How low can we go?

[Dont_know_mind]

What's the percent likelihood that this is a bear market rally?

My subjective assessment/guess at the current time:
20%

[Dont_know_mind]

I love Howard Marks writing,
from his latest memo:

“The best prophet, Thomas Hobbes once wrote, is the best guesser. That would seem to be the last word on our capacity to predict the future: We can’t.


But it is a truth humans have never been able to accept. People facing immediate danger want to hear an authoritative voice they can draw assurance from; they want to be told what will occur, how they should prepare, and that all will be well.”

Nothing is predestined.

I believe the range of possibilities in the next 24 months on the S&P is 999-5000. I am prepared for either option.

https://www.oaktreecapital.com/insights/howard-marks-memos

Great reading as we all ponder how much to leave on the table and how much to take off.

[bullsdoc]

I love Howard Marks writing,
from his latest memo:

“The best prophet, Thomas Hobbes once wrote, is the best guesser. That would seem to be the last word on our capacity to predict the future: We can’t.


But it is a truth humans have never been able to accept. People facing immediate danger want to hear an authoritative voice they can draw assurance from; they want to be told what will occur, how they should prepare, and that all will be well.”

Nothing is predestined.

I believe the range of possibilities in the next 24 months on the S&P is 999-5000. I am prepared for either option.

https://www.oaktreecapital.com/insights/howard-marks-memos

Great reading as we all ponder how much to leave on the table and how much to take off.

Yeah. Nobody knows. I'd really like to give FutureProof MD an opportunity to discuss somewhere fairly. This is now looking like a disastrous pick. But again, could go back down, don't know. I'd rather get in the market and stay there though.

http://futureproofmd.com/blog/2020/5/19/why-i-liquidated-my-stocks#disqus_thread

[burritos]

My subjective assessment/guess at the current time:
20%

I suppose my question was rhetorical. Just based on history and human behavior/greed(mine including), I think this is a bear market rally. Economy doesn't equal stock market. And rarely is "this time is different". Here's another question, has there ever been a time where the market dropped this low where the recovery didn't include bear market rallies? When those bear market rallies occurred, did the people going through them think they were in recovery mode? Don't get me wrong, I will continue to buy through ups and downs.

[Tim]

Yeah. Nobody knows. I'd really like to give FutureProof MD an opportunity to discuss somewhere fairly. This is now looking like a disastrous pick. But again, could go back down, don't know. I'd rather get in the market and stay there though.

http://futureproofmd.com/blog/2020/5...#disqus_thread

Ben Carlson has an interesting take.

https://awealthofcommonsense.com/2020/06/massive-up-and-down-moves-in-stocks-in-the-same-year-are-more-common-than-you-think/

The recovery since the GFC has been pretty smooth till now. This roller coaster isn’t that unusual.

[Zaphod]

Yeah. Nobody knows. I'd really like to give FutureProof MD an opportunity to discuss somewhere fairly. This is now looking like a disastrous pick. But again, could go back down, don't know. I'd rather get in the market and stay there though.

http://futureproofmd.com/blog/2020/5...#disqus_thread

Theres a ton going on on all sides. UE and economic hits bigger, faster and more coordinated than ever before, the same holds true with the monetary and fiscal response of worldwide economies.

Whats important is how long the effects last and how fast we bounce or not, and of course what the next couple qtrs of earnings say. If they continue on a decent trajectory it could plausibly hold and even scream higher. If not, or worse things deteriorate, it sets up another unprecedented drop and furious sell off.

Agree with Dont know mind that a wide range of possibilities exist.

Only great thing Im seeing is that bonds have retreated making them much more attractive, and the higher stocks go, the less room they have for things not to go perfectly and sets up a better r/r scenario.

It looks like FutureProof is only down 10% or so from where they sold, not the worst thing. Though Im a firm believer if you missed it prior, and are in a big draw down you're much better off holding than doing anything else. Especially if its in an uptrend at that point, let it ride, if you're really worried a trailing stop works nice or a limit that you readjust later on. Those have risks as well but you might capture additional upside.

[FIREshrink]

I agree in the next five years stocks could be down 65% or up 100%. But that's true any year. Sentiment seems unusually detached from reality but you cannot underestimate the impact of central banks around the world throwing trillions of dollars at the stock and bond markets in a coordinated, unprecedented effort to stave off catastrophe. Mission accomplished? But can they keep the spigots going forever?

[burritos]

I agree in the next five years stocks could be down 65% or up 100%. But that's true any year. Sentiment seems unusually detached from reality but you cannot underestimate the impact of central banks around the world throwing trillions of dollars at the stock and bond markets in a coordinated, unprecedented effort to stave off catastrophe. Mission accomplished? But can they keep the spigots going forever?

Why can't they? Changing 0's and 1's so that we chase an illusory carrot to prevent social collapse is an easy choice. Does it really matter if debt is 20 trillion or 100 trillion so long as most people are fed, clothed, and housed?

[CordMcNally]

Yeah. Nobody knows. I'd really like to give FutureProof MD an opportunity to discuss somewhere fairly. This is now looking like a disastrous pick. But again, could go back down, don't know. I'd rather get in the market and stay there though.

http://futureproofmd.com/blog/2020/5...#disqus_thread

It looks like FutureProofMD is just another person that knows what the best play was/is but they just couldn't help themselves. The biggest fear I would have by doing something like this is it will cause me to make future bad decisions. For the golfers out there, you ever hit your drive into the woods and that makes you think you need to take more chances to try to make up the strokes instead of punching it out? Instead of having a chance to save par or make bogey you end up with a triple bogey. Yeah, that'd be me in the stock market. Once you make a bad decision, the pressure builds to try to make an even better decision to recoup losses.

[burritos]

It looks like FutureProofMD is just another person that knows what the best play was/is but they just couldn't help themselves. The biggest fear I would have by doing something like this is it will cause me to make future bad decisions. For the golfers out there, you ever hit your drive into the woods and that makes you think you need to take more chances to try to make up the strokes instead of punching it out? Instead of having a chance to save par or make bogey you end up with a triple bogey. Yeah, that'd be me in the stock market. Once you make a bad decision, the pressure builds to try to make an even better decision to recoup losses.

If I HAD to bet with a gun to my head, I think the market is going to go back down. Haven't sold though and I'll just be buying q2 weekly like I have for 20 years(q monthly when i was a resident). Just painful to buy at these returning highs when we're likely going down again. Then it won't be so painful on the buy side, but it will be horrific at the watching-the-account balance side.

[CordMcNally]

If I HAD to bet with a gun to my head, I think the market is going to go back down. Haven't sold though and I'll just be buying q2 weekly like I have for 20 years(q monthly when i was a resident). Just painful to buy at these returning highs when we're likely going down again. Then it won't be so painful on the buy side, but it will be horrific at the watching-the-account balance side.

I agree. It's going to go back down again but the long term trend will still be up. The problem with those who got out are now getting FOMO'd and many will likely get back in right before it drops again. That may be enough to completely ruin one's psyche long term and they'll never be able to get back on the buy and hold train.

[bullsdoc]

I agree. It's going to go back down again but the long term trend will still be up. The problem with those who got out are now getting FOMO'd and many will likely get back in right before it drops again. That may be enough to completely ruin one's psyche long term and they'll never be able to get back on the buy and hold train.

That's exactly the problem. The agony of when to get back in. Now you need basically a 10% drop to get back to even. So do you get back in at 5% down and just call that lost 5% water under the bridge? And if it goes up another 10% - and I wouldn't be surprised at all if some good vaccine news, etc. is released - well now you're quite behind and who knows what sort of gains the market will bring in future years. I doubt it will be what you could have gotten staying in at S&P 2900

[Tangler]

What's the percent likelihood that this is a bear market rally?

No one knows. I worry about a big second (& third) wave of virus but fortunately I have been wrong about that this so far.
I don’t understand the market.
I have been lucky so far but will try to ignore mr market unless he does something insane (>20% drop) and in that case I will buy a little extra stock to keep AA 70:30.
otherwise, I need to ignore it.
However, I do not see how it keeps going up.
Things to me seem bleak, but I am often wrong.
If pushed for a guess I would say good chance the market drops significantly.

[Tim]

Anyone think this is the “Final Top”! Never to be achieved again?
Crickets!

[burritos]

No one knows. I worry about a big second (& third) wave of virus but fortunately I have been wrong about that this so far.
I don’t understand the market.
I have been lucky so far but will try to ignore mr market unless he does something insane (>20% drop) and in that case I will buy a little extra stock to keep AA 70:30.
otherwise, I need to ignore it.
However, I do not see how it keeps going up.
Things to me seem bleak, but I am often wrong.
If pushed for a guess I would say good chance the market drops significantly.

Any thoughts of how the market will react to a Trump re-election vs Biden election? Or does it just matter if there's a second spike? I think the first pass culling of the herd has been significant and a second spike will just be a dead cat bounce at best.