Covid crash #2 started

itwasntme001

Vaccine or not, some of these names which have done so well were always due some sort of pull-back.  So far these names are still way ahead for the year.  I agree to some extent that the ongoing digitalization trends have been brought forward and thus so to have the stock performances of Amazon and the like, however that does not mean they are fully valued by any means although it may mean they will eventually be fully valued sooner than if the pandemic never happened.

Amazon is up 50% YTD and presumably you would not really hold Amazon at $2k for "only" a 50% gain but instead you would hold for a long term compounded return many times the 50% gain (if that is indeed your view).

Thrugelmir

masonic said:

Thrugelmir said:

masonic said:

adonis10 said:

masonic said:

Thrugelmir said:

masonic said:

Alexland said:

Another total bloodbath in the markets today. It's relentless. Am starting to wonder if we invested above our volatility tolerance as I haven't a clue how we are going to spend all this money. We will be hiding behind the sofa pretending to be out when the wealth managers come knocking on the door. Some days it would have been better to just stay in bed. The warning signs were flashing and we just kept regularly contributing through the dips like idiots. Should have taken action earlier to cut our gains. So many regrets...

Will this ever end? I can't believe I checked the markets this evening, ruined my day. I won't sleep a wink tonight

Nasdaq closed down 1.5%.  Not everybody will be rejoicing.  

Which way will the herd stampede tomorrow ? 

Yes, the recent news is not good for all sectors, tech stocks that got a Covid boost, gold, etc. That's the danger in having a knee-jerk reaction to previous events and taking radical action like moving everything into a single sector you consider a safe haven.

I'm sure the market has overreacted to some extent and will pull back, but those who will be most disappointed are the ones positioned for the demise of this dead-cat bounce and a fall to March levels, or *much* lower.

Why would anyone think it would fall to March levels? How would that even be possible now that there is a vaccine, surely in covid terms, those days are gone (obviously the future will hold other events that will tank the market)?

Good question, I don't know if anyone is willing to come out and admit they still believe that, but once emotionally invested to an outcome, it is difficult to let it go.

Playing devils advocate, it is of course possible, we now have Minkvid-20 (or as Trump would call it, the Denmark virus), and it seems likely the Pfizer vaccine and others would be ineffective against that owing to a mutation in a gene encoding the spike protein. Further such zoonotic-mediated mutation is possible, as is natural mutation that would render vaccines ineffective against new strains. The other argument is that the "true" economic impact of the past 9 months, and likely next 6-12 months, has been swept under the carpet and not reflected in market valuations. Channelling my inner Ed Gasket, we are heading for a period of Weimar hyperinflation where cash, bonds, equities etc will all devalue and only those holding gold and silver will escape unscathed. As soon as the general population realises this, there will be an unprecedented flight to safety and markets will tank BIG TIME.

I feel dirty now.

If companies fail to deliver the expectations placed on them by investors. Then markets could easily fall back sharply. Only takes a few bad financial results to translate into a broader market sell off.  As investors will take fright. High frequency retail trading does appear to be making for more volatile markets in some stocks and reflecting in indices generally.

Yes, a correction or crash could come along at any time, as is always the case, but the notion adonis10 was regarding with complete disbelief was that a crash could now take us back to March lows, or much lower. The FTSE World index is now about 38% above the March low, so would need to fall by just over 30% to reach it again, which is a slightly larger drop than the original Covid crash. Not impossible, but typically a once in a generation event. 

We all have to accept it is something that could happen as an extreme possibility, but to repeatedly sell all of your investments and sit in cash every time there is a 5% correction, or to have sold out near the March lows and waited patiently for a much lower point to buy back in is perhaps not the most rational of investment strategies.

Volatility is certainly higher now than during recent years, where markets have been eerily calm in general. These times don't strike me as particularly turbulent though, compared with those further back in history - especially around significant events. March itself was pretty exceptional, though.

Discounting the tech space there have been some other astounding share movements since the lows of March.  I doubt many retail investors who trade indexes or certain ETF's realise how far markets have polarised since. There's a growing disconnect to the actual companies underlying financal performance. Value investing is coming back into vogue. 

csgohan4

Thrugelmir said:

masonic said:

Thrugelmir said:

masonic said:

adonis10 said:

masonic said:

Thrugelmir said:

masonic said:

Alexland said:

Another total bloodbath in the markets today. It's relentless. Am starting to wonder if we invested above our volatility tolerance as I haven't a clue how we are going to spend all this money. We will be hiding behind the sofa pretending to be out when the wealth managers come knocking on the door. Some days it would have been better to just stay in bed. The warning signs were flashing and we just kept regularly contributing through the dips like idiots. Should have taken action earlier to cut our gains. So many regrets...

Will this ever end? I can't believe I checked the markets this evening, ruined my day. I won't sleep a wink tonight

Nasdaq closed down 1.5%.  Not everybody will be rejoicing.  

Which way will the herd stampede tomorrow ? 

Yes, the recent news is not good for all sectors, tech stocks that got a Covid boost, gold, etc. That's the danger in having a knee-jerk reaction to previous events and taking radical action like moving everything into a single sector you consider a safe haven.

I'm sure the market has overreacted to some extent and will pull back, but those who will be most disappointed are the ones positioned for the demise of this dead-cat bounce and a fall to March levels, or *much* lower.

Why would anyone think it would fall to March levels? How would that even be possible now that there is a vaccine, surely in covid terms, those days are gone (obviously the future will hold other events that will tank the market)?

Good question, I don't know if anyone is willing to come out and admit they still believe that, but once emotionally invested to an outcome, it is difficult to let it go.

Playing devils advocate, it is of course possible, we now have Minkvid-20 (or as Trump would call it, the Denmark virus), and it seems likely the Pfizer vaccine and others would be ineffective against that owing to a mutation in a gene encoding the spike protein. Further such zoonotic-mediated mutation is possible, as is natural mutation that would render vaccines ineffective against new strains. The other argument is that the "true" economic impact of the past 9 months, and likely next 6-12 months, has been swept under the carpet and not reflected in market valuations. Channelling my inner Ed Gasket, we are heading for a period of Weimar hyperinflation where cash, bonds, equities etc will all devalue and only those holding gold and silver will escape unscathed. As soon as the general population realises this, there will be an unprecedented flight to safety and markets will tank BIG TIME.

I feel dirty now.

If companies fail to deliver the expectations placed on them by investors. Then markets could easily fall back sharply. Only takes a few bad financial results to translate into a broader market sell off.  As investors will take fright. High frequency retail trading does appear to be making for more volatile markets in some stocks and reflecting in indices generally.

Yes, a correction or crash could come along at any time, as is always the case, but the notion adonis10 was regarding with complete disbelief was that a crash could now take us back to March lows, or much lower. The FTSE World index is now about 38% above the March low, so would need to fall by just over 30% to reach it again, which is a slightly larger drop than the original Covid crash. Not impossible, but typically a once in a generation event. 

We all have to accept it is something that could happen as an extreme possibility, but to repeatedly sell all of your investments and sit in cash every time there is a 5% correction, or to have sold out near the March lows and waited patiently for a much lower point to buy back in is perhaps not the most rational of investment strategies.

Volatility is certainly higher now than during recent years, where markets have been eerily calm in general. These times don't strike me as particularly turbulent though, compared with those further back in history - especially around significant events. March itself was pretty exceptional, though.

Discounting the tech space there have been some other astounding share movements since the lows of March.  I doubt many retail investors who trade indexes or certain ETF's realise how far markets have polarised since. There's a growing disconnect to the actual companies underlying financal performance. Value investing is coming back into vogue. 

Under normal times that would be foreign, a good example would be Lloyds. But value investing I would agree is very much in the forefront. So people who have picked up a bargain with Easy jet, JD weatherspoons e.t.c are clearly winning. But for how long?

Under normal times I wouldn't have touched IAG with a barge pole, but there is profit to be made and even just doubling my money I would be happy. These are indeed different and odd times. Normally I would just dumped it into HMWO and left it alone but the gains I have made from various shares is probably a once in a lifetime.

My only regret was not investing in William hill, you could potentially x10 your money, but some on this forum have a better crystal ball, who knew what the bottom was. 

Thrugelmir

csgohan4 said:

Thrugelmir said:

masonic said:

Thrugelmir said:

masonic said:

adonis10 said:

masonic said:

Thrugelmir said:

masonic said:

Alexland said:

Another total bloodbath in the markets today. It's relentless. Am starting to wonder if we invested above our volatility tolerance as I haven't a clue how we are going to spend all this money. We will be hiding behind the sofa pretending to be out when the wealth managers come knocking on the door. Some days it would have been better to just stay in bed. The warning signs were flashing and we just kept regularly contributing through the dips like idiots. Should have taken action earlier to cut our gains. So many regrets...

Will this ever end? I can't believe I checked the markets this evening, ruined my day. I won't sleep a wink tonight

Nasdaq closed down 1.5%.  Not everybody will be rejoicing.  

Which way will the herd stampede tomorrow ? 

Yes, the recent news is not good for all sectors, tech stocks that got a Covid boost, gold, etc. That's the danger in having a knee-jerk reaction to previous events and taking radical action like moving everything into a single sector you consider a safe haven.

I'm sure the market has overreacted to some extent and will pull back, but those who will be most disappointed are the ones positioned for the demise of this dead-cat bounce and a fall to March levels, or *much* lower.

Why would anyone think it would fall to March levels? How would that even be possible now that there is a vaccine, surely in covid terms, those days are gone (obviously the future will hold other events that will tank the market)?

Good question, I don't know if anyone is willing to come out and admit they still believe that, but once emotionally invested to an outcome, it is difficult to let it go.

Playing devils advocate, it is of course possible, we now have Minkvid-20 (or as Trump would call it, the Denmark virus), and it seems likely the Pfizer vaccine and others would be ineffective against that owing to a mutation in a gene encoding the spike protein. Further such zoonotic-mediated mutation is possible, as is natural mutation that would render vaccines ineffective against new strains. The other argument is that the "true" economic impact of the past 9 months, and likely next 6-12 months, has been swept under the carpet and not reflected in market valuations. Channelling my inner Ed Gasket, we are heading for a period of Weimar hyperinflation where cash, bonds, equities etc will all devalue and only those holding gold and silver will escape unscathed. As soon as the general population realises this, there will be an unprecedented flight to safety and markets will tank BIG TIME.

I feel dirty now.

If companies fail to deliver the expectations placed on them by investors. Then markets could easily fall back sharply. Only takes a few bad financial results to translate into a broader market sell off.  As investors will take fright. High frequency retail trading does appear to be making for more volatile markets in some stocks and reflecting in indices generally.

Yes, a correction or crash could come along at any time, as is always the case, but the notion adonis10 was regarding with complete disbelief was that a crash could now take us back to March lows, or much lower. The FTSE World index is now about 38% above the March low, so would need to fall by just over 30% to reach it again, which is a slightly larger drop than the original Covid crash. Not impossible, but typically a once in a generation event. 

We all have to accept it is something that could happen as an extreme possibility, but to repeatedly sell all of your investments and sit in cash every time there is a 5% correction, or to have sold out near the March lows and waited patiently for a much lower point to buy back in is perhaps not the most rational of investment strategies.

Volatility is certainly higher now than during recent years, where markets have been eerily calm in general. These times don't strike me as particularly turbulent though, compared with those further back in history - especially around significant events. March itself was pretty exceptional, though.

Discounting the tech space there have been some other astounding share movements since the lows of March.  I doubt many retail investors who trade indexes or certain ETF's realise how far markets have polarised since. There's a growing disconnect to the actual companies underlying financal performance. Value investing is coming back into vogue. 

Under normal times that would be foreign, a good example would be Lloyds. But value investing I would agree is very much in the forefront. So people who have picked up a bargain with Easy jet, JD weatherspoons e.t.c are clearly winning. But for how long?

Don't regard IAG, Easyjet or JDW as value shares myself.  Recovery (medium term) perhaps. Hence the volatile share prices currently as Robinhood investors trade on daily news not the underlying fundamentals. 

csgohan4

Thrugelmir said:

csgohan4 said:

Thrugelmir said:

masonic said:

Thrugelmir said:

masonic said:

adonis10 said:

masonic said:

Thrugelmir said:

masonic said:

Alexland said:

Another total bloodbath in the markets today. It's relentless. Am starting to wonder if we invested above our volatility tolerance as I haven't a clue how we are going to spend all this money. We will be hiding behind the sofa pretending to be out when the wealth managers come knocking on the door. Some days it would have been better to just stay in bed. The warning signs were flashing and we just kept regularly contributing through the dips like idiots. Should have taken action earlier to cut our gains. So many regrets...

Will this ever end? I can't believe I checked the markets this evening, ruined my day. I won't sleep a wink tonight

Nasdaq closed down 1.5%.  Not everybody will be rejoicing.  

Which way will the herd stampede tomorrow ? 

Yes, the recent news is not good for all sectors, tech stocks that got a Covid boost, gold, etc. That's the danger in having a knee-jerk reaction to previous events and taking radical action like moving everything into a single sector you consider a safe haven.

I'm sure the market has overreacted to some extent and will pull back, but those who will be most disappointed are the ones positioned for the demise of this dead-cat bounce and a fall to March levels, or *much* lower.

Why would anyone think it would fall to March levels? How would that even be possible now that there is a vaccine, surely in covid terms, those days are gone (obviously the future will hold other events that will tank the market)?

Good question, I don't know if anyone is willing to come out and admit they still believe that, but once emotionally invested to an outcome, it is difficult to let it go.

Playing devils advocate, it is of course possible, we now have Minkvid-20 (or as Trump would call it, the Denmark virus), and it seems likely the Pfizer vaccine and others would be ineffective against that owing to a mutation in a gene encoding the spike protein. Further such zoonotic-mediated mutation is possible, as is natural mutation that would render vaccines ineffective against new strains. The other argument is that the "true" economic impact of the past 9 months, and likely next 6-12 months, has been swept under the carpet and not reflected in market valuations. Channelling my inner Ed Gasket, we are heading for a period of Weimar hyperinflation where cash, bonds, equities etc will all devalue and only those holding gold and silver will escape unscathed. As soon as the general population realises this, there will be an unprecedented flight to safety and markets will tank BIG TIME.

I feel dirty now.

If companies fail to deliver the expectations placed on them by investors. Then markets could easily fall back sharply. Only takes a few bad financial results to translate into a broader market sell off.  As investors will take fright. High frequency retail trading does appear to be making for more volatile markets in some stocks and reflecting in indices generally.

Yes, a correction or crash could come along at any time, as is always the case, but the notion adonis10 was regarding with complete disbelief was that a crash could now take us back to March lows, or much lower. The FTSE World index is now about 38% above the March low, so would need to fall by just over 30% to reach it again, which is a slightly larger drop than the original Covid crash. Not impossible, but typically a once in a generation event. 

We all have to accept it is something that could happen as an extreme possibility, but to repeatedly sell all of your investments and sit in cash every time there is a 5% correction, or to have sold out near the March lows and waited patiently for a much lower point to buy back in is perhaps not the most rational of investment strategies.

Volatility is certainly higher now than during recent years, where markets have been eerily calm in general. These times don't strike me as particularly turbulent though, compared with those further back in history - especially around significant events. March itself was pretty exceptional, though.

Discounting the tech space there have been some other astounding share movements since the lows of March.  I doubt many retail investors who trade indexes or certain ETF's realise how far markets have polarised since. There's a growing disconnect to the actual companies underlying financal performance. Value investing is coming back into vogue. 

Under normal times that would be foreign, a good example would be Lloyds. But value investing I would agree is very much in the forefront. So people who have picked up a bargain with Easy jet, JD weatherspoons e.t.c are clearly winning. But for how long?

Don't regard IAG, Easyjet or JDW as value shares myself.  Recovery (medium term) perhaps. Hence the volatile share prices currently as Robinhood investors trade on daily news not the underlying fundamentals. 

Yeah, these shares are not short term profits for me, I will likely hold for 5-10 years until they reach close to their pre covid price and sell. 
But you can see the volatility as people try and make a quick profit, their volatile in the short term and I would agree. Not for the faint hearted. I pity the people who poured in money into roll royce after the initial rise, they are facing around 30% ish loss

I've deliberately not gone with the crowd on this and herd invested. I feel the value will drop again, once the sentiment wears off and realisation a vaccine may not fully get things to normal for another year or so. It will take at least 6 or so months to vaccinate the whole population from when it's available, who knows how long for the rest of the world

itwasntme001

How do we know the "value" stocks weren't over priced prior the the pandemic?  Perhaps they have mean reverted and are at valuations more reasonable, even without the pandemic?

The vaccine still has many hurdles ahead so likely still will take time (a year or so more?) for enough of the population to be immunised for the pandemic to cease.  Many companies will continue to be in trouble and their share price thus won't necessarily recover to even close to previous pre-COVID high.

Thrugelmir

RR has been a highly shorted stock on the LSE recently. That's why the price bounced back suddenly. As some traders closed their positions. 
The announced vaccine, even if found to be effective, to has to stored at minus 80 degrees.  In itself a major challenge from a transportation, storage and distribution perspective. With the only manufacturing plants being in the US, Germany and Belgium. 

Alexland

itwasntme001 said:

The vaccine still has many hurdles ahead so likely still will take time (a year or so more?) for enough of the population to be immunised for the pandemic to cease.  Many companies will continue to be in trouble and their share price thus won't necessarily recover to even close to previous pre-COVID high.

There are also decisions to be made on which vaccine to progress. Pfizer's work is not complete so they may have jumped the gun on their announcement and good progress has been made on the Oxford vaccine which is simpler to distribute, cheaper and uses more proven techniques. The pandemic doesn't need to cease just stop killing the most vulnerable people by offering it to them first. Many might not be too worried about any potential long term impacts. Personally I am happy to be at the back of the queue.

itwasntme001

Alexland said:

itwasntme001 said:

The vaccine still has many hurdles ahead so likely still will take time (a year or so more?) for enough of the population to be immunised for the pandemic to cease.  Many companies will continue to be in trouble and their share price thus won't necessarily recover to even close to previous pre-COVID high.

There are also decisions to be made on which vaccine to progress. Pfizer's work is not complete so they may have jumped the gun on their announcement and good progress has been made on the Oxford vaccine which is simpler to distribute, cheaper and uses more proven techniques. The pandemic doesn't need to cease just stop killing the most vulnerable people by offering it to them first. Many might not be too worried about any potential long term impacts. Personally I am happy to be at the back of the queue.

I disagree.  The aim should be to vaccinate enough people to create herd immunity in order for the virus to be eradicated.  Just vaccinating the vulnerable will mean the virus stays.  More chance of mutating.  More hospitalization rates.  More concerns about catching it and spreading it.  More economic uncertainty.

ProDave

I thought it worth re visiting this thread that I started.

Well clearly I called it "wrong" (at least for now.)  but just to recap, what I saw at the time I started the thread was the markets on a slow decline since July, nothing but bad news, rising Covid cases again, more lockdowns just about everywhere, more Furlough and cost to the tax payer, rising unemployement etc etc.  Add in the unresolved Brexit deal (or not) and the presidential election and uncertainty over Trump leaving quietly. Then I saw some technical analysis that said the markets had reached a trigger point and would break out of their trend, and whichever way they broke the trend would continue for some time.  Finally I saw an increasingly rapid downward trend and called it that the markets had broken out on a downward trend and would continue falling.

I did not predict the vaccine announcement.  I was not expecting any substantial progress on that from any of the players until the end of the year.  I doubt anyone would have called that without inside information.

So I sold one of my finds and kept the other.  I am not unhappy with that position. Yes I have missed some gains but I also potentially missed some losses.  What it has shown is the fund I chose to keep has been performing a lot better than the one I sold so I will in due course be buying something different.  But not yet.  The time to buy is not just after a big rise. 

I still feel the markets are so far removed from the reality and it is only government bail outs, furlough etc that is keeping the true situation at bay, and nobody has a clue how or when all this debt will ever get repaid.  So my finger is never going to be far from the sell button just in case.