Is this a bear market?

Gadfium

The virus hasn't even started in America. Read this:

https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56

And then look closely at this:

America is going to get absolutely hammered by this virus. The falls that we've seen so far are only a taster of what's to come.

Prism

It may officially have been a bear market it hasn't felt like one partly due to the drop in the pound and strength of the dollar, much like in 2008. My equity portfolio dropped around 20% for a couple of days but is mostly hovering around -15% from ATH. It certainly hasn't been a major buying opportunity yet (not that I have spare cash I am willing to put in). Who knows what the future holds - anyone predicting up or down is just guessing.  
Oh, and before this virus markets were not overpriced and were not due a correction. They were pricing simply at the going rate which is always right.

BrockStoker

When 30, 40, 50% of people are found to have antibodies and can safely go back to work without risk to themselves or others, the economy will start to recover fast.

Covid-19 is an RNA virus. RNA is only a single strand of genetic code, unlike DNA which is double strand, giving it twice the redundancy/resistance to mutation.

So the danger here is that it mutates, and we are back to square 1. It has already mutated once, so we have two different strains to deal with. If a 3rd mutation emerges, this could carry on much longer.

While it would be nice to call bottom here, I'd be very weary of doing so due to the mutation risk. Personally I've been buying at these low levels, but I do have plenty of cash should markets continue on a downward trajectory.

Bravepants

Personally I hope the bottom comes next February when the fixed term cash in my SIPP is free from lockdown!

Kendall80

torrence said:

Q1 earnings are expected to be the worst on record, and Q2 is expected to be even worse. The markets know and it's already priced in.

That the markets have already priced news in is a regular comment however they never fail to surprise.

Sebo027

BrockStoker said:

When 30, 40, 50% of people are found to have antibodies and can safely go back to work without risk to themselves or others, the economy will start to recover fast.

Covid-19 is an RNA virus. RNA is only a single strand of genetic code, unlike DNA which is double strand, giving it twice the redundancy/resistance to mutation.

So the danger here is that it mutates, and we are back to square 1. It has already mutated once, so we have two different strains to deal with. If a 3rd mutation emerges, this could carry on much longer.

While it would be nice to call bottom here, I'd be very weary of doing so due to the mutation risk. Personally I've been buying at these low levels, but I do have plenty of cash should markets continue on a downward trajectory.

I read an article the other day that detailed the slightly different variations of the virus. Testing can apparently tell infections apart from different areas, i.e. the virus working it's way across America is different from China, the China variant is different from the Italian, the Italian different from the British. But I'm not sure what that means - I doubt it's as serious as it looked as so far only "two strains" have been announced in the papers. It's worth also remembering that the ideal virus will pass from person to person with minimal symptoms and will not cause death in the host. The virus could yet mutate to a more benign form, perhaps even largely symptom-less, as time goes on. 

Grandst2

If you adjust for inflation and sterling devaluation the ftse 100 has already hit 2008 lows. 

Thrugelmir

torrence said:

Q1 earnings are expected to be the worst on record, and Q2 is expected to be even worse. The markets know and it's already priced in.

Could you explain how the market can price in what it doesn't yet know?  

ruperts

Gadfium said:

The virus hasn't even started in America. Read this:

https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56

And then look closely at this:

America is going to get absolutely hammered by this virus. The falls that we've seen so far are only a taster of what's to come.

You could argue that if they are to get absolutely hammered it'll be because they've not shut down the economy, and if they've not shut down the economy then there's less reason for the stock market to fall. 

kinger101

BrockStoker said:

When 30, 40, 50% of people are found to have antibodies and can safely go back to work without risk to themselves or others, the economy will start to recover fast.

Covid-19 is an RNA virus. RNA is only a single strand of genetic code, unlike DNA which is double strand, giving it twice the redundancy/resistance to mutation.

So the danger here is that it mutates, and we are back to square 1. It has already mutated once, so we have two different strains to deal with. If a 3rd mutation emerges, this could carry on much longer.

While it would be nice to call bottom here, I'd be very weary of doing so due to the mutation risk. Personally I've been buying at these low levels, but I do have plenty of cash should markets continue on a downward trajectory.

Not quite how it works.  For one, many RNA viruses are double stranded.  And some DNA viruses are single stranded.  But replication of DNA or RNA uses only a single stranded template.  With DNA, errors in the newly synthesized stand are checked against the template on-the-fly by the DNA polymerase.  It doesn't reference the other unwound strand (which is being independently replicated).  RNA polymerases don't have this proofreading ability, and that's the main reason for their much higher mutation rate.  Which is 1-3 orders of magnitude higher than a dsDNA virus.