The overall market has fallen in excess of 40% several times, and has always recovered to make new highs. We continuously hear that "this is the worst I have ever seen it" but the market doesn't fall by 40% when the outlook looks good! Through all bear markets it is logical to think people thought this was "the worst they've ever lived through". It's understandable if you are leveraged up big that you would be panicking, but if you have more than a 10 year outlook, then there is no need to panic. Just remember, hindsight is 20/20
I agree. buying the dow with big leverage when it is down 40%+ has always being a sure fire way to get rich, I dont think 'this time is different'
I never said buy the dow with leverage... I said only those that should be panicking are ones that are leveraged.
That's a bunch of "buy and hold" bull that Lynch and Buffet have been feeding people and it hasn't worked for the last 10 years. Guess what. The SP500 is still in rip-off territory. We aren't even near fair value, let alone undervalue.
Maybe because people are comparing this to the Great Depression, at which time the market didn't stop falling for 3 years and didn't go back to where it was at the peak for about 25 years (going by the Dow)? Not saying that's going to happen now, but it's happened before. Plus, add to the mix that there are a *lot* of jobs going away, people are scared their savings are going to disappear, they won't be able to find a job, and prices might go up to boot. There's enough out there to fear, for sure.
Agree 100% IBM just reported earnings that beat the estimate. This media generated economic crisis only affects a few sectors. It is hardly a crisis at all when so many sectors are still reporting such strong growth.
Listen, I have frankly seen some stupid replies here. I never called a bottom and I never said go all in and buy now. What I'm saying is even after a near 90% route in the great depression, the market still went on to make extraordinary gains over the next 30 years. What I can say for certain is there are a hell of a lot more buy & hold investors who are successful, than short term traders who are.
For us traders this is really no problem. Lots of opportunities to make money. It's the poor guy who never looks at his 401K who is loosing his shirt. Even worse if he is pulling that money out to pay bills. This not the same conditions as 1929. In my opinion China is more or less like we were in 1929. In 1932 America we had it good with only 25% unemployment. Not everybody went broke in 1929. Only those who did not know what they were doing lost out big, it was the you can't loose mentality, I had people telling me the same thing about real estate. In 1929 most of the people in the market who were on heavy margin, with zero money management skills and no clue to what a bear market was lost everything. The market took three years to bottom. Lots of time to get out and adjust. Governments are doing everything they know of to prevent a catastrophic market meltdown today. Of coarse nothing ever happens exactly the same way twice but even if the worst case there will be plenty of money making opportunities out of this. If you have lots of cash it is a great time. The problem now is many people have zero cash, that is no savings combined with lots of debt and a credit environment that has gone bone dry. If the flow of credit is not restored it is a fair bet our economy will slow drastically for a time. I will still make lots of money cause I have real cash to invest. And I will just get richer.