The NASDAQ is now down a bit more than 20% from its peak. By comparison the Dow is down close to 16% the S&P close to 17%.
It was crazy to think that stocks could keep going up at that pace for so long.
The way I look at the stock market situation, is that this is providing a buy situation. At least once the stocks level out. And one might also take into consideration, that the stocks that have driven down the various markets, also have other factors involved.
Like; Who gives a crap that Apple came out with a new phone, when it didn't really increase on the abilities of the old phone? And other similar considerations in "product advancement".
I think I was the 1st bear to actually post a bearish stk market was coming
It was hard to be bearish when all around the market was hitting new highs and folks would post links on the forum for higher highs
I even told our portfolio manager to get out of stks but what did I know. He told me we were good for all of 2019 and part way into 2020. It is too late now, we just have to hold and wait
IMHO the market will not stop going down until it hits the Fed put, where ever that may be??? and even then the Fed may not have enough bullets to stop the bear. I am posting this now so I can't be accused of being an arm chair quarter back
I will also post that we could see a recession that could last a decade. Reason being, too many banks hold too much debt and the easy Fed money and low int is a thing of the past. At least zero int rates are gone.
Just imagine if you did a stk buy back, on cheap borrowed money at 100/share. Now your stk is going to 50 given enough time, and big money circles around and sells the heck out of your stk. They have already bought out your bonds on the open market because that is what the market [big money wants to do and your cash flow never was that strong, but cheap int was enough to convince the board members to do a buy back due to low risk and high personal bonuses. Where did the banks security go. Yeah Poof If the cash flow will pay the interest the bank will not force BK and the big money is not interested in your bonds. Lucky you.
Less stk means less pool of buyers and sellers and volitility once started is a hard animal to stop, thus the market will sell until it takes the stk to 50
If the company is forced to file bk, then the bank gets 1st crack at the assets. Then come the bond holders, who get maybe 90 or even 100 cents plus the int they have collected and everybody else by that time gets maybe 10 cents on the dollar. That is how some people make gazillions by forcing BK and then as a bond holder selling the plant assets. I think Romney was a master at forced BK and asset sales
Can anybody see why a recession is a real danger, with the Fed pushing int rates higher and the dominos start to fall.
Or is this too much for some to even think about???
Recessions don't last a decade. Businesses are building inventories and are optimistic in hiring. But what do they know. I could go on.. But....