a sad reflection of what it was 30 years ago.
I don't know what has happened to this country, but its a sad reflection of what it was 30 years ago.
Sounds like those who have become the best at winning elections have not spent that time and effort becoming the best at running countries.
And I mean that not only for the US.
"Preserve freedom, it's perishable".
That just popped into my head when I read your post. It's from a bumper sticker dating from the 80's and 90's.