In Bear Market Rally, Some Say They’ve Got It All Figured Out
"There is no dichotomy in reality", Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management told Bloomberg, for a piece making the case for the dramatic bounce in equities off last month's lows.
America has been "so good at performing our recommended treatment [and] we’re seeing bad data because good social distancing means a better virus outlook", he added. "Less social distancing [is] leading to a rising market on the belief the data will get better".
With all d
Heisenberg,
When are you going to say something about the report by the Times of Israel that Trump warned Israel and NATO in NOVEMBER of an impending pandemic?
US alerted Israel, NATO to disease outbreak in China in November – TV report
White House was reportedly not interested in the intel, but it was passed onto NATO, IDF; when it reached Israel’s Health Ministry, ‘nothing was done’
https://www.timesofisrael.com/us-alerted-israel-nato-to-disease-outbreak-in-china-in-november-report/
That is a classical fake news. I would rather believe in reptilians than in US intelligence which forecasted pandemic in November.
H, I’m probably going to eat my words for this, but I really think “this time is different”. People are getting an extra $600 a week in unemployment benefits, that’s $15 a hour on top of their state benefits. Assuming we can get back to normal in some way shape or form in a reasonable amount of time, lower income households are going to come out of this better than any other crisis before and possibly better than if this crisis never happened. Then with business bailouts, the Fed creating more liquidity facilities/acronyms than I can keep track of, and future state/local bailouts; the Fed/Gov have/are creating all the necessary conditions for this to be a true V recovery.
Good comment, and surely a possibility. Next week I’ll bet one quarter of one percent of my portfolio on it. My reason for the small size of the bet is I have trouble envisioning what would follow the “true V”. All the past V’s have been followed in successively shorter intervals by successively larger busts.
It will be interesting to see if that money stabilizes rental and mortgage markets.
It will also be interesting to see if “essential workers” making less start to just leave their jobs and apply for this insurance instead.
Anonymous- so just bail out Illinois and other financially irresponsible states- or give all states relatively the same amount? If all states received cash, the states that were historically financially responsible would still come out ahead of the states that were not historically financially responsible. This seems ludicrous- but what do I know.
My gut feeling we are going to have to chase some people back to work with a broom……This is the ultimate gravy train that has been delivered to the marginally employed (helicopter money )… Not sure how we wean everyone when the time comes….
I am also skeptical of this rally. After a gut wrenching drop my portfolio has since recovered to within 4% of its high. Anyway my point is i have been selling hard the last 2 weeks; in this market i can accept a 4% loss. Currently i am 70% in cash and hoping to get more out before anything else happens. After that i will sit on the side lines and see what happens.
I know how you feel. I took advantage of the super high implied volatilities a few weeks ago to buy/write a bunch of April covered calls. I spent last week hoping they all would be exercised (they were). I could have rolled them into new options at higher strikes and lower volatilities, no thanks. I will be looking for shorts to cover my remaining longs.
Just not sure how anyone can price anything with any confidence. Too much uncertainty and too many long term after-shocks whose scale cannot even be guessed. For example what happens to the health care market if SCOTUS declares Obamacare unconstitutional –to say nothing of what will happen to premiums and the quality of coverage over the next 5 years in the current system and so the health care inflation (and increased risk) that individuals and companies that defray the cost of premiums will face in the future. Just pricing in Covid-19 risk into premiums alone will have an impact.
Current testing measures are a hodge-podge of controls slapped together to present a qualitative graph that should not be applied toward to anything other guinea pigs.
Avoiding robust testing schemes nationwide before a restart is the same as investing in the market at this time without fundamental data. It is not hope-ium behind the wheel, it is intentional socialization of economic risk and a disregard for the lives that form the tip of the spear who apparently do not merit the cost and energy of additional annealing.
I am sceptical about anyone basing any strategy on market timing, particularly if the purpose of your investment is medium to long term return on savings (pension etc). Markets are attractively priced relative to history. Over a three to 5 year horizon, equities (now) are the only game in town.
Recommendations not to invest based on some contestable theory of a “bear market bounce” are spurious and irrelevant if this medium to long term view is maintained. Sensationalist product like this does a disservice to smaller retail investors who should be encouraged to take advantage of an historic opportunity.
Have we touched the bottom? No idea. Will indices be higher in 3-5 years? Undoubtedly.