Has the dead cat finished bouncing?

Thrugelmir

What's fundamentally changed since Friday or the Friday before? The future still holds the same uncertainties. Other than hot money speculating on the latest tit bit of news. There's some wild volatility in underlying share prices day to day beneath the index headlines. . 

Sailtheworld

blue_max_3 said:

Sailtheworld said:

6 weeks ago when predictions were being made of a crash it sounded quite imminent to me. Nobody warned me that the falls would come after a completely expected 7 week dead cat bounce. Yes of course we should buy in the troughs but it turns out that we were in a big trough when these predictions were being made.

If the people making these predictions were any good at predicting why didn't they predict the preceding dead cat bounce and make a ton more money. It's as if they're not very good at predicting and are inventing special buzz words as cover. i.e. I would've gotten away with it if it hadn't been for you meddling kids and stupid dog - the Scooby Doo defence - just swap 'kids' and 'dog' with the excuse of the day.

If the stock market was predictable, it would be a money machine! All anyone can do is give a perspective. Some will be more accurate than others. Some may have blind luck. I defy anyone to have all the answers. 
Does normal service resume? Is anyone thinking that the worst figures for GDP in 300 years coming in for Q2 is going to be brushed off, with scant regard?
I'm not saying it won't, of course. But this is now gambling.

It wasn't perspective that was being given 6 - 7 weeks ago it was predictions for steep market falls. They were pretty useless predictions because they didn't give a timeframe but the implication was one of imminence. Now I'm being told that the steep market climbs were expected too - by the same people.

I don't know the answers to your questions of course but, as it turns out, neither did the people who thought they did a couple of months ago. In the main there's people who know they can't predict the future and people who don't know they can't yet. Why gamble on one outcome or another - there's simply no need. Usual disclaimer - this can be safely ignored by those who can predict the future.

blue_max_3

Sailtheworld said:

It wasn't perspective that was being given 6 - 7 weeks ago it was predictions for steep market falls. They were pretty useless predictions because they didn't give a timeframe but the implication was one of imminence. Now I'm being told that the steep market climbs were expected too - by the same people.

I don't know the answers to your questions of course but, as it turns out, neither did the people who thought they did a couple of months ago. In the main there's people who know they can't predict the future and people who don't know they can't yet. Why gamble on one outcome or another - there's simply no need. Usual disclaimer - this can be safely ignored by those who can predict the future.

Totally agree. I'm only cautioning against not factoring in the massive effects of the virus. In all other circumstances, I'd agree with you. Now, whether, when, or if, is a different matter.
Place your bets!

BananaRepublic

blue_max_3 said:

Sailtheworld said:

6 weeks ago when predictions were being made of a crash it sounded quite imminent to me. Nobody warned me that the falls would come after a completely expected 7 week dead cat bounce. Yes of course we should buy in the troughs but it turns out that we were in a big trough when these predictions were being made.

If the people making these predictions were any good at predicting why didn't they predict the preceding dead cat bounce and make a ton more money. It's as if they're not very good at predicting and are inventing special buzz words as cover. i.e. I would've gotten away with it if it hadn't been for you meddling kids and stupid dog - the Scooby Doo defence - just swap 'kids' and 'dog' with the excuse of the day.

If the stock market was predictable, it would be a money machine! All anyone can do is give a perspective. Some will be more accurate than others. Some may have blind luck. I defy anyone to have all the answers. 
Does normal service resume? Is anyone thinking that the worst figures for GDP in 300 years coming in for Q2 is going to be brushed off, with scant regard?
I'm not saying it won't, of course. But this is now gambling.

Just think, if there was an element of predictability to the stock market(s), people could buy into it, wait 30 years, then retire on the gains. Wishful thinking I know. Back to reality ...

blue_max_3

BananaRepublic said:

Just think, if there was an element of predictability to the stock market(s), people could buy into it, wait 30 years, then retire on the gains. Wishful thinking I know. Back to reality ...

Many think you can!
Unless you were being sarcastic...

kinger101

Username999 said:

itwasntme001 said:

Agree with the above comment for the most part.  But it is important to not confuse sociopaths with psychopaths.  The former is significantly more neurotic and likely to commit obvious criminal acts whereas the latter is a lot less neurotic and able to live much more of a "normal" life (although both do share many traits such as low affective empathy).  I would say those in power (at the top) of various corporate and even government organizations are more likely to be psychopaths than sociopaths.  Sociopaths will simply be easily rooted out and will be unable to reach the higher echelons  Also all psychopaths are narcissistic but the converse is not necessarily true.

We also need to distinguish between the real risk takers - those who are running their corporations as founders - to the so called corporate executive who has joined a well established corporation and risen up the ranks.  In both cases you could find psychopaths in positions of power, potentially being a danger to society as a whole.  But I would argue it is the corporate psychopath rather then the founder psychopath that is probably more likely to be a danger.  E.g. the banking industry.

In an ideal world those with narcissistic and psychopathic features in their personality should not be allowed to rise to the top, perhaps by means of some sort of testing run by qualified mental health professionals.  Should hopefully lead to a better society for the long run but may have to be at the expense of the success of any particular organization.

What a load of b...

A strip of tarmac goes into the pub and orders a pint. After serving him, the barman asks if he wants to join his mate in the corner. Sitting in the corner is a strip of red tarmac. The strip of tarmac shakes his head violently: "I'm not going near him" it says, "he's a cyclepath!"

kinger101

port_of_spain said:

I feel a bit responsible for leading the thread astray now.

The cat has landed on a ledge, and is sunning itself, IMHO.

I think he's just stopped to cough up some fur-balls.

BrockStoker

My assertion and that of the person giving their perspective in the youtube video (who makes a better case of the situation), suggest that we are entering uncharted territories.

When have we ever not been in uncharted territory? I didn't realize that before now, our future path had already been mapped out!

Personally I think this thread is a red herring. If we look at sectors individually, there is a wide disparity in performance. In some cases it is (or was) a dead cat bounce, but in others this has been a catalyst (eg tech and healthcare), and these sectors are what have been driving the markets in general I think.

bowlhead99

BrockStoker said:

When have we ever not been in uncharted territory? I didn't realize that before now, our future path had already been mapped out!

Personally I think this thread is a red herring. If we look at sectors individually, there is a wide disparity in performance. In some cases it is (or was) a dead cat bounce, but in others this has been a catalyst (eg tech and healthcare), and these sectors are what have been driving the markets in general I think.

Yes, looking at a cap-weighted index of stocks can be misleading because it depends on the mix of what is in the index at the start. If the bigger components of the FTSE 100 are oil companies and banks which will really dislike low interest rates, low oil prices and a recession, while the biggest players in the S&P500 are Microsoft and Google and Amazon and Facebook who are perhaps more resilient because you still want your software licences and cloud computing and smartphone operating systems and advertising-funded social networks and home delivery retail, you will see a different depth of drop for the two indexes, even if some other industries represented at the top end feature in both indexes (e.g. big pharma and global consumer products groups).

When you look under the skin of what is in the index you find that some industries have been absolutely hammered and some have got off lightly. So in the UK if the biggest things in the index were banks and oil companies, the average business might not be doing as bad as that. Whereas in the US if the biggest companies were software vendors and tech-focused advertisers, the average business across the nation might be doing considerably worse.

As expected, once government support gets announced, the markets bounce back up, but for some industries they are bouncing back because the market realised they didn't need to panic so hard, while in others they have bounced back less far and are sitting there teetering (e.g. Delta in the US and BA over here are both down 60-70% this year and who knows what will happen if global travel does not come back to 'business as usual' levels before the cheap funding runs out; likewise Boeing and Airbus both down 60% in three months; Boeing had a bit of a bounce, Airbus didn't fall so far in the first place).

At the end of the day, the 'sentiment' shown by the direction or percentage change of an index is just a bunch of opinions on individual companies weighted by how much of them you want to put in the index.  MSCI World (just looking at the iShares tracker of it, SWDA) was down 13.4 % YTD at end of April ; but if you take an equal weight MSCI world midcap index which doesn't benefit from a high weighting to Microsoft and Amazon and Apple and Netflix and Google and giant global pharma (e.g. iShares IWFS), it was down 19.3%.  Anyone doing actual analysis of what they want to invest in will form opinions based on what are the prospects for that company and industry, not just compare a share price to some index movement to see if it's fallen 'the right amount' and is therefore cheap or not. 

Maybe it's true that the 'uncharted territory' is a misnomer because the territory is never fully charted. But there are clearly lots of unknowns at the moment because there is unprecedented (in recent times) government policy response to unusual events and we don't quite know how government, business and consumer attitudes might change as they all react with each other over an unknown timescale.  To get a handle on whether a share price makes sense is quite difficult, but people have always had a go at 'forecasting stuff', which informs markets. Some sectors will likely be easier to map out than others.

BananaRepublic

blue_max_3 said:

BananaRepublic said:

Just think, if there was an element of predictability to the stock market(s), people could buy into it, wait 30 years, then retire on the gains. Wishful thinking I know. Back to reality ...

Many think you can!
Unless you were being sarcastic...

What a scurrilous suggestion. 🤣 Some people equate the stock market to a casino due to obvious misunderstandings. 

I think the chaps in red braces have figured out that much of the economy will bounce back, but some sectors will take a big hit. The latter includes the leisure industry, including bars and restaurants, but I don’t think they were in favour with the city. Competition was fierce with many struggling to survive. A clear out might help the survivors.