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Current stock markets are terrifying


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Once upon a time the stock market was a direct reflection of the current or future prospects of economies.

Every time I check the S&P its up. This is despite us(the world) being in one of the biggest recessions of all time. I am finding the whole thing a little bit terrifying. It seems no matter what happens, stock markets will be kept up by money printing. 

Even if people are starving on the streets, you will see see the rich get richer. Something has to give here or does it. Where does this end?.

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It is somewhat difficult to work out why stock is at its current level - doesn't make sense to me but then I guess that's why I buy Gold....

Best

Dicker

Not my circus, not my monkeys

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28 minutes ago, TheApe said:

Once upon a time the stock market was a direct reflection of the current or future prospects of economies.

Every time I check the S&P its up. This is despite us(the world) being in one of the biggest recessions of all time. I am finding the whole thing a little bit terrifying. It seems no matter what happens, stock markets will be kept up by money printing. 

Even if people are starving on the streets, you will see see the rich get richer. Something has to give here or does it. Where does this end?.

 

I'm on the motorway, and miss my turn.

do I immediately make a u turn(endangering the lives of many) to fix the problem?

or do I continue going down the wrong path until I get to the next junction and then

take the opportunity to turn around?

 

there is a time and a way for things to happen?

 

HH

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The view is that the economic impact is going to be short, 2-3 quarters.  In US they are already reporting some earnings ahead of estimates (not sure if those are revised estimates), so its not completely unrealistic.  Yes the markets are being propped up with QE too, they are still considerably down on February levels.  

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I could see a V shaped recovery but where do the markets go....I suspect up before the big down.  But what do I know - nothing - no one can predict the future.

 

Best 

Dicker

Not my circus, not my monkeys

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1 hour ago, HawkHybrid said:

 

I'm on the motorway, and miss my turn.

do I immediately make a u turn(endangering the lives of many) to fix the problem?

or do I continue going down the wrong path until I get to the next junction and then

take the opportunity to turn around?

 

there is a time and a way for things to happen?

 

HH

Thanks, Eric Cantona.

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where is all this QE going, all Americans have been getting 1-2k a month and banks no longer give any return so everyone piles in the market.  I can't see the Ponzi crashing anytime soon so better to get on the gravy train with some good stop losses!

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It's a bull trap... that is the only logical reason I can think of.

But hey - if the markets crash to 2008/2009 levels I will be there to buy some shares at bargain prices. If the markets never come down to levels where they reflect the economy, I will just keep on buying gold and silver.

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Too many wannable geniuses here think that they're they ones who will calmly swoop in when the market has sold off to a generational low. Newsflash: It ain't that easy, kids. We just HAD out once-a-decade crash.. and where were you guys? Too busy sitting on the sidelines waiting for the genrational crash which never came.

 

The market can be expected to suffer a 60% decline about once every 25-30 years, and 35-40% once per decade. We just got our once per decade decline.

We had a generational decline back in 2009. The one before that was 1974. We not due another one any time soon. 

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On 28/05/2020 at 17:20, RoughDog said:

What goes up must .....

...Keep going up, with the occassional correction along the way? 

This might not sound very catchy, but it pretty accurately describes the growth of the stock market.

 

BTW, if people actually care to check the numbers, the FTSE suffered a peak to trough 41% decline in real terms between it's all time high in mid 2018 to its lows in March 2020. That's deep and long enough for any bear market worthy of the label. People have been so fixated on the US markets they don't bother to look to see that many market did fully reflect the severity of the situation. Even today, the FTSE would needs to rise by another 1/3rd to get back to its all time highs - a peak where it was not especially expensive based on historical valuations.

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5 minutes ago, KDave said:

Feels like a bull market to me, people saying stocks are overpriced, everyone expecting a bull trap, $2000 gold by year end priced in. ;)

It's important to distinguish between Secular and cyclical trends. Secular trends are driven by long term permanent changes to the nature of captial markets. Cyclical trends revolve around the short term business cycle.

 

US markets have been in an ongoing secular bull market for 38 years since 1982 with the occassional cyclical bear market along the way;

UK market arguably the secular bull only ran to between 1982 - 2000, and we have been in a long term secular bear since then with the occassional cyclical bull

The difference is the US has a more dynamic culture and economy which enbraced the tech revolution even through the bursting of the tech bubble, so today their economy is larger and more productive because of the long term changes this trend brough about. UK market is still mired in financials, energy and consumer staples. No Amazons/Google/Netflixes to boast about.. we made property rather than entrepreneurism our national pasttime.

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Yes the dates you mention for the FTSE bear tie in with the UK housing market bull from 2000 onward, rent seeking and speculation in non productive housing has been economically destructive to growth. Though I think the FTSE still being heavily representative of energy and mining will be its edge over the next decade (inflation). 

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The entire global markets are controlled by a computer programme that moves every market in favour of the Banks positions and naturally against those holding the opposite resulting position, equities are going up recently because the Banks moved to net long positions, simple as that!

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