Autumn Stock Market Crashes / Second wave

Sebo027

London7766551 said:

AlanP_2 said:

London7766551 said:

I think it will happen at some point next year now. Everything is artificial with money being printed and the full effect has not hit yet.

What will happen next year? A 20,30,40,50,60,70% drop in global equity values?

Are you backing your hunch by shorting the index / indexes you think will fall?

I won't pretend to understand the global markets, so this is just my humble opinion.  But it seems to me, that next year the reality of so many losing their jobs, less spending and further businesses going to the wall, will result in a lot of people that can't pay for anything. The markets will come to see this and panic (rightly so). I'd say there will be about a 20%-30% drop in March or so 2021. Possible 50%-60% over the next few years if the virus runs out of control and there is no vaccine for years and years.

Most developed nations have been hit hard and fast by COVID in the first quarter of the year. Obviously testing capability, capability in public health organisations, reporting of figures (including political motivations) can skew the data or trends. That being said, COVID is currently ripping through the developing nations as the EU, UK and generally speaking most developed Asian economies, have imposed a variety of virus inhibiting social measures. The data shows that this is all working to suppress spread of the virus. Governments continue to increase testing capacity and have had time to prepare for the worst of those affected i.e. hospitalized and on ventilators. You would think that so long as localised lock downs are implemented in response to cluster outbreaks and the public remains mostly obedient the developed world should be able to bumble along until a vaccine is ready, manufactured and distributed. And things are relatively positive on that front, all things considered. 

thegentleway

DiggerUK said:

EdGasketTheSecond said:

I never suggested gold as a short for anything. It is a good asset class to own in the current macro environment.........

You are correct, you have never suggested gold is a short play. In the populist understanding of a short play, buying gold is not a short. But in the greater picture "it's a short Jim" because it's a short against everything else out there..._

Gold is a speculative hedge, not a short.

PS: I think you mean popular as populist relates to the politcal movement of championing ordinary people over the ruling elite.

bowlhead99

DiggerUK said:

EdGasketTheSecond said:

I never suggested gold as a short for anything. It is a good asset class to own in the current macro environment.........

You are correct, you have never suggested gold is a short play. In the populist understanding of a short play, buying gold is not a short. But in the greater picture "it's a short Jim" because it's a short against everything else out there..._

In the populist understanding, the word 'short' either refers to length (measuring little along its greatest dimension, or from end to end) or to be low on supplies of, running out of something (hungry because I'm short of food).

The financial terminology comes from an evolution of the latter, when you 'sell short' (e.g. a Microsoft share or an index of stocks) you are selling something without even owning enough of it to meet the delivery obligation, requiring you to borrow it from elsewhere to make good delivery or to have credit terms in your favour; with the intention of buying it back later for a lower price to take your ownership back up from negative to zero. 

I'm not quite sure how buying gold is a 'short' in the big picture, if you are not short of anything. This sentiment can only come from the context that being long gold may produce a similar result to being short stocks or short bonds in certain market conditions due to an inverse correlation of values from time to time. However, as gold can also move in the same direction as other asset values from time to time, it's not really a 'short against everything else out there'.  If gold was a short against US equities for example, how come both the gold price in dollars and the capital value of the Dow Jones Industrial Average are both up 70% over the last five years?

DiggerUK

bowlhead99 said:........ 

I'm not quite sure how buying gold is a 'short' in the big picture, if you are not short of anything........

Seeing as how Digger Mansions have all our eggs in one basket, gold, we are in effect calculating that everything else will lose value and gold won't. We haven't bet against one particular market, or sector, or currency. We've bet against the whole lot, if that's not the ultimate short Jim, I don't know what is.

And just like in the real world, if your short bet backfires, it backfires big time. With Digger Mansions it's just not a short on a one to one basis like the players betting against the housing market in 'The Big Short', we've shot the pot against everything on offer.

In a market with cats bouncing everywhere, there's also more than one way to short them..._

EdGasketTheSecond

There's a difference between choosing what you perceive as the best investment and shorting  though. You seem confused.

Sailtheworld

DiggerUK said:

bowlhead99 said:........ 

I'm not quite sure how buying gold is a 'short' in the big picture, if you are not short of anything........

Seeing as how Digger Mansions have all our eggs in one basket, gold, we are in effect calculating that everything else will lose value and gold won't. We haven't bet against one particular market, or sector, or currency. We've bet against the whole lot, if that's not the ultimate short Jim, I don't know what is.

You're long gold. Short nothing.

The_Green_Hornet

This thread is long on fiction and short on facts.

bigadaj

Sailtheworld said:

DiggerUK said:

bowlhead99 said:........ 

I'm not quite sure how buying gold is a 'short' in the big picture, if you are not short of anything........

Seeing as how Digger Mansions have all our eggs in one basket, gold, we are in effect calculating that everything else will lose value and gold won't. We haven't bet against one particular market, or sector, or currency. We've bet against the whole lot, if that's not the ultimate short Jim, I don't know what is.

You're long gold. Short nothing.

Definitely long john silver.

London7766551

The_Green_Hornet said:

This thread is long on fiction and short on facts.

mystic_trev

London7766551 said:

The_Green_Hornet said:

This thread is long on fiction and short on facts.

mystic_trev’s portfolio is up nearly 20% this year, thanks to much crystal ball gazing!