U.S. stocks continue to soar!

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Lee_WSP
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Re: Something Can't Be Right

Post by Lee_WSP »

willthrill81 wrote: Thu Mar 26, 2020 1:52 pm
Lee_WSP wrote: Thu Mar 26, 2020 1:45 pm
magicrat wrote: Thu Mar 26, 2020 1:30 pm
pacodelostigres wrote: Thu Mar 26, 2020 1:05 pm
magicrat wrote: Thu Mar 26, 2020 12:29 pm The potential downsides are priced in. So are the potential upsides. Prices will change as potential becomes reality, whatever that turns out to be.
I generally believe in EMH, but I disagree with you here on everything but your last point. This is not a set of circumstances that the models are well built to address, and I think that the novelty of the situation is both driving volatility and quite a bit of mispricing. Even if you believe that the models can handle this, what inputs do you use for earnings, or anything else for that matter? I've worked in FP&A for many years and I'd have no idea how to even do a corporate budget in this scenario, much less any kind of valid equity analysis.

VIX sitting at 60 is a pretty good indicator that the markets are struggling to correctly price anything.
A well-priced market reflects uncertainty and a range of potential outcomes. The range of potential outcomes is much, much higher than usual, so of course markets will be more volatile, and will move up or down substantially when real outcomes replace the very wide range of potential outcomes.
Can you explain to me how it prices in uncertainty about the price? Serious question. Although, if there's no good answer, I will remain convinced that EMH cannot explain today's market prices.
Due to loss aversion, I would assume that ceterus paribus (e.g. return expectations are unchanged), greater uncertainty would lead to lower prices.
But how does that square with the existence of short-ers and the subsequent squeezers?

If the vast majority of the market prices in uncertainty and is unwilling to bid higher than say 2200, that allows for a few actors to bid prices higher by buying up the much fewer sell orders.
magicrat
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Re: Something Can't Be Right

Post by magicrat »

Lee_WSP wrote: Thu Mar 26, 2020 1:45 pm
magicrat wrote: Thu Mar 26, 2020 1:30 pm
pacodelostigres wrote: Thu Mar 26, 2020 1:05 pm
magicrat wrote: Thu Mar 26, 2020 12:29 pm The potential downsides are priced in. So are the potential upsides. Prices will change as potential becomes reality, whatever that turns out to be.
I generally believe in EMH, but I disagree with you here on everything but your last point. This is not a set of circumstances that the models are well built to address, and I think that the novelty of the situation is both driving volatility and quite a bit of mispricing. Even if you believe that the models can handle this, what inputs do you use for earnings, or anything else for that matter? I've worked in FP&A for many years and I'd have no idea how to even do a corporate budget in this scenario, much less any kind of valid equity analysis.

VIX sitting at 60 is a pretty good indicator that the markets are struggling to correctly price anything.
A well-priced market reflects uncertainty and a range of potential outcomes. The range of potential outcomes is much, much higher than usual, so of course markets will be more volatile, and will move up or down substantially when real outcomes replace the very wide range of potential outcomes.
Can you explain to me how it prices in uncertainty about the price? Serious question. Although, if there's no good answer, I will remain convinced that EMH cannot explain today's market prices.
Sure, illustratively. There are thousands of stocks, and there are hundreds of thousands (?) of people who analyze those stocks and try to figure out how much to pay for them. They all have a model of some sort (some complex, some not so). Good models have a range of outcomes (valuations) that are probability weighted. Add up the probability weighted outcomes (valuations) and you have a price. You can also get to the same spot by toggling the discount rate in your valuation model. All of the people who try to price any given stock will update their models as new information comes in and trade accordingly.

EMH does not suggest that stock prices predict the future, it suggests that available information is incorporated into prices, and therefore you cannot beat the market (on a risk-adjusted basis), because you don't know anything that is not available to the rest of the market participants.
Lee_WSP
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Re: Something Can't Be Right

Post by Lee_WSP »

magicrat wrote: Thu Mar 26, 2020 2:04 pm
Lee_WSP wrote: Thu Mar 26, 2020 1:45 pm
magicrat wrote: Thu Mar 26, 2020 1:30 pm
pacodelostigres wrote: Thu Mar 26, 2020 1:05 pm
magicrat wrote: Thu Mar 26, 2020 12:29 pm The potential downsides are priced in. So are the potential upsides. Prices will change as potential becomes reality, whatever that turns out to be.
I generally believe in EMH, but I disagree with you here on everything but your last point. This is not a set of circumstances that the models are well built to address, and I think that the novelty of the situation is both driving volatility and quite a bit of mispricing. Even if you believe that the models can handle this, what inputs do you use for earnings, or anything else for that matter? I've worked in FP&A for many years and I'd have no idea how to even do a corporate budget in this scenario, much less any kind of valid equity analysis.

VIX sitting at 60 is a pretty good indicator that the markets are struggling to correctly price anything.
A well-priced market reflects uncertainty and a range of potential outcomes. The range of potential outcomes is much, much higher than usual, so of course markets will be more volatile, and will move up or down substantially when real outcomes replace the very wide range of potential outcomes.
Can you explain to me how it prices in uncertainty about the price? Serious question. Although, if there's no good answer, I will remain convinced that EMH cannot explain today's market prices.
Sure, illustratively. There are thousands of stocks, and there are hundreds of thousands (?) of people who analyze those stocks and try to figure out how much to pay for them. They all have a model of some sort (some complex, some not so). Good models have a range of outcomes (valuations) that are probability weighted. Add up the probability weighted outcomes (valuations) and you have a price. You can also get to the same spot by toggling the discount rate in your valuation model. All of the people who try to price any given stock will update their models as new information comes in and trade accordingly.

EMH does not suggest that stock prices predict the future, it suggests that available information is incorporated into prices, and therefore you cannot beat the market (on a risk-adjusted basis), because you don't know anything that is not available to the rest of the market participants.
But if the market participants target prices are widely divergent, doesn't that provide for the opportunity to arbitrage and manipulate short term prices?

Or does EMH only accurately model the long term?
rascott
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Re: U.S. stocks continue to soar!

Post by rascott »

rudeboy wrote: Thu Mar 26, 2020 1:54 pm
Silk McCue wrote: Thu Mar 26, 2020 1:50 pm
rudeboy wrote: Thu Mar 26, 2020 1:41 pm These past few days have really demonstrated that nobody knows nothing. 5% increase on the same day the worst jobs report of all time comes out. Did anyone see that coming?

Is this a dead cat bounce or have we hit the bottom?

I'm glad I don't have to try to predict it. Buy-and-hold makes life simpler.
The bad jobs report was not a surprise to anyone. It was already baked into the mental calculus.

Cheers
The anticipation of a bad report may have been baked in, but no one new the actual numbers until they were released. The numbers were higher than many predicted.

The number is totally irrelevant. Jobs reports are only relevant when they are used as market guidance for how the economy is doing. Everyone knows the economy is basically shut down and the numbers are going to be horrific for a few months. The market cares more about what the numbers will look like in August and beyond..... not April.

That every unemployed person is going to be paid $4k/mo for the next 4 months gives enough breathing room to bridge. The data on the virus is what matters.... not an unemployment report.
magicrat
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Re: Something Can't Be Right

Post by magicrat »

Lee_WSP wrote: Thu Mar 26, 2020 2:08 pm
magicrat wrote: Thu Mar 26, 2020 2:04 pm
Lee_WSP wrote: Thu Mar 26, 2020 1:45 pm
magicrat wrote: Thu Mar 26, 2020 1:30 pm
pacodelostigres wrote: Thu Mar 26, 2020 1:05 pm

I generally believe in EMH, but I disagree with you here on everything but your last point. This is not a set of circumstances that the models are well built to address, and I think that the novelty of the situation is both driving volatility and quite a bit of mispricing. Even if you believe that the models can handle this, what inputs do you use for earnings, or anything else for that matter? I've worked in FP&A for many years and I'd have no idea how to even do a corporate budget in this scenario, much less any kind of valid equity analysis.

VIX sitting at 60 is a pretty good indicator that the markets are struggling to correctly price anything.
A well-priced market reflects uncertainty and a range of potential outcomes. The range of potential outcomes is much, much higher than usual, so of course markets will be more volatile, and will move up or down substantially when real outcomes replace the very wide range of potential outcomes.
Can you explain to me how it prices in uncertainty about the price? Serious question. Although, if there's no good answer, I will remain convinced that EMH cannot explain today's market prices.
Sure, illustratively. There are thousands of stocks, and there are hundreds of thousands (?) of people who analyze those stocks and try to figure out how much to pay for them. They all have a model of some sort (some complex, some not so). Good models have a range of outcomes (valuations) that are probability weighted. Add up the probability weighted outcomes (valuations) and you have a price. You can also get to the same spot by toggling the discount rate in your valuation model. All of the people who try to price any given stock will update their models as new information comes in and trade accordingly.

EMH does not suggest that stock prices predict the future, it suggests that available information is incorporated into prices, and therefore you cannot beat the market (on a risk-adjusted basis), because you don't know anything that is not available to the rest of the market participants.
But if the market participants target prices are widely divergent, doesn't that provide for the opportunity to arbitrage and manipulate short term prices?

Or does EMH only accurately model the long term?
Not sure what you mean by "manipulate short term prices." If you think that you have a better view of a stock's price than what it is trading at, then yes by all means act on it and make your money. EMH just suggests you will not be good at that. Also, EMH is not a model.
peskypesky
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Re: Something Can't Be Right

Post by peskypesky »

keyfort wrote: Thu Mar 26, 2020 12:18 pm [This topic has been merged into the existing thread "U.S. stocks continue to soar!" Moderator Misenplace]

I'm not sure I understand this.. unemployment figures just released show the biggest sudden filing for unemployment in the US in a single week, almost in the entire history of the country. 3.3 million people suddenly unemployed. Unemployment already up to 5.5%.

News that although NY is slowing the hospitalization rate, apparently people need to be on ventilators for something like 11-21 days, unlike the 3-4 days for other respiratory problems. India just locked down over a billion people. European countries have cases exploding still (Spain, Netherlands etc), UK has locked down.

And yet, the market is just going up and up. I simply don't understand this and I don't see how!
Maybe because a certain individual has basically said we'll be back to business as normal in a couple of weeks. I guess the "rational" market believes this individual.
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willthrill81
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Re: Something Can't Be Right

Post by willthrill81 »

magicrat wrote: Thu Mar 26, 2020 2:37 pmAlso, EMH is not a model.
All hypotheses and theories imply some kind of model, but it might not be a mathematical model.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
rudeboy
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Re: U.S. stocks continue to soar!

Post by rudeboy »

rascott wrote: Thu Mar 26, 2020 2:18 pm
rudeboy wrote: Thu Mar 26, 2020 1:54 pm
Silk McCue wrote: Thu Mar 26, 2020 1:50 pm
rudeboy wrote: Thu Mar 26, 2020 1:41 pm These past few days have really demonstrated that nobody knows nothing. 5% increase on the same day the worst jobs report of all time comes out. Did anyone see that coming?

Is this a dead cat bounce or have we hit the bottom?

I'm glad I don't have to try to predict it. Buy-and-hold makes life simpler.
The bad jobs report was not a surprise to anyone. It was already baked into the mental calculus.

Cheers
The anticipation of a bad report may have been baked in, but no one new the actual numbers until they were released. The numbers were higher than many predicted.

The number is totally irrelevant. Jobs reports are only relevant when they are used as market guidance for how the economy is doing. Everyone knows the economy is basically shut down and the numbers are going to be horrific for a few months. The market cares more about what the numbers will look like in August and beyond..... not April.

That every unemployed person is going to be paid $4k/mo for the next 4 months gives enough breathing room to bridge. The data on the virus is what matters.... not an unemployment report.
Well, the data on the virus is disasterous, so.... why is the market up 5%?

Hindsight is 20/20 -- you're coming up with an explanation as to why the jobs report didnt impact the market after-the-fact. Did you predict yesterday that the market would be soaring today?
keyfort
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Re: U.S. stocks continue to soar!

Post by keyfort »

EMH, like most economics, is a soft science, isn't it? We're dealing with people's emotions and behavior, not the gravitational constant which doesn't vary anywhere in the universe. EMH doesn't exist anywhere else in the universe nevermind not vary anywhere else in the universe. Sorry for stating the obvious but I find it irksome that EMH and other hypotheses are talked about as if they were derived from first principles. Maybe the market has priced in something, maybe it hasn't, maybe people don't understand what they've been told, maybe they've been told a lie, maybe there was a mistake etc etc, maybe investors are irrational etc etc.

But I do agree that this is pretty much never actionable in a good way, so it's probably better for me to buy and hold as I sure can't figure it out!
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Stinky
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Re: U.S. stocks continue to soar!

Post by Stinky »

Cheez-It Guy wrote: Thu Mar 26, 2020 8:51 am Could it be three in a row? That's called a WINNING STREAK. It HAS happened before.
Yes. A legitimate WINNING STREAK.

Three in a row!
Last edited by Stinky on Thu Mar 26, 2020 3:03 pm, edited 1 time in total.
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keyfort
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Re: U.S. stocks continue to soar!

Post by keyfort »

rudeboy wrote: Thu Mar 26, 2020 2:57 pm
rascott wrote: Thu Mar 26, 2020 2:18 pm
rudeboy wrote: Thu Mar 26, 2020 1:54 pm
Silk McCue wrote: Thu Mar 26, 2020 1:50 pm
rudeboy wrote: Thu Mar 26, 2020 1:41 pm These past few days have really demonstrated that nobody knows nothing. 5% increase on the same day the worst jobs report of all time comes out. Did anyone see that coming?

Is this a dead cat bounce or have we hit the bottom?

I'm glad I don't have to try to predict it. Buy-and-hold makes life simpler.
The bad jobs report was not a surprise to anyone. It was already baked into the mental calculus.

Cheers
The anticipation of a bad report may have been baked in, but no one new the actual numbers until they were released. The numbers were higher than many predicted.

The number is totally irrelevant. Jobs reports are only relevant when they are used as market guidance for how the economy is doing. Everyone knows the economy is basically shut down and the numbers are going to be horrific for a few months. The market cares more about what the numbers will look like in August and beyond..... not April.

That every unemployed person is going to be paid $4k/mo for the next 4 months gives enough breathing room to bridge. The data on the virus is what matters.... not an unemployment report.
Well, the data on the virus is disasterous, so.... why is the market up 5%?

Hindsight is 20/20 -- you're coming up with an explanation as to why the jobs report didnt impact the market after-the-fact. Did you predict yesterday that the market would be soaring today?
Good point. Did they predict yesterday that the jobs report would be worse than expected but that the market would go up anyway?
Last edited by keyfort on Thu Mar 26, 2020 3:03 pm, edited 1 time in total.
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J G Bankerton
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Re: U.S. stocks continue to soar!

Post by J G Bankerton »

rudeboy wrote: Thu Mar 26, 2020 2:57 pm Well, the data on the virus is disasterous, so.... why is the market up 5%?

Hindsight is 20/20 -- you're coming up with an explanation as to why the jobs report didnt impact the market after-the-fact. Did you predict yesterday that the market would be soaring today?
6.24% at the close. My last buy of VOO at 201 is up 19.52%. Buy the dips. :greedy
Last edited by J G Bankerton on Thu Mar 26, 2020 3:09 pm, edited 1 time in total.
carminered2019
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Re: U.S. stocks continue to soar!

Post by carminered2019 »

WOW 3/26/2020 DOW up another 1,322 points :sharebeer
theorist
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Re: U.S. stocks continue to soar!

Post by theorist »

vipertom1970 wrote: Thu Mar 26, 2020 3:03 pm WOW 3/26/2020 DOW up another 1,322 points :sharebeer
Somehow, this worries me. (Yes, I know, I don’t know nuthin’; and I am still fully invested at my AA.)
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UpsetRaptor
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New Bull Market!

Post by UpsetRaptor »

[Thread merged into here, see below (Page 99) --admin LadyGeek]

This is somewhat funny, but the DOW just hit a bull market. Today's close is up 21.3% from Monday's close. S&P still a couple % away.

If the doomsdayers are right, maybe it'll be the shortest bull market ever, which we could facetiously dub The Great Coronavirus Bull Market of March 2020.

Or it could really be the start of a long bull.

Nobody knows nuthin.
livesoft
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Re: New Bull Market!

Post by livesoft »

Technically correct.
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carminered2019
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Re: U.S. stocks continue to soar!

Post by carminered2019 »

theorist wrote: Thu Mar 26, 2020 3:14 pm
vipertom1970 wrote: Thu Mar 26, 2020 3:03 pm WOW 3/26/2020 DOW up another 1,322 points :sharebeer
Somehow, this worries me. (Yes, I know, I don’t know nuthin’; and I am still fully invested at my AA.)
I have been buying big chunks on every dip since Dow at 24,000 and got one large bullet left but will wait for retesting new low and not chasing this rally.
Last edited by carminered2019 on Thu Mar 26, 2020 3:19 pm, edited 1 time in total.
RayKeynes
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Re: U.S. stocks continue to soar!

Post by RayKeynes »

Sold another 20% of my portfolio. :sharebeer
huskerfan1414
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Re: New Bull Market!

Post by huskerfan1414 »

This is insane.

Either the virus stuff is overblown and the market somehow knows it, and this is going to be a V.

or the market is walking up a mountain blind and is going to step off the ledge and go tumbling.

At this point I don't think there's a "medium" or "in between". I don't see how anyone can forecast anything other than great news or terrible news at this point.

But I know nothing! This has to be unprecedented.
The more I learn, the dumber I feel.
rkhusky
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Re: U.S. stocks continue to soar!

Post by rkhusky »

Sold some more to maintain my AA.
alfaspider
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Re: New Bull Market!

Post by alfaspider »

If I were betting on outcomes, I'd say this is a bear rally not the start of a bull (notwithstanding the technical bull). Multiple days in a row of several percent market moves is not the sign of a healthy market. But nobody knows nothing. Even less so given that this market is being driven by factors that have nothing to do with the market itself.
AK_Kiter
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Re: New Bull Market!

Post by AK_Kiter »

UpsetRaptor wrote: Thu Mar 26, 2020 3:15 pm This is somewhat funny, but the DOW just hit a bull market. Today's close is up 21.3% from Monday's close. S&P still a couple % away.

If the doomsdayers are right, maybe it'll be the shortest bull market ever, which we could facetiously dub The Great Coronavirus Bull Market of March 2020.

Or it could really be the start of a long bull.

Nobody knows nuthin.
That is hilarious! And I am glad to have stayed the course, in fact I hit a new rebalancing band on Monday.
JLJL
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Re: U.S. stocks continue to soar!

Post by JLJL »

All I know for sure is recency bias is strong with this crowd.

I remember Jan/Feb timeframe reading something from someone who said (paraphrase) "well if it drops below 25 [DJI 25,000] we're all screwed anyway"

By mid-march, a high number of people - dare I say majority - quite confident that this had a long way down yet.

Early this morning, most people were predicting an end to the 'rally' based on expected bad news in the jobless numbers and all but certain we haven't seen the bottom. It's been a month since we've had 3 + days in a row, so we know today won't be up. Heavy consensus we haven't bottomed.

Then we have a 3rd strong day. Now the sentiment seems to be "market knew all this bad virus news and jobless stuff, it was priced in ya dumdum".

We're at 22 and climbing, now 15 seems unimaginable unless... I don't know Archduke Ferdinand is assassinated. We were at 18 what a week ago? Ope nope that was MONDAY.

I have to say to all of you Thursday afternoon QBS who are saying this stuff was all "priced in": how on earth was the stimulus not priced in last week? It was obvious well over a week ago that an enormous package :!: was in works and would be through the senate this week, but if not, next at the latest. The terms being thrown around were 1.5T, $1k-2k per person, and encompassed the other big things that are apparently in it.

No reason the thing (market) should have dropped further last week and this week if the stimulus is the reason for the rally. For those of you today saying an insta-recession, 10s of thousands of deaths (pretty evident there will be) and 3M jobless claims on month 1 (to be clear the average prediction of an array of experts predictions was more like 1.5M) and on and on were "priced in", the stimulus sure as [expletive deleted - mod oldcomputerguy] should have been.

https://www.marketwatch.com/story/coron ... 2020-03-19

I'd like to say that in an equivalent relative timeline of 2-3 weeks ago in the US, China had completely locked down Wuhan, and then interprovince travel extending the lunar new year by weeks, and effectively shut down all industry and movement entirely. And when I say locked down Wuhan, you know what I mean. Not this namby-pamby "go for a walk through the dogwoods" kind of lockdown. Not only that, they were ID'ing the ill and extracting them from their homes, taking them to quarantine centers, in total isolation even from their families. They expanded it to the rest of the country when they realized thousands had left before the lockdown.

I hate to say it this way, but regarding that Wuhan epicenter, we have essentially 5 of them broiling up in the US right now: NYC, NJ, Detroit, New Orleans, FL, and others with hundreds or thousands of new reported cases per day. US people are free to come and go in and out of these epicenters, and have done so in droves. None of those hot spots are seeing anywhere near the level of controls that were placed on Wuhan. I have more to say on that, but this is the stock soaring thread where we are sure that what's happening right before our eyes is evidence of things to come. I promise you this, ask 10 Americans if they'd be willing to visit Wuhan right now and 9 would laugh you out of the room. DC or Tampa on the other hand...
ScubaHogg
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Re: New Bull Market!

Post by ScubaHogg »

huskerfan1414 wrote: Thu Mar 26, 2020 3:19 pm This is insane.

Either the virus stuff is overblown and the market somehow knows it, and this is going to be a V.

or the market is walking up a mountain blind and is going to step off the ledge and go tumbling.
Or maybe it's a small hill and a plateau...or perhaps a hill, followed by a crater in the ground with a sideways river, followed by a vertical cliff, followed by a....

:D

Just playing, fun to see how many possible shape descriptions I could come up with in the "hill/mountain/topography category"
“Unexpected Returns dominate the Expected Returns” - Ken French
MotoTrojan
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Re: New Bull Market!

Post by MotoTrojan »

I have never liked the definition of a 20% rise from a low. Didn't we have several rallies over 20% during the GFC? Nobody talks about those as bull markets; does it get nullified if a new low is achieved?

I much prefer a bull market being called when a new all-time high is achieved, with the bull starting official at the low, much the same way a recession is not technically called until it has actually been completed.
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J G Bankerton
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Re: U.S. stocks continue to soar!

Post by J G Bankerton »

JLJL wrote: Thu Mar 26, 2020 3:25 pm All I know for sure is recency bias is strong with this crowd.
As it is with all the talking heads. I find it amusing. :D
rudeboy
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Re: New Bull Market!

Post by rudeboy »

Dead bull bounce?
Last edited by rudeboy on Thu Mar 26, 2020 3:34 pm, edited 2 times in total.
carminered2019
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Re: New Bull Market!

Post by carminered2019 »

No fun but I am glad to witness all these new record lows and record highs in such a short time frame.
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Nicolas
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Re: U.S. stocks continue to soar!

Post by Nicolas »

Bluce wrote: Thu Mar 26, 2020 12:48 pm
J G Bankerton wrote: Thu Mar 26, 2020 12:15 pm
Bluce wrote: Thu Mar 26, 2020 9:03 am
J G Bankerton wrote: Wed Mar 25, 2020 11:58 am I'm back in the black, and have killed more bares than Davy Crockett. :mrgreen:
What kind of "bares"?
A timber be'are. I kilt more be'ares today. They are dropping left and right. :greedy
kilt him a be 'are when he was only three
Point 1) I was tweaking whoever misspelled "bear" as in bear market. They spelled it "bare." Today, with many people not knowing their native language, it's always a crap shoot to know if they're misspelling on purpose or not.

Point 2) Having been a young lad during Davy's era, I distinctly remember seeing it spelled in comic books as he pronounced it: "b'ar."

:sharebeer
Daniel Boone (not Crockett) was famously reported to have spelt bear as bar but it’s apparently apocryphal. From Wikipedia:
Frontiersmen often carved messages on trees or wrote their names on cave walls, and Boone's name or initials have been found in many places. A tree in present Washington County, Tennessee reads "D. Boon Cilled a. Bar on tree in the year 1760". A similar carving, preserved in the museum of the Filson Historical Society in Louisville, Kentucky, reads "D. Boon Kilt a Bar, 1803." The inscriptions may also be among numerous forgeries of the famous trapper, part of a long tradition of phony Boone relics. https://en.wikipedia.org/wiki/Daniel_Boone
Last edited by Nicolas on Thu Mar 26, 2020 3:36 pm, edited 2 times in total.
MotoTrojan
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Re: U.S. stocks continue to soar!

Post by MotoTrojan »

What a difference a few days makes! I was getting sad that I didn't have a chance to buy more small-cap value, then I realized it is still more than 20% off the December 2018 lows :twisted:.
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Nicolas
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Re: U.S. stocks continue to soar!

Post by Nicolas »

MotoTrojan wrote: Thu Mar 26, 2020 3:31 pm What a difference a few days makes! I was getting sad that I didn't have a chance to buy more small-cap value, then I realized it is still more than 20% off the December 2018 lows :twisted:.
Wait for it to go back down, is my advice.
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Stef
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Re: U.S. stocks continue to soar!

Post by Stef »

MotoTrojan wrote: Thu Mar 26, 2020 3:31 pm What a difference a few days makes! I was getting sad that I didn't have a chance to buy more small-cap value, then I realized it is still more than 20% off the December 2018 lows :twisted:.
I saw 2199 on Monday and now we are back to 2630 (+20%) in just 3 days, crazy.
columbia
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Re: U.S. stocks continue to soar!

Post by columbia »

JLJL wrote: Thu Mar 26, 2020 3:25 pm All I know for sure is recency bias is strong with this crowd.

I remember Jan/Feb timeframe reading something from someone who said (paraphrase) "well if it drops below 25 [DJI 25,000] we're all screwed anyway"

By mid-march, a high number of people - dare I say majority - quite confident that this had a long way down yet.

Early this morning, most people were predicting an end to the 'rally' based on expected bad news in the jobless numbers and all but certain we haven't seen the bottom. It's been a month since we've had 3 + days in a row, so we know today won't be up. Heavy consensus we haven't bottomed.

Then we have a 3rd strong day. Now the sentiment seems to be "market knew all this bad virus news and jobless stuff, it was priced in ya dumdum".

We're at 22 and climbing, now 15 seems unimaginable unless... I don't know Archduke Ferdinand is assassinated. We were at 18 what a week ago? Ope nope that was MONDAY.

I have to say to all of you Thursday afternoon QBS who are saying this stuff was all "priced in": how on earth was the stimulus not priced in last week? It was obvious well over a week ago that an enormous package :!: was in works and would be through the senate this week, but if not, next at the latest. The terms being thrown around were 1.5T, $1k-2k per person, and encompassed the other big things that are apparently in it.

No reason the thing (market) should have dropped further last week and this week if the stimulus is the reason for the rally. For those of you today saying an insta-recession, 10s of thousands of deaths (pretty evident there will be) and 3M jobless claims on month 1 (to be clear the average prediction of an array of experts predictions was more like 1.5M) and on and on were "priced in", the stimulus sure as [expletive deleted - mod oldcomputerguy] should have been.

https://www.marketwatch.com/story/coron ... 2020-03-19

I'd like to say that in an equivalent relative timeline of 2-3 weeks ago in the US, China had completely locked down Wuhan, and then interprovince travel extending the lunar new year by weeks, and effectively shut down all industry and movement entirely. And when I say locked down Wuhan, you know what I mean. Not this namby-pamby "go for a walk through the dogwoods" kind of lockdown. Not only that, they were ID'ing the ill and extracting them from their homes, taking them to quarantine centers, in total isolation even from their families. They expanded it to the rest of the country when they realized thousands had left before the lockdown.

I hate to say it this way, but regarding that Wuhan epicenter, we have essentially 5 of them broiling up in the US right now: NYC, NJ, Detroit, New Orleans, FL, and others with hundreds or thousands of new reported cases per day. US people are free to come and go in and out of these epicenters, and have done so in droves. None of those hot spots are seeing anywhere near the level of controls that were placed on Wuhan. I have more to say on that, but this is the stock soaring thread where we are sure that what's happening right before our eyes is evidence of things to come. I promise you this, ask 10 Americans if they'd be willing to visit Wuhan right now and 9 would laugh you out of the room. DC or Tampa on the other hand...
I appreciate your pessimism.
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JoeRetire
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Re: New Bull Market!

Post by JoeRetire »

Baby bull. Little Bitty Bull. Bubble Bull.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
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Stef
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Re: New Bull Market!

Post by Stef »

Maybe +20% and -20% weeks are the new bear/bull cycle?
wkimdds
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Bull Trap? Or are we recovering already

Post by wkimdds »

[Thread merged into here, see below. --admin LadyGeek]

Well that was anti-climactic...



It could be QE doing its magic...

Or a simple bull trap...

I just dont understand. Im out of job. All my friends as well. Coronavirus just got started. I guess this is the reason to stay the course
JLJL
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Re: New Bull Market!

Post by JLJL »

livesoft wrote: Thu Mar 26, 2020 3:16 pm Technically correct.
Ahh... now I get it. Back for 10 days now and we are a bull again. Please don't leave again! Or let us know when you plan to...
seychellois_lib
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Re: U.S. stocks continue to soar!

Post by seychellois_lib »

keyfort wrote: Thu Mar 26, 2020 3:01 pm EMH, like most economics, is a soft science, isn't it? We're dealing with people's emotions and behavior, not the gravitational constant which doesn't vary anywhere in the universe. EMH doesn't exist anywhere else in the universe nevermind not vary anywhere else in the universe. Sorry for stating the obvious but I find it irksome that EMH and other hypotheses are talked about as if they were derived from first principles. Maybe the market has priced in something, maybe it hasn't, maybe people don't understand what they've been told, maybe they've been told a lie, maybe there was a mistake etc etc, maybe investors are irrational etc etc.

But I do agree that this is pretty much never actionable in a good way, so it's probably better for me to buy and hold as I sure can't figure it out!
Boy, that is an accurate statement " I sure can't figure it out". There was a fascinating recent interview with Mohamed A. El-Erian linked elsewhere on the forum. My key takeaway from his thinking on the situation was "when you can not figure it out, make no changes to your portfolio from which you can not recover" (I am paraphrasing). He was warning on new investments such as junk bonds and over leveraged companies where the investor might be tantalized by high returns but could be completely wiped out ie wind up zero remaining value. He also warned on emerging markets due to the inevitable reevaluation of fragile supply chains when this is all over.

I immediately went back to my portfolio to re-examine my asset deployments which are now around 35% highly diversified equities (was 40%) 10% TIPS , 5% cash 25% short term treasuries, 25% Govt MF. I am retired and can sleep at night. I do have diversification into emerging markets however I plan to do nothing at this point. My exposure is not substantial.

My desired AA is 40/60 and I'll rebalance mid year, I may also look at options for safely increasing fixed returns at that time . I do not require "stellar" performance to support my lifestyle.
seychellois_lib
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Re: U.S. stocks continue to soar!

Post by seychellois_lib »

delete
JLJL
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Re: U.S. stocks continue to soar!

Post by JLJL »

columbia wrote: Thu Mar 26, 2020 3:33 pm
JLJL wrote: Thu Mar 26, 2020 3:25 pm All I know for sure is recency bias is strong with this crowd.

...
I appreciate your pessimism.
Thanks... it's a gift!
Itster
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Re: New Bull Market!

Post by Itster »

Volatility index is still pretty high.
Beach
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Re: New Bull Market!

Post by Beach »

Where is the good news about life returning to normal? I can't believe this is the start of the V
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watchnerd
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Re: New Bull Market!

Post by watchnerd »

JoeRetire wrote: Thu Mar 26, 2020 3:33 pm Baby bull. Little Bitty Bull. Bubble Bull.
That's my guess.

Otherwise known as:

Bear Bait
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP
Jim180
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Re: U.S. stocks continue to soar!

Post by Jim180 »

I thought the market hates uncertainty.
frugaltigris
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Re: New Bull Market!

Post by frugaltigris »

It is an ostrich market with heads (if any) well inside the sand.
surfstar
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Re: U.S. stocks continue to soar!

Post by surfstar »

JLJL wrote: Thu Mar 26, 2020 3:46 pm
columbia wrote: Thu Mar 26, 2020 3:33 pm
JLJL wrote: Thu Mar 26, 2020 3:25 pm All I know for sure is recency bias is strong with this crowd.

...
I appreciate your pessimism.
Thanks... it's a gift!
Agreed with your thoughts, but I prefer Realist:
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Stef
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Re: New Bull Market!

Post by Stef »

Beach wrote: Thu Mar 26, 2020 3:49 pm Where is the good news about life returning to normal? I can't believe this is the start of the V
Well if you look back at 2009 the good news came way after March 2009.
Jim180
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Re: New Bull Market!

Post by Jim180 »

I'd sure like to know what data market traders are looking at that shows the virus is under control.
surfstar
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Re: New Bull Market!

Post by surfstar »

Stef wrote: Thu Mar 26, 2020 3:36 pm Maybe +20% and -20% weeks are the new bear/bull cycle?
I'm going to have to contribute to a cash fund in my 457 and then time the exchange into equities! The random every two-weeks thing won't cut it anymore! ;)
anon3838
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Re: New Bull Market!

Post by anon3838 »

I will believe it when I can buy toilet paper without having to stand in a line of 300+ people waiting for a store to open.
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