Who else thinks the Sharemarket is going to tank much further?

With the recent hits to the sharemarket, who else thinks it's going to tank much further? The Corona virus is very different to the financial crashes we've had in the past as there wasn't a shutdown of the global economy - as there is now.

I don't think it's sunk in for a lot of people on how damaging the current situation is. A few weeks ago, I was going to buy some stocks thinking I'd pick up some bargains, but after researching the flow on effects of what is currently happening, have re-assessed.

Your thoughts?

 

I got that sinking feeling - with apologies to the Righteous Brothers.



You looking at 6 months, 12 months, 24 months, 5 years, 10 years or 40 years?

 

We could be here now

 

My uneducated opinion is I think there's more pain to come.

 

This is complete speculation so take it with a grain of sand.

I believe there is more pain to come. So many people are out of work, not paying bills, not spending, not paying rent. This flows on to the whole economy. Even bank profits will be hit with people taking repayment holidays.

I went into the Perth CBD on Friday and half the retail shops were shut. Almost all of the coffee shops and takeaway lunch places are closed.

 

Nah, 30+% reduction is huge.

If the market drops 40+% from its 20-Feb-2020, I am going in “with both guns blazing”.

 

Maybe right due to the devaluation of the dollars, share and property will be saved in term of number...

 

Interesting.
I reckon 30% is an absolute minimum.

At 40% I am going in pretty hard too.

But I think the hopes for a V shaped recovery in the economy is a bit optimistic.
There is going to be a whole raft of businesses in the US that don't survive.
Unemployment will linger for some time.
The lack of consumer spending that typically makes up 70% of US GDP is going to be painful.

But, what do I know...

All of that said, when we do come out of this and the economy is back up to speed there is going to be a huge amount of cash splashing around and markets will find new highs. Which IMO is what is driving markets right now.

 

Dow posted its worst first quarter in history in falling -23%.
S&P500 posted its worst quarter since 2008 in falling -20%.
Nasdaq recorded its worst quarter in – oh – two years, in falling -14%
Russell small cap index posted its worst quarter since 1979, falling -31%.

In recent virus news, Spain recorded 849 deaths in one day, the biggest jump to date. New York City reported a 16% increase in deaths in six hours. Peak virus still alludes.

This is not done yet, and neither is the economic impact.

 

Watch when the USA has 10s of thousands, if not hundreds of thousands of deaths. Well see stock markets doing zig zags I reckon..

I'm still waiting for one final sharp drop before I put most of my money in. Last few weeks I've managed to grab about 134k.

 

Perth just can't seem to catch a break...

 

Yup. My guess is we are in for a doozy. Obviously markets are forward looking but the economic effects have barely started. And political leanings aside, current management in U.S and Aus are clearly not good in a crisis.

 

and what will all this possible carnage going forward do to the AUD?

 

I sold some shares yesterday at break even with the plan to buy more when the market goes down further. Well that's my plan, not sure if it will happen.

 

Just talked to my Bond guys. Big issues coming. Not sure we can get out of it. Recommendation: Go to cash and wait 3-6 months. That includes equities.

 

Care to share more information?

 

What I do know is that I know even less ...

 

We, newbies, don't look at the progress, so wow, I want that results

 

So I looked into my crystal ball and this is what it said.

The market will fall further and most likely hit a new low in this cycle. But it wont go as low as I was expecting previously. The crystal ball say's this is due to government intervention. They will continue to step in and keep it from going to absolute ****. Company profits will disappear for a few months or more but the government has pretty much taken every middle class employee onto its books for the next 6 months. This will lift a significant burden of the businesses that have shut down. And the businesses that still have some ongoing operations this is a huge boost. This I know because I am in a business that's been hit but is still operating.

Crystal ball says as a result of the government taking a significant burden of the shoulders of business and also allowing some flexibility with rents / loans, businesses might not be making profits during this period but they also wont be incurring as much costs as you would normally expect.

In conclusion a 40% or so drop from the top allows for the previous frothiness of the market plus some allowance for the few months of no profit of the businesses out there. Now on re opening it will still take some time for the businesses to get back to previous income levels so it wont be back to full profit straight away. It could be a year or even two to get back to where they were but when they do there will be a few hundred billion dollars more sloshing around the system that will have to go some where.

Crystal ball also says now that they have opened Pandora's box on insane amounts of stimulus when things start moving again they will open it once again and use more stimulus to get the economy back to even balance as quick as possible. That all means that we will see all new insanely high asset prices sooner than would it would normally come around.

If this is all wrong don't blame me. I'm just telling you all what my crystal ball is predicting.