Chill. It wasn't a lecture. What is forced load out?
Futures and various futures derivatives are not for the ill informed or home office google-fu investors. smhRetail investors who believed they were investing in crude oil get a rude awakening
"Know what you own" is an old adage when investing, but it is especially important when owning investments that hold futures contracts.www.cnbc.com
www.marketwatch.com
www.bbc.com
I think the skepticism of a V-shaped recovery (at least for the economy) is rising. The most shocking stat I saw was now the total job losses over the last 5 weeks equalled the total jobs gained since the last crisis. It seems a lot of those jobs were hourly workers and low-skilled positions. There are quite a few stories about small businesses applying for and receiving PPP loans and the employees being mad because they would have made more in unemployment. I guess those people didn't have the most fulfilling positions in terms of job satisfaction. We see the problems of a government response that is not well thought out and unintended consequences. PPP had hedge funds, venture capital startups, and even public corporations applying and receiving ten's of millions $. Expecting people to do what is morally right is apparently a fantasy. Now we have to wonder how do we get people back to work? Do wages have to increase? Do people even go back to eating at bars and restaurants? What does a "new normal" look like?
They have little to lose compared to baby boomers. My guess is they will be shocked at how hard it will be to get a loan just like after 2008.. And they will go back to work when the teet goes dry. The sooner the better or socialism will become more appealing to yet even more people.
Lots of good points. I certainly agree with the last statement. You said the economy was very good, employment was low and the stock market was high. All true, but each point has a counterpoint that can't be dismissed. The economy was good, but generally on trend since 2009 - trend being 2% real GDP growth. Lackluster from a historical perspective, but generally pretty good. Employment was as historic lows, but labor force participation remained terribly low, and many of the new jobs were unskilled and low paying. This highlights the continuing problem of a skills gap in the US employment picture. The stock market was very high, but it was also very expensive at a p/e almost 20x forward earnings. Sure, not "tech bubble" craziness from 2000, but still expensive. Low interest rates became a justification for that, and we are going to get a lot more of that going forward. The worry is that while the Fed tells us we are not Japan and not going down that road, we are starting to look a lot like Japan. No one knows for sure the "why" on any of it.
One thing you learn quickly in BigHornRam’s school is the market doesn’t care what anyone thinks. You should make all investment decisions based on the market you have, not the market you want or think should be. For a decade I heard people complain about the market from 2008 and how much of a scam or pyramid scheme it is. Now they have something else to complain about. All I know is the market won’t listen or care. Simple and elegant in many ways.
I am not disagreeing with you, but I will be shocked if there isn't a significant second dip - there are just so many "hidden" problems working through the "supply chain" at the moment. And people forget how many businesses don't make a dime until 90+% utilization - I have a hard time believing demand for entertainment, restaurants, retail and travel rebound that much in 12 months and then all the trickle down effects of unemployment, commercial real estate drop, loss of consumer confidence. I think there will be a significant sorting out of our economy in the next 12-18 months and can't imagine the market just powers through all that. But who knows, I have been wrong before.
We are completely on the same page. Markets might "double-dip" but S&P lows are around 2200 which is over 20% decline from here. Maybe we shouldn't be here at 2800? Not for me to decide. What I say is the concept of retesting bottoms is from long-term analysis. We didn't retest the lows in 2009, we didn't retest the lows in 2018. Maybe the Robinhoods of the world have changed the market dynamics or investor views? Not sure. All I know is, right now, I am looking at a market trading between 2850 and 2700, and I will trade that range until something changes. Everything seems to be focused on virus news, so it might take a new upturn in virus cases to retest the 2200 level. Right now, investors are looking beyond all of 2020. But completely agree with all that the economy is a complete mess and many companies will not survive this, even as many states start to partially reopen. The optimist in me says recessions are a natural part of the process and every company that goes out of business will be replaced by a new company with an energetic founder with a new idea.
