Posted on 03/02/2020 6:24:32 AM PST by Bon mots
After the worst week on Wall Street since 2008, investors are waking up to the all-too-familiar news of more coronavirus cases worldwide, and falling global stocks. The second U.S. death from the virus was reported on Sunday. Asian and European stocks started Monday positively — as central banks around the world sparked hopes of interest-rate cuts. But they moved into the red after an OECD report warned that the virus economic impact was “severe” and putting “the world economy at risk.” U.S. futures followed suit on a volatile morning.
(Excerpt) Read more at marketwatch.com ...
EXACTLY. I am convinced what happened last week was Goldman Sachs and company shedding shares of its clients, while holding all their own. The fact the market is up today with terrible virus news is testament to myself that equity markets are irrational. Financial news works for the interests of Wall Street, wittingly and unwittingly. CNBC is by far the worst and I’m surprised anyone watches that fraud network anymore.
Always buy when the blood is on the floor. Incraments if you want to catch a possible lower point. But now gives you a very nice return when this snaps back.
How do you invest in a market that rewards Netflix with 200 times earnings?
Agree with you and your chart. We’re just past ‘bull trap’ at the moment. This is how you’ll know when it’s ‘capitulation’... the dividend yields on bullet-proof staples like Coca-Cola will start to get crazy high... like 6% or higher.
You can see I am not much of a gambler, but I do like to devote a small share of profit taking to chasing the next Netflix or Shopify, knowing that most of the time I am going to lose on these. But that one win will more than make up for it.
Motley Fool doesn't advertise their losses like they do their gains, but you can see what they own by buying even one share of TMFC. It is cheaper than buying their newsletter and does perform modestly better than the S&P 500. Their top holdings are mostly companies like Microsoft, Home Depot and Apple. Your superstars of tomorrow (SWKS?) rank way down the list.
I, for one, don't invest in individual stocks anymore...only in sectors and index funds (exception - I did buy MSFT calls on Friday because I thought MSFT was pretty much a bellweather). If you watch a sector or index fund long enough, you develop a feel for how it performs (i.e., how the market treats it).
One point for folks who like to make money in steep market downturns like the one we just had is to look at the market as a person. It is like a hysterical woman or perhaps a Barney Fife type of man or even perhaps like a herd of excitable animals.
In other words, the market (i.e., investors) tend to overreact to things like the coronavirus. I would suggest learning to trade options with a small amount of money until you get the hang of it. Trade fees are cheap (I think my MSFT call option trade fee was 62 cents to buy in and the same to sell -- I trade with Schwab).
BTW, Netflix, as you probably know, is a liberal company and has really crappy liberal content. I used to subscribe to Netflix but hated its content so much I cancelled.
A liberal investor might know how to trade Netflix, but as a conservative, it is not something I understand or want to understand.
I think the market will be back up in a few months
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A lot of people were saying that the rebound today is a glitch, and we should turn down again, particularly if C19 news gets worse.
I’m not worried about my 401K. I’m not going to be retiring any time soon.
But if I do the stocks, it will be more for my entertainment, like going to the casino. The sporting side of me wants to wait until it has fully tanked. It’s so hard to determine if the corona thing is done making bad news but it certainly doesn’t appear to be done.
Two of the biggest point gains in history in 2008 were followed by an additional 30% decline over the next several months, until the bottom in March of 2009.
Anything can happen here. Today was wonderful, but it was just a single day.
Yes good point. :)
I have to say I’m a dinosaur that believes in PE ratios which means I don’t understand markets these days in equities. I agree, Netflix is a liberal company. I made some bad plays so I am certainly no expert on anything.
There use to be theory that stock markets are efficient and price economic reality into their prices. I now believe stock markets are completely irrational.
That said, for the most part I invest in segments and index etf's like QQQ and XLK (among others), so I don't worry about whether individual stocks are overpriced.
An exception to that is that I increasingly trade options and that keeps my focus on the very short term. Even then my favorite options are based on sector etfs so that I can eliminate the worry about individual companies.
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