stock market crash

[scooterscot]

I'm reminded of a quote as I was back in 2017 when folks were laughing at my ideas...

[rogerfederer]

Permabear mentality. They wish for the end of the world just so that they can make a bit of money out of the misery and pain inflicted on everyone else.

It's like shorting shares in airlines and praying the their planes to crash, just so that you can make some money.

There are many fools are hoping for a deep recession or a depression - they think they will benefit by being able to pick up cheap shares or cheap houses. The reality will be far darker, one in which everyone will suffer, including the permabears. There will be no winners.

I think the guy is probably correct, to be honest. Nothing really improved since the 2008 crisis caused by the banks except a bit of regulation in the UK. Trump and his Republican idiots have cut swathes of this regulation in the US. From a birds eye view it does look as if the markets are far too inflated and have done so through the deregulation, meaning they aren't in great shape.

I know plenty of people through clients who are in lower level jobs and have part time work to afford their generic £200k to £250k flat in prime areas of Manchester, Edinburgh, Birmingham. This work will have disappeared, particularly in hospitality. Recent construction was being propped up by insecure jobs. They aren't paying their mortgages now. The hospitality and insecure work won't return until people are sure of their savings, cash and job position in 3 to 6 months. This won't be a return to before and thank goodness, as the economy was weird. How the hell did WeWork get such huge investment; Uber, other VC investment nonsense.

I think the markets have lower to go and haven't priced in another month of chaos and drops. People I know who used to eat out regularly aren't even using the takeaway options, they're cooking at home and watching every penny now - even the richer people.

It is also coming to light that most people aren't comfortable with important jobs being paid like tulip and those people being looked down upon for work, such as in care homes, where a couple of unscrupulous managers profit whilst the core workers don't get much above minimum wage.

Society needs calibration of job worth and if ever there was a time to tackle that, climate change infrastructure projects and heavily indebted companies going bust then I'm afraid it's now. You seem far too bullish to me and my own position is a negative outlook for at least a year, if not two. I'll be funding my portfolios with cash (as bank account interest rates are nearly zero anyway) but not investing it for the time being.

FWIW I sold everything in the markets when the virus hit Italy and the news started to pick up on it; meanwhile Trump was telling his local idiots to invest in the markets. The cries 'SELL!' were obvious.

[DimPrawn]

blah

FWIW I sold everything in the markets when the virus hit Italy and the news started to pick up on it; meanwhile Trump was telling his local idiots to invest in the markets. The cries 'SELL!' were obvious.

Did you sell your bedsit in Croydon sassy? Or only your leafy pile in Surrey / Portugal?

[rogerfederer]

Did you sell your bedsit in Croydon sassy? Or only your leafy pile in Surrey / Portugal?

I don't own any second homes, holiday homes or the the like. University costs and savings for kids mean I didn't like the way the market was being propped up from 2014 onwards and decided against the numerous prohibitive measures against landlording.

Cash is king.

[MrMarkyMark]

I don't own any second homes, holiday homes or the the like. University costs and savings for kids mean I didn't like the way the market was being propped up from 2014 onwards and decided against the numerous prohibitive measures against landlording.

Cash is king.

Cash is totally king right now.

I dodged a bullet, in a way, not getting a contract all of last year after a year travelling, as the next plan was to buy a bigger second property.

Glad I kept my cash and where we live is 80% paid off, low outgoings.

Used to spend a fortune on holidays, the best restaurants here and abroad, best drinks etc. etc.

All of that behavior has now totally changed and in a way I really don't miss it, I still have the memories.
The one thing I still don't scrimp on is food as I like to cook. A lot of restaurants, at least in the UK, are not truly great in any case and often aren't using ingredients as good as I get.

We could still last 4-5 years on the actual cash we have left, in any case, a hell of a lot longer than some.

[ladymuck]

Someone's always making money


This Hedge Fund Saw Risks of Coronavirus Early. Now It’s Up 36%. - WSJ

[rogerfederer]

Cash is totally king right now.

I dodged a bullet, in a way, not getting a contract all of last year after a year travelling, as the next plan was to buy a bigger second property.

Glad I kept my cash and where we live is 80% paid off, low outgoings.

Used to spend a fortune on holidays, the best restaurants here and abroad, best drinks etc. etc.

All of that behavior has now totally changed and in a way I really don't miss it, I still have the memories.
The one thing I still don't scrimp on is food as I like to cook. A lot of restaurants, at least in the UK, are not truly great in any case and often aren't using ingredients as good as I get.

We could still last 4-5 years on the actual cash we have left, in any case, a hell of a lot longer than some.

That's the right attitude to have. I think humans have short term memories and only look at the last five or ten years. People with worse memories only look back a year and it seems many people I know hardly remember a few months ago. I think this mindset helps contribute to bad investments.

Most investment websites try really hard to only show you a graph of the last week, last month, last few years. RightMove and housing websites do the same. Why would I care about price increases from a max of a decade ago? I want to see all years on the register.

If anything from crash to the top the middle was probably roughly correct and we've got a way to go in some markets to get back to 2013 levels, including housing.

[wantacontract]

That's the right attitude to have. I think humans have short term memories and only look at the last five or ten years. People with worse memories only look back a year and it seems many people I know hardly remember a few months ago. I think this mindset helps contribute to bad investments.

Most investment websites try really hard to only show you a graph of the last week, last month, last few years. RightMove and housing websites do the same. Why would I care about price increases from a max of a decade ago? I want to see all years on the register.

If anything from crash to the top the middle was probably roughly correct and we've got a way to go in some markets to get back to 2013 levels, including housing.

I've actually gone the other way, sold out in late 2018, and have bought back in, and will continue to do over the next 12 months.

Still a bit risk averse, so only going in with about 50% of my war chest cash, the other 50% towards for the next 12 months of stormy outlook......

I just think staying cash especially with all this funny money being printed all over the world I need to hedge my bets somehow.

[scooterscot]

Still a bit risk averse, so only going in with about 50% of my war chest cash, the other 50% towards for the next 12 months of stormy outlook......
.

Thinking 2-years of cash is the minimum one needs right now. Take the minimum you can live on per month x 24, you'll be okay then until we get out of this.

[scooterscot]

The Warren Buffet indicator

At the moment some folks seem convinced they are buying the dip, which I think is madness... Here Mr Buffet's indicator showing the past two recessions with stock valuation to GDP. The market bottom is always below GDP, which makes sense, otherwise it wouldn't be a recession. If we assume the previous market highs will act as support, then this sell off in the markets isn't over until 70-80% correction. In other words the correction has barely begun.

Something else to consider if buying into stocks at the minute (whilst assuming the above becomes true), your average return (not considering dividends) will be 1.25% per year for the next 10 years.