Are the markets telling the real COVID-19 truth

HundredRoom

HundredRoom

Well-known member
Forget all the political anti - panic rhetoric.

The stock markets are telling the real truth about the upcoming economic decline.
 
The $ is doing rather well out of all of this.

Whether this is the beginning of a bear market is difficult to say though. It could bounce back quickly in the next financial year.
 
You're right. Bull and Bear are often just used to say they're 'secular' as 'cyclical' is less of an issue to pension funds etc.
 
Having a very serious impact if you are looking to retire anytime soon, most markets are 20% plus down, so if you were in DOW/NASDAQ etc still seriously suffering.
I made a decision 3 weeks ago to take all my pot out of shares and into cash, best decision I ever made, saved me £100K to date, hopefully get back in at the right time and nice a nice little sum....
I feel very sorry for those that have lost serious amounts, may not recover if retirement is imminent
 
If you were nearing retirement anytime soon a good fund manager would have moved the funds into more bond base and fixed case to make the portfolio to be more resilient in this current climate
 
As said before profits will be down this year for most businesses (but not all) so prices were right to decline to some extent. No one knows the extent as we don't know the life of the virus. Spanish Flu is the worst virus ever recorded and that lasted about 10 months. That killed over 40 million people in a world much smaller that todays. My feeling is this is a quicker virus and with modern travel will spread much quicker, so a life of say 4 months to 6 months would seem realistic (ending mid May to mid July). We also have better precautions and much better informed than 1918/19. Across a say 5 year period to lose 6 months profit will mean an approx. 10% loss of profits. I assume share prices reflect the next 5 years profits. There seems to be a panic going on which does happen on stock markets like in 1987 and 2009 (33% drops) Also stop loss positions are being triggered i.e. when a share drops 20% it is automatically sold no matter what the fundamentals are.

Prices are currently around 32% off their peaks it seems an over reaction unless people think the virus will be about for over 18 months and will kill many more than Spanish flu.
 
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Algos drive the market harder and faster these days too.

It's definitely a repricing based on how many companies are going to have profits slammed as a result of this. It presents a buying opportunity though.
 
It will get very nasty if companies don't pay the scheduled dividend., which some people rely solely on for income. BP doubly hit will have long hard thoughts about paying / not paying theirs.
 
Isn't it - care to explain why you think that ?

Do you think there is some dark force controlling everything ?
 
Some companies will have to cut their dividends, if the virus lasts several months or more, but no one knows at present, but the market has assumed a re-run of Spanish flu +

Many companies do have cash reserves which they can use for dividends too even when profits are very low.

To me the banking crisis was much worse that the nasty current flu virus, because we knew it would take many years to solve the banking crisis. just as it took many years to build up.
 
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