If the bleeding stopped today (it won't!), how many years b4 our portfolios are back to...

[fairfaxlion2]

Well, BoA calling for Q2 GDP @ -12%. JPM -14 and GS -24(!). The lagging effects here are tremendous. Months would be a miracle.

It's wishful thinking. (Months)

You'll soon be getting glossy letters from your brokerage account explaining that recessions have typically ended in X months, and if you sell while it's down you will really miss out. They will compare it to the recession of 1990-91, since that one was a big nothing.

Meanwhile, they are not telling you that their own investment advisers are shorting the heck out of everything.

You have to look at pre-1920 or the end of the Carter administration to understand where this is heading - towards a totally dysfunctional economy

Near-zero interest rates pulled in decades if not centuries of future consumption and now merry-go-round is stopping completely

 

[blion72]

I'm no financial analyst, but there are viable drugs out there and already available, just not approved for this use. This hype ends quickly in the next month or so and then becomes more of a maintenance activity. This country cant sustain a lockdown for a prolonged period, especially when other countries have leveled off the curve already.

There's much to learn out there analytically and the faster we apply good practices, the faster this becomes a manageable disease.

country needs to be open for business in the next 2-4 weeks. hopefully some of the treatments help this process. I am not sure what is driving some of the politicians at the state level to go big with lock downs. that cannot be tolerated more than a couple more weeks. this is a psychological problem and hope is key. if this all turns quickly that will be key. anything more than a couple more months could destroy the economy. if 80% of the country are wiped out, there is no choice. you will get businesses and people eventually rebel against government draconian practices. some things that would help:

- WHO stops talking - they added no value by saying this is a pandemic because it has spread widely and not explaining the word.
- Governors stop their bravado talk and seeing who can do the biggest shutdown.
- progress on the drug front in the next 2 weeks.
- US 15 day program ends March 30th and we start to open back up.
- reporters stop saying that the virus is growing 10x per week due to the reported cases growing. they are not stating that most of these people may have had the virus and confirmed with testing.

these are all mood issues needed to turn corner.

 

[MtNittany]

2 years.

 

[fairfaxlion2]

country needs to be open for business in the next 2-4 weeks. hopefully some of the treatments help this process. I am not sure what is driving some of the politicians at the state level to go big with lock downs. that cannot be tolerated more than a couple more weeks. this is a psychological problem and hope is key. if this all turns quickly that will be key. anything more than a couple more months could destroy the economy. if 80% of the country are wiped out, there is no choice. you will get businesses and people eventually rebel against government draconian practices. some things that would help:

- WHO stops talking - they added no value by saying this is a pandemic because it has spread widely and not explaining the word.
- Governors stop their bravado talk and seeing who can do the biggest shutdown.
- progress on the drug front in the next 2 weeks.
- US 15 day program ends March 30th and we start to open back up.
- reporters stop saying that the virus is growing 10x per week due to the reported cases growing. they are not stating that most of these people may have had the virus and confirmed with testing.

these are all mood issues needed to turn corner.

After one more week people will start ignoring the warnings. this current strategy isn't going to work.

 

[SheldonJoe2215]

JP Morgan essentially says, 'move along, nothing to see here...'

https://www.cnbc.com/2020/03/21/sto...an-curb-coronavirus-spread-says-jpmorgan.html

 

[TFBaum]

It's wishful thinking. (Months)

You'll soon be getting glossy letters from your brokerage account explaining that recessions have typically ended in X months, and if you sell while it's down you will really miss out. They will compare it to the recession of 1990-91, since that one was a big nothing.

Meanwhile, they are not telling you that their own investment advisers are shorting the heck out of everything.

You have to look at pre-1920 or the end of the Carter administration to understand where this is heading - towards a totally dysfunctional economy

Near-zero interest rates pulled in decades if not centuries of future consumption and now merry-go-round is stopping completely

Okay I will play. Please tell me how the underlying aspects of this is the recession you referenced? This is caused by a health crisis not over priced assets not bad banking not over grown inventories not excess wage growth. The underlying structure of the economy has changed. Maybe I am to optimistic.

 

[AldenT]

Okay I will play. Please tell me how the underlying aspects of this is the recession you referenced? This is caused by a health crisis not over priced assets not bad banking not over grown inventories not excess wage growth. The underlying structure of the economy has changed. Maybe I am to optimistic.

Is it your position that the US economy snaps back? If so what is that based on?
Growth was slowing to below 2% anyway, and the Fed was bumping rates at near-full employment. A crater in quarterly growth, larger than any seen since the Second World War, and the millions of job losses as a result, would likely take years to recover from.

 

[fairfaxlion2]

Okay I will play. Please tell me how the underlying aspects of this is the recession you referenced? This is caused by a health crisis not over priced assets not bad banking not over grown inventories not excess wage growth. The underlying structure of the economy has changed. Maybe I am to optimistic.

The underlying aspect of the recession will be fundamentals. Rapid declines in demand - going down to basically zero for some sectors, until this is over.

The assets were overpriced before this started. The evidence is pretty clear - a 30 percent decline in the last month for the S&P. This crisis was just the trigger for a sell-off that should have happened way before now.

 

[TFBaum]

The underlying aspect of the recession will be fundamentals. Rapid declines in demand - going down to basically zero for some sectors, until this is over.

The assets were overpriced before this started. The evidence is pretty clear - a 30 percent decline in the last month for the S&P. This crisis was just the trigger for a sell-off that should have happened way before now.

How were the assets overpriced? Discounted cash flow? Price per earnings? Btw I enjoy this conversation I want to learn not debate. I respect other viewpoints.

 

[fairfaxlion2]

How were the assets overpriced? Discounted cash flow? Price per earnings? Btw I enjoy this conversation I want to learn not debate. I respect other viewpoints.

https://www.multpl.com/shiller-pe

Look at the points in history where it has exceeded 30.

If you are buying equities when this is above 30, you shouldn't expect a great return, IMO. If you buy when this is below 15, you will probably have a great return.

There's a lot of noise out there that you don't really need to know.

The market comes down to fundamentals in the end.