Has the dead cat finished bouncing?

Bravepants

cfw1994 said:

Bravepants said:

Hmmm..rising CV-19 cases in the US, the big four tech companies (Apple, Amazon, Google, Facebook) under investigation for monopoly, astonishingly good (for companies in the right sectors) -quarter results coming in, increasing lockdown in the UK....what could possibly go wrong?

There....edited for accuracy!
Covid hasn’t gone away....and parts of the world are struggling with rising cases.
Does that mean the economy is screwed?  

I’m not so sure.   

It does, as you say, mean sporadic lockdowns recurring, & who knows what winter will bring for us....but I remain an optimist at heart: human nature makes us resilient, when one industry struggles (E.g., ICE car), another one emerges (E.g., EV plus renewable energy).
I can certainly envisage a bumpy ride for 12-18 months, but my mid- to long-term view is that this is a great time to be investing.  Could be wrong, of course....

og, and on those investigations.....why is it there is only ONE Monopolies Commission?  

I wasn't just referring to the "big four's" quarterly results...rather all others too...Royal Dutch Shell, for example, has taken a beating - how many funds remain weighted with oil companies, while those companies figure out how to migrate to other energy sources than fossil fuels. I agree with you about the long term and indeed I'm in it for the long term...but short term could be a shocker for some.  

Prism

Bravepants said:

cfw1994 said:

Bravepants said:

Hmmm..rising CV-19 cases in the US, the big four tech companies (Apple, Amazon, Google, Facebook) under investigation for monopoly, astonishingly good (for companies in the right sectors) -quarter results coming in, increasing lockdown in the UK....what could possibly go wrong?

There....edited for accuracy!
Covid hasn’t gone away....and parts of the world are struggling with rising cases.
Does that mean the economy is screwed?  

I’m not so sure.   

It does, as you say, mean sporadic lockdowns recurring, & who knows what winter will bring for us....but I remain an optimist at heart: human nature makes us resilient, when one industry struggles (E.g., ICE car), another one emerges (E.g., EV plus renewable energy).
I can certainly envisage a bumpy ride for 12-18 months, but my mid- to long-term view is that this is a great time to be investing.  Could be wrong, of course....

og, and on those investigations.....why is it there is only ONE Monopolies Commission?  

I wasn't just referring to the "big four's" quarterly results...rather all others too...Royal Dutch Shell, for example, has taken a beating - how many funds remain weighted with oil companies, while those companies figure out how to migrate to other energy sources than fossil fuels. I agree with you about the long term and indeed I'm in it for the long term...but short term could be a shocker for some.  

One of the reasons that I don't like the VLS range. Way too much emphasis on cyclical industries like oil and banking. I am not sure why people keep flooding to it given its years of underperformance. 

As time goes on the march drop is beginning to just look like a minor blip on my charts. Maybe there is worse to come but for the moment I can barely remember the cat at all. 

Thrugelmir

Seldonista said:

Thrugelmir said:

Prism said:

ProDave said:

Time to re assess the elastic properties of the cat?

The last month the stock markets have just about marked time.  Now they seem very much down.

My view. the dead cat bounce is over.  Reality is setting in. As lockdowns ease, cases are rising. I fear lockdowns will be back very soon.  If so I fear there will be no more government support.

The reality of the scale of devastation to the economy is starting to sink in pushing shares down.

I now feel the crash will resume downwards.

Do others feel the same?

It depends which markets you mean. The US markets are still very much rising, up about 4% in the last month. We haven't seen those gains as the pound is up about 5% vs the dollar. Then just when it looks like its running out of steam, tonight the big tech companies reported and Apple is up 6%, Google 1%, Amazon 5% and Facebook 7%. Emerging markets are up about 4% this month. It doesn't look over just yet.

As long as the Fed keeps pumping money into the economy the stock market will continue to rise. 

Thrugelmir are you shorting anything?

No. Not my speciality.  

Thrugelmir

fiisch said:

Unless someone pops up next week with a vaccine, or governments declare an alternative strategy to battling Coronavirus other than lockdown,

That's the root of the issue. There won't be a magic bullet vaccine anytime soon nor do have Governments have the solution. The only real answer lies in every individuals own hands. As has been shown on many occassions too many people simply aren't willing to act in the interests of the community as a whole. Which wastes the efforts of the majority. 

fiisch

Seldonista said:

fiisch said:

I'm thinking, as someone with a propensity to gamble, it has got to be worth a punt and sell some of my modest SIPP holding tomorrow morning when the markets open.

Unless someone pops up next week with a vaccine, or governments declare an alternative strategy to battling Coronavirus other than lockdown, the market is surely only going to move one way over the next few weeks?  Therefore the potential gain from selling and buying back in at a later date seems to me to heavily outweigh the possible benefits of staying invested.

Very tempted to sell 50% of my largest SIPP holding (Vanguard 100) to try and profit from what I think is an impending crash, but the old adage of never try to time the market is ringing loudly in my ears.  One to sleep on I think...

Do you trust yourself to know when to get back in? Stock returns are more correlated with last year's rainfall than they are with people's opinions (they actually are as well).

"When it drops"

Fair point, and I certainly can't hope to buy back in at the bottom, but at 34, I thought selling was a risk worth taking (plumped for 70% sale of VG holding this morning in my SIPP only).  Will either learn a valuable lesson or thank my future self... time will tell!  I think potential upside outweighs the negative, and I am still invested in other funds/via my ISA.

I did briefly consider investing in SUK2 (Legal & General fund for shorting the market), but realised my gambling nature was getting the better of me...!

Sailtheworld

ProDave said:

Time to re assess the elastic properties of the cat?

The last month the stock markets have just about marked time.  Now they seem very much down.

My view. the dead cat bounce is over.  Reality is setting in. As lockdowns ease, cases are rising. I fear lockdowns will be back very soon.  If so I fear there will be no more government support.

The reality of the scale of devastation to the economy is starting to sink in pushing shares down.

I now feel the crash will resume downwards.

Do others feel the same?

Dave, there was no dead cat bounce. The markets went down; lots of people predicted they'd fall further and, instead, they went up - a lot. The dead cat bounce is / was a nice little story for people who can't admit to being wrong because they're probably a bit too old for mummy to stroke their hair and tell them they're a special little soldier.

The dead cat bounce has lasted for four months now - that's not a dead cat bounce - that's just being plain wrong.

If someone's prediction was plain wrong four months ago what value should be placed upon the same prediction being made today. Given they don't even have the self-awareness to realise they were wrong four months ago I'd suggest zero.

I'd rather listen to someone who called the March crash and the subsequent market rally than someone who called two of the last one crashes - at the very least they're a coin flip ahead.

Sailtheworld

fiisch said:

Seldonista said:

fiisch said:

I'm thinking, as someone with a propensity to gamble, it has got to be worth a punt and sell some of my modest SIPP holding tomorrow morning when the markets open.

Unless someone pops up next week with a vaccine, or governments declare an alternative strategy to battling Coronavirus other than lockdown, the market is surely only going to move one way over the next few weeks?  Therefore the potential gain from selling and buying back in at a later date seems to me to heavily outweigh the possible benefits of staying invested.

Very tempted to sell 50% of my largest SIPP holding (Vanguard 100) to try and profit from what I think is an impending crash, but the old adage of never try to time the market is ringing loudly in my ears.  One to sleep on I think...

Do you trust yourself to know when to get back in? Stock returns are more correlated with last year's rainfall than they are with people's opinions (they actually are as well).

Fair point, and I certainly can't hope to buy back in at the bottom, but at 34, I thought selling was a risk worth taking (plumped for 70% sale of VG holding this morning in my SIPP only).  Will either learn a valuable lesson or thank my future self... time will tell!  I think potential upside outweighs the negative, and I am still invested in other funds/via my ISA.

At 34 I'd be concentrating on increasing my savings rate. That's what your future self will thank you for in 20 years time. Your future self will wonder why you expended so much headspace and took additional risk for what will look like laughably small sums of money in a couple of decades.

MaxiRobriguez

Sailtheworld said:

ProDave said:

Time to re assess the elastic properties of the cat?

The last month the stock markets have just about marked time.  Now they seem very much down.

My view. the dead cat bounce is over.  Reality is setting in. As lockdowns ease, cases are rising. I fear lockdowns will be back very soon.  If so I fear there will be no more government support.

The reality of the scale of devastation to the economy is starting to sink in pushing shares down.

I now feel the crash will resume downwards.

Do others feel the same?

Dave, there was no dead cat bounce. The markets went down; lots of people predicted they'd fall further and, instead, they went up - a lot. The dead cat bounce is / was a nice little story for people who can't admit to being wrong because they're probably a bit too old for mummy to stroke their hair and tell them they're a special little soldier.

The dead cat bounce has lasted for four months now - that's not a dead cat bounce - that's just being plain wrong.

If someone's prediction was plain wrong four months ago what value should be placed upon the same prediction being made today. Given they don't even have the self-awareness to realise they were wrong four months ago I'd suggest zero.

I'd rather listen to someone who called the March crash and the subsequent market rally than someone who called two of the last one crashes - at the very least they're a coin flip ahead.

I sold off some stock in February and bought April 1st (mostly tech) - do I count?

My view: Coronavirus unlikely to be going away anytime soon and people's behaviour will shift. More unemployment is coming, hoarding money rather than spending will become the norm, high streets will find it almost impossible to trade. So if you're investing then the indexes will mostly reflect that, so I look with skepticism at most of the indexes - I expect most will be lower in 12 months time and as such I haven't invested in stocks since April, building my cash pile instead, but I did buy a small amount of gold in early May.

There's a couple of indexes I can't really call. The Nasdaq might be fairly priced despite it being expensive by most metrics and recovering the best since March. I thought it was a dead cat bounce but earnings yesterday tell a story, can't ignore that. The other one is the FTSE100, heavy on industrials and banks, hasn't recovered like other markets have. If the virus does dissipate and there isn't a 2nd wave, then the FTSE may outperform, especially if GBP falls with Brexit looming.

But it's a difficult environment for new investment. I'm not really wowed by any opportunities, hence cash stockpiling. 

fiisch

Sailtheworld said:

fiisch said:

Seldonista said:

fiisch said:

I'm thinking, as someone with a propensity to gamble, it has got to be worth a punt and sell some of my modest SIPP holding tomorrow morning when the markets open.

Unless someone pops up next week with a vaccine, or governments declare an alternative strategy to battling Coronavirus other than lockdown, the market is surely only going to move one way over the next few weeks?  Therefore the potential gain from selling and buying back in at a later date seems to me to heavily outweigh the possible benefits of staying invested.

Very tempted to sell 50% of my largest SIPP holding (Vanguard 100) to try and profit from what I think is an impending crash, but the old adage of never try to time the market is ringing loudly in my ears.  One to sleep on I think...

Do you trust yourself to know when to get back in? Stock returns are more correlated with last year's rainfall than they are with people's opinions (they actually are as well).

Fair point, and I certainly can't hope to buy back in at the bottom, but at 34, I thought selling was a risk worth taking (plumped for 70% sale of VG holding this morning in my SIPP only).  Will either learn a valuable lesson or thank my future self... time will tell!  I think potential upside outweighs the negative, and I am still invested in other funds/via my ISA.

At 34 I'd be concentrating on increasing my savings rate. That's what your future self will thank you for in 20 years time. Your future self will wonder why you expended so much headspace and took additional risk for what will look like laughably small sums of money in a couple of decades.

Savings rate is already high (40% household income) - any higher, and my future self will regret not enjoying more holidays / a nicer car than my current shed etc. when they were younger!

Comparatively laughable small sums today with the benefit of compounding can be significant sums in 2 decades time...  

Malthusian

My view: Coronavirus unlikely to be going away anytime soon and people's behaviour will shift. More unemployment is coming, hoarding money rather than spending will become the norm, high streets will find it almost impossible to trade

The problem with this view is not that it doesn't reflect reality but that it is exactly what everyone was saying in 2009.

The indices reflect the present value placed by the market on the next lifetime's worth of profits generated by listed businesses, not how long it will take people to venture out of their burrows over the next year.

People who try to use securities representing a lifetime's worth of earnings to place proxy bets on the performance of the economy over the next 12 months are destined to remain extremely confused when it doesn't work out the way they expected.