Coronavirus: when do we reach the bottom of the dip?

xorfish · April 30, 2020, 8:42am

Well is your friend in the market again?

This is quite an important decision that has yet to be made.

Cortana · April 30, 2020, 8:44am

I’m a bodybuilder/powerlifter, so I need heavy weights to maintain my physical ability. I also competed in European Powerlifting Championships, my PRs are 240kg Squat, 170kg Bench Press and 300kg Deadlift. So running in the forest or doing exercises in a Vitaparcour won’t cut it

I think the numbers will jump up again but there won’t be a 2nd lockdown.

Bojack · April 30, 2020, 9:18am

Alright, you got me

It’s funny how we can exchange hundreds of posts on various topics, but we still have no idea who is on the other side. The brain still tries to paint a picture, but it often fails miserably

Cortana · April 30, 2020, 9:34am

To get back to the actual topic. As we are slowly approaching the 3000 mark, I really think the March 23rd was the lowest point of this crisis. I’ve definitely learned a lot from it. You always have to expect to see a -35% drawdown (or even more) in a couple of weeks. Who knows how much further it would have fallen if the FED didn’t do anything, maybe we would be looking at -60% right now.

I can’t imagine what news would be necessary to see a new low as I can’t imagine that we’ll have a 2nd lockdown.

dbu · April 30, 2020, 10:02am

This could perhaps make a bit of sense if the rise in the stock market made any “sense” related to economy (which is, and will, be going down).
But as it doesn’t, at all, you cannot make any reasonable expectations, especially just based on the number mark (3000).

Cortana · April 30, 2020, 10:03am

But the economy isn’t the stock market.

Bojack · April 30, 2020, 10:04am

I think the virus unleashed some terrible economic policies, which will have a bad long term effect. The money printing is a curse. It distorts the natural balance of purchasing power in the World. Due to this, some people have more of it (undeserved), some less. This leads to ineffective allocation of resources and can result in poor economic growth. (see what happened to Japan since 1990)

dbu · April 30, 2020, 10:04am

Exactly, so based on what do you set your expectations of this having been the bottom?
Goes both ways

You don’t really seem to read very attentively - I am arguing for exactly the same point - you cannot predict the stock market.

Almost like you claim you can predict the (good and bad) news in the next 6-12 months etc., and then additionally you can predict the behavioral reaction by the (most) stock market participants.
If you cannot imagine it, doesn’t mean it cannot happen.

#recencybias

Cortana · April 30, 2020, 10:14am

I don’t know what the future will bring, we just have to wait and see. Whatever happens, it won’t change my investment strategy (invest everything what I save in low cost index funds as soon as the money is available).

When the SP500 went below 2300 in March me and my friends were joking that I’ll invest my 2nd pillar money (with I’ll transfer to Viac in May hopefully) at 3000, only to see it drop again to 2200. We called it “Stefs theorem” which means that the market always drops big after I made a lump sum (like I did with my whole initial investment at 3300 end of 2019/beginning of 2020).

It really looks like this joke might become reality after all lol.

glina · April 30, 2020, 10:28am

It makes perfect sense.
With interest rates at near 0%, you can borrow large amounts of money for an infinite amount of time and just wait for the economy to heal. The world will not end.

San_Francisco · April 30, 2020, 10:50am

Like flip-flopping.
It’s just that the flops are bigger than the flips, so to speak.

Slow, steady growth phases are probably best to be in the market.
Whereas turmoil with many ups and downs is more likely to set you back.

He is. Up about +17% in Vanguard as we speak.
Though considering selling it now - it’d be a good profit to bank, as he put it.

xorfish · April 30, 2020, 10:53am

That is also why it is quite dangerous to time the market. Even if you win once, you will probably do it more often.

San_Francisco · April 30, 2020, 10:59am

Well, there’s a danger in getting addicted to it.

Getting out of the markets virtually exactly at the all-time high to bank profits was really lucky.
Though you can hardly argue with his assessment that the run up to that was “good enough” to get out.

Getting into them after the big drops seems quite reasonable though.
The question is, if further turmoil will be ahead.

That’s the big one.
Some scientists can.

Gesk · April 30, 2020, 11:25am

There is this nice reddit sub full of “market timers” that are basically just flipping coins.

Except they market time on steroids with leverage

Cortana · April 30, 2020, 12:14pm

Holy hell.

I’m about to give up and cash out. All money in spy puts and don’t see this money train stopping. Refuse to buy calls. Not that anyone here really cares or wants an update but no way I’m selling. I’d rather go broke than admit defeat.

This is even worse than the Yahoo finance community discussion on USO lol. Here are a couple of good ones:

glina · April 30, 2020, 12:55pm

Wow. No wonder they call eachother “retards” on that forum.

Cortana · April 30, 2020, 12:57pm

The discussions in those posts are actually the best thing lol. @Bojack don’t feel bad about investing “too early”. You see, you’ll be way ahead of 95% of these guys.

Btw US hit 30 million unemployed today, reported 3.84 million (market expected 3.5 million).

Neville · April 30, 2020, 1:46pm

Well, somebody must make the losses that are other people’s gains…

ma0 · April 30, 2020, 1:50pm

Did I see a -500k usd? ouch

Bojack · April 30, 2020, 2:15pm

Investing is not a zero-sum game. Active investing IS a zero-sum game relative to the market (index). Passive investors are not making money off these suckers, because we’re not the ones trading with them.