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Have we already hit the bottom this year?


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I believe there will be another flood of selling. Don't have an opinion on what level it will go to. I guess the cliche "retest the lows" will do.
 

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Dunno what the market will go to but, with the Fed and BoC openly buying in the market, they are driving......

right now it’s not a free market economy.... it’s an illusion supported by the creation of cash.
 

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It makes very little sense to me that given the massive hit to GDP & profits that the market has only had a pretty minor pullback.
 

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The next year or two will be politically unstable. Which makes valuations risky.

What I mean by politically unstable is that basically all governments are engaging in massive interventions into every aspect of the economy and society at large.

I predict there will be significant errors and mistakes and and overreactions. It's a great time to be a trader.
 

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I think this bounce back is based wholly on the idea that spending isn't going to drop off, and prices will stay high. That temp. government income subsidies will smooth things over for a few months before people start collecting their high salaries again, and all the construction, stores and restaurants will fire right back up.

I predict that's not the way it's going to go. People aren't going to start spending frivolously on things for a long long while, even if they don't lose their job (which is the best case scenario) and prices on everything are going to drop.
 

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I think anyone who says 'this time its different' hasn't learned anything from the last 10 times/crashes they said that.

I don't think it'll go below 2200 again this year. Whether this rally will continue or whether it will bounce around a bit, I don't know. By end of May, I predict most parts of the US will be back up and running again. Sask is already talking about it for April. For sure spending and prices won't return to the way they were, even by the end of the year. I think some stocks are already overpriced, but many saw massive hits that were not reasonable and are back to reasonable values.

I could see Canada being a laggard in the recovery due to the price of oil and what will likely be a price crash in a few key housing markets. But this poll is about the S&P.

Mid term, the higher debts that are being accumulated to pay for all this are going to have to paid for this somehow. Higher tax rates are the obvious one which would have a drag on spending. But not every country is going to do that and americans would revolt if they had to pay for their largesse. So it'll have to be inflated away.
 

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Mid term, the higher debts that are being accumulated to pay for all this are going to have to paid for this somehow. Higher tax rates are the obvious one which would have a drag on spending. But not every country is going to do that and americans would revolt if they had to pay for their largesse. So it'll have to be inflated away.
I agree, we have to pay it back, and inflating it away is far less visible than simply hiking taxes.
I don't know all the provincial spending, but I'd be surprised if total COVID spending so far isn't at 30% of GDP.

We haven't even gotten to the municipal bailouts yet. Many cities deferred property taxes, but since municipalities can't take on debt in much of Canada (Ontario and BC at least) There is going to be a very serious problem here.

The total Canadian workforce can't earn enough to pay back the hundreds of billions in additional spending.
We're looking at generational debt here, which is not sustainable.

As much as this is necessary, some people are acting like this is a "one time emergency". But we're going to have another pandemic soon, I'd predict that we'll see something bad pop up within the next few years.
 

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I think anyone who says 'this time its different' hasn't learned anything from the last 10 times/crashes they said that.

I don't think it'll go below 2200 again this year. Whether this rally will continue or whether it will bounce around a bit, I don't know. By end of May, I predict most parts of the US will be back up and running again. Sask is already talking about it for April. For sure spending and prices won't return to the way they were, even by the end of the year. I think some stocks are already overpriced, but many saw massive hits that were not reasonable and are back to reasonable values.
I don't know who's saying "this time it's different" - I'm just saying "Is this a standard recession or is it not? if it is, how severe? Does the market price reflect that?"

I don't know how anyone can look at the "massive hits" and determine whether they were "not reasonable" or vice versa. How do you do it? Isn't it just a complete hunch based on casually reading the news?
 

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Discussion Starter #11
I agree, we have to pay it back, and inflating it away is far less visible than simply hiking taxes.
I don't know all the provincial spending, but I'd be surprised if total COVID spending so far isn't at 30% of GDP.

We haven't even gotten to the municipal bailouts yet. Many cities deferred property taxes, but since municipalities can't take on debt in much of Canada (Ontario and BC at least) There is going to be a very serious problem here.

The total Canadian workforce can't earn enough to pay back the hundreds of billions in additional spending.
We're looking at generational debt here, which is not sustainable.

As much as this is necessary, some people are acting like this is a "one time emergency". But we're going to have another pandemic soon, I'd predict that we'll see something bad pop up within the next few years.
are you suggesting multiple serious waves of Covid19? Or another novel virus?

long term history would probably say this Is a once in a lifetime event,......yet the ease and quantity of international travel has given us SARS, H1N1 and Covid in short order. On a positive note, you have to believe (hope) we will better prepared with testing, PPE, lockdowns, restricted travel. This event should create massive spending akin to (and more than) Defense budgets.
 

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I don't know who's saying "this time it's different" - I'm just saying "Is this a standard recession or is it not? if it is, how severe? Does the market price reflect that?"

I don't know how anyone can look at the "massive hits" and determine whether they were "not reasonable" or vice versa. How do you do it? Isn't it just a complete hunch based on casually reading the news?
This time it IS different.

We have a government mandated shutdown.

The result is that we have record numbers of people bankrupt, and entire major industries (travel, entertainment, rentals & real estate) that are being pushed towards bankruptcies

I think having 25% of workers practically bankrupt is unheard of.
But since it's really an ordered shutdown, I think a recovery can be done "well", but this is really bad.


are you suggesting multiple serious waves of Covid19? Or another novel virus?

long term history would probably say this Is a once in a lifetime event,......yet the ease and quantity of international travel has given us SARS, H1N1 and Covid in short order. On a positive note, you have to believe (hope) we will better prepared with testing, PPE, lockdowns, restricted travel. This event should create massive spending akin to (and more than) Defense budgets.
You forgot MERS, swine flu and several other lower profile potential pandemics.
I think the frequency and speed is increasing.
Also the biggest problem with COVID19 is the asymtomatic spread.
So I am very concerned.

That being said, maybe this time we'll pay attention, but even around Toronto, which got hit hard with SARS saw massive government failure. Our government knew about this in January, and did nothing.

SARS-CoV was bad, SARS-CoV2 a decade later was worse, do you think it's going to take 10 or 100 years for the next one?

I'm also risk adverse, I stocked up in February.
 

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I don't know how anyone can look at the "massive hits" and determine whether they were "not reasonable" or vice versa. How do you do it? Isn't it just a complete hunch based on casually reading the news?
Should regulated utilities have dropped by up to 40%? MSFT, GOOG, AMZN by 25-30%. I don't think so.

I think some people might be letting home country bias come in to play. The poll was about the S&P. It's also an election year down there, so they'll pull out all the stops.
 

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Long way to go back down to 18000 on the DOW. Highly unlikely to happen. Many of the people who are wishing it to happen, wish that they bought it then and now are missing out.

Unfortunately, you just aren't going to get a -40% buying opportunity without a lot of uncertainty.

There is much less uncertainty now. Every day, more things will start opening back up. More things opening than are closing down. This is the positive news that markets are pricing in now.
 

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I was going to wait it out to average down. I elected to stay the course and tell myself that I can't time the market. Thus I bought everything today in my 6-Pack at a sale price from a couple months ago. I am now overweight in the Canadian market and will proceed by adding to my US index e series and International every 2 weeks until everything is back in balance.

I'll let you know how it worked out in 25 years or so.
 

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I think a lot of this is up to the Federal Reserve. This has always (ever since 2009) been a stimulus-driven market, and continues to be.

Federal Reserve balance sheet size was stable around $4.5 trillion for all of 2016 and 2017. Then in 2018/2019 it actually decreased to a bit below $4 trillion.

Then, in recent weeks, the Fed started buying up assets and creating huge amounts of new money. Federal Reserve balance sheet is now up to $6.1 trillion ... enormous money-printing happening today.

Stock markets are severely distorted by this, and have been for a decade. This also creates major hidden risks to stock investment. If the Federal Reserve ever loses control of markets (for whatever reason), then stocks are toast.

20096
 

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Discussion Starter #18
2 weeks ago, the forum voted 22-12 that the bottom has not yet occurred.

any change in feelings with re-opening plans starting to come out?
 

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^
Impossible to say. V bottoms are rare, so most expect a W bottom. I wouldn't be in a rush if you are planning to buy significant amounts. Last time, 08-09 the second bottom was many months after the first bottom. If there is a second bottom there is no way to tell if it will be lower or higher than the first one.
 

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I'm wondering whether the drops will be aligned with reporting of earnings etc. Banks will release their earnings in late May - and most of what I'm reading suggests earnings will be down by half!
 
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