Poll - How much of a crash are you predicting?

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Streptococcus
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Poll - How much of a crash are you predicting?

Post by Streptococcus » Mon Mar 16, 2020 4:23 pm

How much do you anticipate the stock market will drop from the beginning of the year when it’s all said and done?
Feel free to be optimistic. We all need it. :D

A. 40%
B. 50%
C. 55%
D. 60%
E. Over 60%

My hunch is 60% :shock: :shock: and I predict an ocean of capitulation threads.

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1789
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Re: Poll - How much of a crash are you predicting?

Post by 1789 » Mon Mar 16, 2020 4:26 pm

I don't know, maybe from top to bottom 60% and at the end of the year somewherere <40%. That is what my cloudy crystal ball told me.
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Re: Poll - How much of a crash are you predicting?

Post by Nicolas Perrault » Mon Mar 16, 2020 4:42 pm

My guess for the SP500 at the end of the year is [Current Price] + [fraction of the year that remains to pass]*(1/CAPE + Inflation), so given that the CAPE is at 22.5:

2386.13 + (9.5/12)*(1/22.5 + 2%)
= 2386.13 + 3.51% + 1.58%
= 2508.9

Given that the peak was of 3386.15, at the end of the year the proportion of value from peak would be 2508.9/3386.15 = 0.741.

So the year-end drawdown would be -25.9%.

Let's round that to -25%. There is nothing so optimist in your options.

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Re: Poll - How much of a crash are you predicting?

Post by keanoz » Mon Mar 16, 2020 4:43 pm

said -20 to -25 % in the old thread but now -40% to -50%

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Teriyaki
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Re: Poll - How much of a crash are you predicting?

Post by Teriyaki » Mon Mar 16, 2020 4:44 pm

If you're so sure that the market is going to fall at least 40 %, I sure hope you're currently shorting.

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Re: Poll - How much of a crash are you predicting?

Post by yangtui » Mon Mar 16, 2020 4:45 pm

43.435785132214564%

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Streptococcus
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Re: Poll - How much of a crash are you predicting?

Post by Streptococcus » Mon Mar 16, 2020 4:53 pm

Teriyaki wrote:
Mon Mar 16, 2020 4:44 pm
If you're so sure that the market is going to fall at least 40 %, I sure hope you're currently shorting.
If someone tells you he/she is sure about what’s going to happen, he/she should be tested :D

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Re: Poll - How much of a crash are you predicting?

Post by technovelist » Mon Mar 16, 2020 4:54 pm

I predict 75%.
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Re: Poll - How much of a crash are you predicting?

Post by MotoTrojan » Mon Mar 16, 2020 4:57 pm

I am struggling to understand these 70-80% drawdown people. Is this because of the virus solely or the fragility of the equity/monetary systems? It just seems so unprecedented relative to other massive epidemics as well as economic impact in China, which is further ahead than us in the cycle.

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Re: Poll - How much of a crash are you predicting?

Post by vipertom1970 » Mon Mar 16, 2020 5:16 pm

we reached the bottom today 3/16/2020, market already factored in the recession.

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Re: Poll - How much of a crash are you predicting?

Post by owenmia » Mon Mar 16, 2020 5:19 pm

I predict 80% and a global depression.

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Re: Poll - How much of a crash are you predicting?

Post by Rat_Race » Mon Mar 16, 2020 5:20 pm

E. 65% Nothing was solved after TGR other than throwing more debt and artificial stimulus into the economy, encouraging more risk, leverage and stock buybacks. Adjusted for inflation, that would bring us to about DJIA 10K.

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Last edited by Rat_Race on Mon Mar 16, 2020 5:47 pm, edited 3 times in total.

zvez
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Re: Poll - How much of a crash are you predicting?

Post by zvez » Mon Mar 16, 2020 5:21 pm

vipertom1970 wrote:
Mon Mar 16, 2020 5:16 pm
we reached the bottom today 3/16/2020, market already factored in the recession.
the bottom at least until tomorrow. ;)

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Re: Poll - How much of a crash are you predicting?

Post by Investor1212 » Mon Mar 16, 2020 5:22 pm

vipertom1970 wrote:
Mon Mar 16, 2020 5:16 pm
we reached the bottom today 3/16/2020, market already factored in the recession.
Wrong reasoning. There are many types of recessions. Some are long and horrible. Some are short. Just because the market priced in a recession doesn't mean it can't price in a worse recession.

And you are also wrong. We haven't reached the bottom. No where near it.

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Re: Poll - How much of a crash are you predicting?

Post by halfnine » Mon Mar 16, 2020 5:24 pm

1666 in the old thread and I am keeping it there.

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Re: Poll - How much of a crash are you predicting?

Post by vipertom1970 » Mon Mar 16, 2020 5:25 pm

ok, I will short the market tomorrow.

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Re: Poll - How much of a crash are you predicting?

Post by Investor1212 » Mon Mar 16, 2020 5:25 pm

MotoTrojan wrote:
Mon Mar 16, 2020 4:57 pm
I am struggling to understand these 70-80% drawdown people. Is this because of the virus solely or the fragility of the equity/monetary systems? It just seems so unprecedented relative to other massive epidemics as well as economic impact in China, which is further ahead than us in the cycle.
It is not just because of the virus. The virus has very little to do with it, but it will definitely exacerbate the decline.

The real reason is because of the fragility of US companies, which have been addicted to cheap credit for 10+ years, and because most of the corporate bond market is misrated. In 2008, we had misrated MBS. In 2020, we have misrated corporate bonds.

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Re: Poll - How much of a crash are you predicting?

Post by Dave55 » Mon Mar 16, 2020 5:32 pm

Streptococcus wrote:
Mon Mar 16, 2020 4:23 pm
How much do you anticipate the stock market will drop from the beginning of the year when it’s all said and done?
Feel free to be optimistic. We all need it. :D

A. 40%
B. 50%
C. 55%
D. 60%
E. Over 60%

My hunch is 60% :shock: :shock: and I predict an ocean of capitulation threads.
B. 50%

Dave

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Re: Poll - How much of a crash are you predicting?

Post by Drevor1 » Mon Mar 16, 2020 5:40 pm

E.

I was at 25% cash and went to a 50% cash as of 4/2/2019 to reduce my risk (53, retired a number of years now). I felt the crazy bull market had already rewarded me with great gains that were not expected, and I could survive with 50% in the market. I set a target of S&P 1400 (loss of 60%) as of 3 weeks ago before all this recent turmoil. I still don't expect it much lower than 60% unless we get into a really bad global recession after a couple quarters.

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Re: Poll - How much of a crash are you predicting?

Post by zaboomafoozarg » Mon Mar 16, 2020 5:41 pm

Beats me.

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Re: Poll - How much of a crash are you predicting?

Post by Investor1212 » Mon Mar 16, 2020 5:43 pm

E: Over 60%

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Re: Poll - How much of a crash are you predicting?

Post by Twiggsapproved » Mon Mar 16, 2020 5:47 pm

Over 60%. Not sure the last time the developed countries of the world decided to stop commerce for weeks to a quarter. There will be casualties literally and figuratively with jobs.

I hope I’m wrong. Stocks will come back but it could be many years.

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Re: Poll - How much of a crash are you predicting?

Post by KyleAAA » Mon Mar 16, 2020 5:48 pm

I initially said 25-30%. Since I'm so bad at this, I'll refrain from making another prediction.

Just kidding. I'm going to guess 45%.

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Re: Poll - How much of a crash are you predicting?

Post by foosball » Mon Mar 16, 2020 5:50 pm

55% trough, 4-year recovery
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Re: Poll - How much of a crash are you predicting?

Post by JD2775 » Mon Mar 16, 2020 5:53 pm

foosball wrote:
Mon Mar 16, 2020 5:50 pm
55% trough, 4-year recovery
Not to thread hijack but when you say '4-year recovery' , does a recovery refer to getting back to the previous high we were at in February? Or something different?

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Re: Poll - How much of a crash are you predicting?

Post by Dominic » Mon Mar 16, 2020 5:54 pm

I wouldn't be surprised if we ended the year 60% down. Also wouldn't be too surprised if we ended 10% down. The stock market is never a sure thing, but things feel especially uncertain right now. This could wind up being a Great Depression-level crisis or it could wind up being a short-lived recession with a quick recovery.

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Re: Poll - How much of a crash are you predicting?

Post by CobraKai » Mon Mar 16, 2020 5:56 pm

owenmia wrote:
Mon Mar 16, 2020 5:19 pm
I predict 80% and a global depression.

That would be back down to 2008 numbers, annihilating all gains since then. Yikes.

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Re: Poll - How much of a crash are you predicting?

Post by Rus In Urbe » Mon Mar 16, 2020 5:57 pm

*
I'm anticipating bottom at almost 50%, say Dow at around 15-16 or so.

But that is just my gut, based on nothing, consulting my crystal ball, and I"m prepared for that and hoping for better. I don't expect we'll be out of this for a year or more. But again, based on nothing.

You asked for predictions. Worth nothing.

Rus :beer

And of course we don't need to sell anything, so it's just hold on for the ride back up . . .
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Re: Poll - How much of a crash are you predicting?

Post by hagridshut » Mon Mar 16, 2020 6:07 pm

I would not be surprised to see around a 50% tumble by the time this is all done. Cash appears to be in high demand right now. Far too many parties had too many capital assets and not enough cash on hand.

Now, parties who are fearful for lack of cash are willing to get rid of capital assets and take a capital loss, in order to get cash to pay bills. One can't typically pay the bills with stock, or bonds, or Gold, or Bitcoin.

Cash is stash. Gold is trash. Everything has crashed.
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Re: Poll - How much of a crash are you predicting?

Post by foosball » Mon Mar 16, 2020 6:18 pm

JD2775 wrote:
Mon Mar 16, 2020 5:53 pm
foosball wrote:
Mon Mar 16, 2020 5:50 pm
55% trough, 4-year recovery
Not to thread hijack but when you say '4-year recovery' , does a recovery refer to getting back to the previous high we were at in February? Or something different?
Yes. I thought I'd spice up my guess with an additional prediction. Both were scientifically derived, I assure you. :P
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Re: Poll - How much of a crash are you predicting?

Post by Sandtrap » Mon Mar 16, 2020 6:27 pm

30 % sustained average drop with a shorter sustained trough of up to 40 % for the next 6 months with periodic turbulent gains after November 2020.
Stronger, more sustained but still tentative gains after February 2021.
Recovery to February 2019 levels toward and into Summer and Spring of 2021.
April of 2022 record breaking appearance of a Bull Market, whether sustained is unsure.
Appearance of positive interest rates, inflation, etc.

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Re: Poll - How much of a crash are you predicting?

Post by MoneyMarathon » Mon Mar 16, 2020 6:39 pm

Sandtrap wrote:
Mon Mar 16, 2020 6:27 pm
30 % sustained average drop with a shorter sustained trough of up to 40 % for the next 6 months with periodic turbulent gains after November 2020.
Stronger, more sustained but still tentative gains after February 2021.
Recovery to February 2019 levels toward and into Summer and Spring of 2021.
April of 2022 record breaking appearance of a Bull Market, whether sustained is unsure.
Appearance of positive interest rates, inflation, etc.
Don't forget the big double dip recession coming in late 2021. The world will swoon again due to an extra-hard re-Brexit and recover when a deal is pulled together at the last hour in January 2022. Get that dry powder ready, folks.

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Re: Poll - How much of a crash are you predicting?

Post by celia » Mon Mar 16, 2020 6:43 pm

57% below the top

I went back and saw OP said from the beginning of the year. Therefore, I change my answer to -48.3%

(Hey, that’s better than losing half your assets!)
Last edited by celia on Mon Mar 16, 2020 6:48 pm, edited 1 time in total.

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Re: Poll - How much of a crash are you predicting?

Post by mrwalken » Mon Mar 16, 2020 6:44 pm

-80% from the top. Cash is king

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Re: Poll - How much of a crash are you predicting?

Post by Clemblack » Mon Mar 16, 2020 6:44 pm

Help me understand something...


So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?

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Re: Poll - How much of a crash are you predicting?

Post by sschullo » Mon Mar 16, 2020 6:49 pm

Investor1212 wrote:
Mon Mar 16, 2020 5:25 pm
MotoTrojan wrote:
Mon Mar 16, 2020 4:57 pm
I am struggling to understand these 70-80% drawdown people. Is this because of the virus solely or the fragility of the equity/monetary systems? It just seems so unprecedented relative to other massive epidemics as well as economic impact in China, which is further ahead than us in the cycle.
It is not just because of the virus. The virus has very little to do with it, but it will definitely exacerbate the decline.

The real reason is because of the fragility of US companies, which have been addicted to cheap credit for 10+ years, and because most of the corporate bond market is misrated. In 2008, we had misrated MBS. In 2020, we have misrated corporate bonds.
Good point.
In other words the last ten years these companies did not grow in value, it was based on borrowed money to keep them going, buying back stock, borrowing just to keep from bankruptcy. Also, the massive tax cuts in late 2018 gave them a lot of cheap money too.
You are also saying this massive crash would have happened without the virus.
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Re: Poll - How much of a crash are you predicting?

Post by JD2775 » Mon Mar 16, 2020 6:50 pm

Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...


So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
Can’t speak for others but for me I can’t sell 401k, Roth or HSA funds...so that’s good...and my taxable is so small it wouldn’t be worth it even if I wanted to

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Re: Poll - How much of a crash are you predicting?

Post by peskypesky » Mon Mar 16, 2020 6:50 pm

Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...

So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
I sold ALL my stocks last Monday because on Sunday night I made a guess that the market would drop 35-40% from the highs. My plan was to buy back in when S&P500 dropped to 2300. We're close. But I honestly would not be surprised if it goes down even further.

I converted my stock index funds at Etrade and Vanguard to cash. Unfortunately, I couldn't do that with my 401k, so I got as close as I could and bought money-market index fund.
Last edited by peskypesky on Mon Mar 16, 2020 6:51 pm, edited 1 time in total.

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Re: Poll - How much of a crash are you predicting?

Post by celia » Mon Mar 16, 2020 6:51 pm

Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...


So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
Because we’re just guessing and are likely ‘off’ from the actual event.

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Re: Poll - How much of a crash are you predicting?

Post by hagridshut » Mon Mar 16, 2020 6:52 pm

Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...

So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
I can't speak for other Bogleheads out there, but I'm not getting out, because predictions and guesses are notorious for not happening.

It is notoriously difficult to predict a market bottom. I've been through 2001 and 2008. I had no clue when the market would hit bottom then, and at what point, and no clue now. My guess is just a wild guess. I do not consider it reliable, and neither should you!
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Re: Poll - How much of a crash are you predicting?

Post by Clemblack » Mon Mar 16, 2020 6:59 pm

hagridshut wrote:
Mon Mar 16, 2020 6:52 pm
Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...

So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
I can't speak for other Bogleheads out there, but I'm not getting out, because predictions and guesses are notorious for not happening.

It is notoriously difficult to predict a market bottom. I've been through 2001 and 2008. I had no clue when the market would hit bottom then, and at what point, and no clue now. My guess is just a wild guess. I do not consider it reliable, and neither should you!
That makes sense. But I still don't completely grasp the concept of "nobody can predict the bottom." Of course, that is true. Nobody knows where the bottom is.

But, if one sold when the market was at, say, 27,500 ... then bought back in at 23,000 ... then that person is better off than I am because I've simply held the whole time. Correct?

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Re: Poll - How much of a crash are you predicting?

Post by m@ver1ck » Mon Mar 16, 2020 7:05 pm

I was expecting a 50% crash anytime before I heard of the corona virus in Jan. After today's downturn, 20% more is easy as more people panic. Maybe 70% from the peak?

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Re: Poll - How much of a crash are you predicting?

Post by random_walker_77 » Mon Mar 16, 2020 7:06 pm

Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...


So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
There's a difference between thinking something, and being so sure about it that you're ready to bet on it. I suppose you're basically saying: "Talk is cheap, why don't you put your money where your mouth is" and I think you'll find that a) there are many who aren't _that_ sure and b) there are those who might be pretty sure but also have learned that trying to market time is a bad idea and are fighting those strong urges to do something rather than just "stay the course."

Most of the time, if you see a disaster coming, you do something.

There's a car barreling down the sidewalk? Jump out of the way.
Giant iceberg ahead? Turn the ship!!!

Everyone around you is quitting to continue making fortunes daytrading? Stay the course.
Everyone around you is leveraging into homes with no-doc liar loans? Stay the course.
Prestigious banks are collapsing and the government is trying to keep the entire financial system from collapsing? Stay the course.

But I'm willing to play the guessing game. I think there's a better than 50% chance the Dow will drop past 17,500 this year, and maybe a 25% chance it'd drop below 14K. Maybe a 5% chance it hits 11K.

That said, I rebalanced in January despite a strong instinct to hold some RSU sales in cash for a bit. But I didn't (oh darn). And I plan to stay the course. I'll check again next month to see if my allocation is out of whack and rebalance if needed.

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Re: Poll - How much of a crash are you predicting?

Post by m@ver1ck » Mon Mar 16, 2020 7:08 pm

Clemblack wrote:
Mon Mar 16, 2020 6:59 pm
hagridshut wrote:
Mon Mar 16, 2020 6:52 pm
Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...

So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
I can't speak for other Bogleheads out there, but I'm not getting out, because predictions and guesses are notorious for not happening.

It is notoriously difficult to predict a market bottom. I've been through 2001 and 2008. I had no clue when the market would hit bottom then, and at what point, and no clue now. My guess is just a wild guess. I do not consider it reliable, and neither should you!
That makes sense. But I still don't completely grasp the concept of "nobody can predict the bottom." Of course, that is true. Nobody knows where the bottom is.

But, if one sold when the market was at, say, 27,500 ... then bought back in at 23,000 ... then that person is better off than I am because I've simply held the whole time. Correct?

What if it swings back up before it hits 23000? And crashes again around the 26K mark? And osscilates in that space for a year. Before finally taking off like a rocket? When would you have gone in?

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Re: Poll - How much of a crash are you predicting?

Post by Enzo IX » Mon Mar 16, 2020 7:09 pm

Looking back at the 2008-2009 crash, we will know when we are getting close to a bottom when threads start popping up about "What is your Plan B."


Enzo

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Re: Poll - How much of a crash are you predicting?

Post by Clemblack » Mon Mar 16, 2020 7:14 pm

m@ver1ck wrote:
Mon Mar 16, 2020 7:08 pm
Clemblack wrote:
Mon Mar 16, 2020 6:59 pm
hagridshut wrote:
Mon Mar 16, 2020 6:52 pm
Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...

So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
I can't speak for other Bogleheads out there, but I'm not getting out, because predictions and guesses are notorious for not happening.

It is notoriously difficult to predict a market bottom. I've been through 2001 and 2008. I had no clue when the market would hit bottom then, and at what point, and no clue now. My guess is just a wild guess. I do not consider it reliable, and neither should you!
That makes sense. But I still don't completely grasp the concept of "nobody can predict the bottom." Of course, that is true. Nobody knows where the bottom is.

But, if one sold when the market was at, say, 27,500 ... then bought back in at 23,000 ... then that person is better off than I am because I've simply held the whole time. Correct?

What if it swings back up before it hits 23000? And crashes again around the 26K mark? And osscilates in that space for a year. Before finally taking off like a rocket? When would you have gone in?

I get that.

But still ... I keep reading things similar to "how would you know when to buy back in? How do you know where the bottom is?"

But one doesn't need to predict the bottom to have made a beneficial decision, does he? He simply needs to buy back in lower than where he sold. Is that correct?

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Re: Poll - How much of a crash are you predicting?

Post by rascott » Mon Mar 16, 2020 7:16 pm

35%-40% peak to trough. Will recover half of it by the end of the year, possibly more. From beginning of the year.... don't recall where we started..... but It'd say 30% from beginning of the year.

This will likely trigger a mild recession, but don't see it extending out much beyond 3Q.
Last edited by rascott on Mon Mar 16, 2020 7:19 pm, edited 2 times in total.

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Re: Poll - How much of a crash are you predicting?

Post by Dottie57 » Mon Mar 16, 2020 7:17 pm

D. 60%

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Re: Poll - How much of a crash are you predicting?

Post by mrwalken » Mon Mar 16, 2020 7:19 pm

Clemblack wrote:
Mon Mar 16, 2020 6:44 pm
Help me understand something...


So the market is currently down about 30% from its peak. Most people in this thread are guessing it'll continue to drop to around 50% or more. If that is one's prediction, then why is that person not selling right now? Why not get out of the market and buy back in in 6 to 12 months?
We don't know the bottom. Best to buy on the way down and keep dry powder so we can keep buying. I do not want to get to a point where the market is tanking and I have no room to keep buying. What if the s and p drops to 1000? If you cannot buy at that level, then all saving/investing efforts were a waste.

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Re: Poll - How much of a crash are you predicting?

Post by 9-5 Suited » Mon Mar 16, 2020 7:26 pm

If some of you really predict 80-90% losses, a global depression, and extreme job loss, then there’s an ethical argument in favor of going back to business as usual and accepting the modest death toll and overrun health system. The suffering in the former may be greater than the latter.

I will say 50% decline followed by annoyingly volatile markets for years every time another virus case or scare is discovered and reported.

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