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Senior Advisor

Jen

as per our discussion regarding the final destination for the stock market.

Hardly rocket science but I said that the bottom(s) won't be market driven but as a response to policy interventions.

We're covering the market with kitchen sinks including the Fed openly buying ETFs to support it.

I can't make myself root for a significant worsening of the pandemic- even though I think that's a distinct possibility- so I'm just watching.

In any case, stocks were overvalued at the highs, and earnings will be poor for several quarters in the best case. And stock buybacks aren't going to be back in fashion for a very long time. The new game will actually be for corps to trow out all their dirty secrets over the next few quarters (because whocouldathunkit) then use the lower stock prices to reset the management incentives at a lower price where they can cash in.

18 Replies
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Veteran Advisor

Re: Jen

It’s interesting the the DOW did drop to my initial target of 18000.  With the bounce back today, I am getting out of 85% of my funds, and am planning tomorrow to get out of most of my stock.  

My thinking is yesterday was the people that sold the market, buying back their short sales - today - bottom pickers looking to buy in.   

Our governor is on now, saying they don’t expect peak infections here in MN for another 14 weeks - peak - 14 weeks.  That brings us to the first week in July.  

I can’t help but think, that we are going to go back and test the low of 18000, and the gap the also will be tested.   Again -  it might be the wrong thing to do, but I just don’t think this stock market has yet found the low.  It really won’t be safe to reenter the market as far as I am concerned, until we have a vaccine, or a MEDICALLY PROVEN treatment.  Right now - we don’t have that.

So as of this coming Friday, we have a “Stay At Home” order in effect.  It’s what several other states already have.

I gotta go for a while - we need to get some items for the next couple of weeks - will check back soon...

 

Jen

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Senior Contributor

Re: Jen

My thoughts are the solution will be a vaccine 

From what I hear about how it impacts the lungs there is unlikely to be a chemical to beat it but rather just the mechanical equipment to keep the body alive until it beats the virus or other organs fail and it is all over.

There are studies going on to find the antibodies in those who have survived and perhaps something will come from that but likely take at least as long as developing a vaccine which is 12 months away at the very best more likely 18 months.

Some of us old folks or immune compromised people will remain in isolation of one form or another until then or until we break our curtain of distance and get the virus. It is only hoped that by the time we do get sick there will be enough equipment available to help.

 

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Advisor

Re: Jen

That antibody study could likely have a purpose.
I can think of 2 specific livestock diseases that were epidemic in nature wherein the development of serums were highly effective in buying time until a safe and effective vaccine was developed and widely distributed. 

I have no scientific background or credentials, or “great natural intuition”, as at least one interested party has claimed, that would make me know or think that might be relevant to this situation, so who knows?

One thing I have been told by a medical professional is that analysis of the antibodies can provide indication of the age of the infection/immunity.

 

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Senior Contributor

Re: Jen


@jennys_mn wrote:

It’s interesting the the DOW did drop to my initial target of 18000.  With the bounce back today, I am getting out of 85% of my funds, and am planning tomorrow to get out of most of my stock.  

My thinking is yesterday was the people that sold the market, buying back their short sales - today - bottom pickers looking to buy in.   

Our governor is on now, saying they don’t expect peak infections here in MN for another 14 weeks - peak - 14 weeks.  That brings us to the first week in July.  

I can’t help but think, that we are going to go back and test the low of 18000, and the gap the also will be tested.   Again -  it might be the wrong thing to do, but I just don’t think this stock market has yet found the low.  It really won’t be safe to reenter the market as far as I am concerned, until we have a vaccine, or a MEDICALLY PROVEN treatment.  Right now - we don’t have that.

So as of this coming Friday, we have a “Stay At Home” order in effect.  It’s what several other states already have.

I gotta go for a while - we need to get some items for the next couple of weeks - will check back soon...

 

Jen


Is your governor stupid or just a bit touched?

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Veteran Advisor

Re: Jen

Our governor is doing the right thing - he will need to go farther before this is over, with a complete lockdown.  Short of a cure, it’s the only way left to slow the infections down...

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Senior Advisor

Re: Jen

We got a pretty clear 3 wave pattern here so I'm guessing we'll burn some time range bound in a corrective 4th, then spike down to a new low in a 5th. Then there will be a host of possibilities from there.

I really think the world changed here and even people who are drawing on their life's experiences for guidance- even relatively old ones like me- should be careful.

Most likely to me seems a lengthy yield drought- where there's no reliable investment money to be had anywhere. And I'm talking years.

OF course that would further stress everything- with a large retired and retiring cohort, defined benefit plans that need to meet obligations hanging on corps (some) and states and localities.

 

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Veteran Advisor

Re: Jen

TOTALLY agree SD - like I said before, people conditioned on the “just stay in” are going to find much of what they saved for in retirement is going to be gone.

I knew a fellow here that had invested heavily in the market before the 2008 crash.  He had retired from his construction business in 2006 - in 2009 I happened to see him and his wife at Culver’s.  He was back working for his son who had taken over the business.  Said he had to, because of what he lost in the market.  He wife, you could see, was still pretty upset about it.

The money I have in the market, I could lose, and still be OK.  That’s what it is supposed to be.  Tying up your life savings in a maybe, is a pretty scary scenario, I think.  But it’s where everyone basically has become convinced you need to be, just to stay even.  Many are going to find their retirements wiped out - and it ain’t gonna come back real fast.  I do not expect to see 30000 on the DOW again for years.  THIS downturn is gonna leave a mark.

Jen

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Senior Contributor

Re: Jen

(...like I said before, people conditioned on the “just stay in” are going to find much of what they saved for in retirement is going to be gone.      But it’s where everyone basically has become convinced you need to be, just to stay even.  Many are going to find their retirements wiped out - and it ain’t gonna come back real fast.  I do not expect to see 30000 on the DOW again for years.  THIS downturn is gonna leave a mark.)

I hope you'll understand that I will not be taking financial advice from you, you could not have been more wrong the last time you were preaching your financial advice and then you conveniently disappeared from this site.

 

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Senior Advisor

Re: Jen

She said she was out near the '18 high and reported that she was re-entering right before the low*.Wish I'd played it that well.

Is one of your imaginary friends whispering in your ear?

*they did ring a bell on that- the admin made it abundantly clear that the op to ramp the market for the election was beginning last Jan and a whole lotta greedsters jumped on board. "Don't fight the Fed" and all that ageless wisdom, ya know?