Stock Market Resiliency

[Irv]

I'm amazed at how the stock market is recovering from the impacts of the pandemic.  It's almost gained back half the losses taken during March.  Once this virus is behind us, is it unreasonable to think the Dow could be at 35K within a year from now?

[ocemur]

If it is, it's a bubble from too much liquidity and people with no where to put their money. The valuations were on the high end of historical ranges based on earnings at 29.5k in the first quarter, so to justify 35k we'd need 16-17% earnings growth just to maintain an overbought market. For those values to be solid maybe 20% year over year in January or something. This seems unlikely.

 

All that being said, I grabbed all the change out of my car and flipped the couch cushions looking for money to put into the market over the last 2 months. I feel like I got some bargains and some are already showing results.

[T&C]

6 minutes ago, Irv said:

I'm amazed at how the stock market is recovering from the impacts of the pandemic.  It's almost gained back half the losses taken during March.  Once this virus is behind us, is it unreasonable to think the Dow could be at 35K within a year from now?

I basically use my 401k to determine how things are going... stock related for sure, and as of now its only down $1,600 from the beginning of the year. Not bad considering everything.

[Not at the table Karlos]

Had something come up around December so I sold off all my stocks. Ended up not needing the money and forgot to put it back in market. Just threw it all back in a little over a week ago. Things are looking good, everything is up besides a few penny stocks I bought for SNG

Edited April 27, 2020 by Not at the table Karlos

[KD in CA]

While the markets are latching onto any good news (states opening up, good tech earnings), I don't think they've really factored in the long term impact of this shutdown.

[Augie]

I put some cash into the market a while back, just to once again prove to myself you can’t time the market.  ?

 

Averaging is your friend. 

[BringBackFergy]

1 hour ago, Irv said:

I'm amazed at how the stock market is recovering from the impacts of the pandemic.  It's almost gained back half the losses taken during March.  Once this virus is behind us, is it unreasonable to think the Dow could be at 35K within a year from now?

I am disgusted by this optimism. If you keep it up I’ll report your ass. 

[stuvian]

with central bank money printing all things are possible

[ICanSleepWhenI'mDead]

I share the amazement, but interpret what it means much differently.  My guess is that most computer investing models look at recent stock market drops, see a lot of "V-shaped" recoveries, and blindly predict that this time will be the same.

 

But in my personal opinion, it's not the same.   The state governors can react to vocal criticism by a minority of consumers and by their big-money business-owning donors who are losing profits, by allowing the economy to re-open, but the average consumer is NOT going to immediately resume the same spending habits they had before the pandemic.

 

If we get a re-test of the recent lows, and those lows hold, I'll consider buying stocks - - not before then.

 

And FWIW, I take the general optimism about stocks in this thread as a pretty reliable contrary indicator.  Time will tell.

 

Your mileage may vary.  Do not try this at home.  Professional driver on closed course.  Consult your physician for a complete list of all side-effects.

 

Full disclosure - - I have occasionally been called an idiot by both my significant other and by prior insignificant others.

 

 

[GoBills808]

The markets are reacting to the concept that finally the public hasn't outright revolted yet over a stimulus package that we will be paying off until all of our kids are dead.

 

$6.5trillion injected into industry will tend to go over well. The markets will burn hot as long as we depress interest rates and lower the corporate tax. It's not rocket science.

[BringBackFergy]

56 minutes ago, GoBills808 said:

The markets are reacting to the concept that finally the public hasn't outright revolted yet over a stimulus package that we will be paying off until all of our kids are dead.

 

$6.5trillion injected into industry will tend to go over well. The markets will burn hot as long as we depress interest rates and lower the corporate tax. It's not rocket science.

There it is. Thank you. Put the OP in his place. 
 

[Buffalo716]

12 hours ago, Not at the table Karlos said:

Had something come up around December so I sold off all my stocks. Ended up not needing the money and forgot to put it back in market. Just threw it all back in a little over a week ago. Things are looking good, everything is up besides a few penny stocks I bought for SNG

Any recommendations for a rookie? I know football not the stock market

[Not at the table Karlos]

2 minutes ago, Buffalo716 said:

Any recommendations for a rookie? I know football not the stock market

I don’t know much. Been playing around with Robinhood and Coinbase for crypto for a couple years when I get bored.
 

I’ll look for a stock a week that interests me for whatever reason and buy whatever I can afford that week. The last month or so it’s been buying up stuff that dropped. I’ll look at the chart to see how it’s done over the last year. If it seemed to be climbing before the recent drop or something that will rebound and is cheap enough I’ll buy it.

 

 Groupon for example has been doing well for me. It bottomed out at .48 cents, I bought at .56 and it’s at $1.27 at the moment. The 52 week high was only $3.82 but if it gets to $2 I’ll be really happy. 

 

Before getting out for a bit I was getting into dividend stocks. You get paid a small percentage of the stock every so often. Still feeling my way around them.
 

There’s a lot I don’t understand so I don’t want to give you bad info. I could be doing things completely wrong. 
 

 

[Lurker]

52 minutes ago, Buffalo716 said:

Any recommendations for a rookie? I know football not the stock market

 

IMO, until jobless claim numbers start to stabilize:

 

Edited April 28, 2020 by Lurker

[Buffalo716]

55 minutes ago, Lurker said:

 

IMO, until jobless claim numbers start to stabilize:

 

I do tons of that

[plenzmd1]

20 hours ago, ocemur said:

If it is, it's a bubble from too much liquidity and people with no where to put their money. The valuations were on the high end of historical ranges based on earnings at 29.5k in the first quarter, so to justify 35k we'd need 16-17% earnings growth just to maintain an overbought market. For those values to be solid maybe 20% year over year in January or something. This seems unlikely.

 

All that being said, I grabbed all the change out of my car and flipped the couch cushions looking for money to put into the market over the last 2 months. I feel like I got some bargains and some are already showing results.

i think a fundamental shift has occured over the last 30 years, and it is driving the market..and that shift is 401Ks. 30 years ago, the average Joe like you and me were not in the market as a whole..folks maybe a few shares for the company they worked for,dabbled a bit here in there on some hunches, but certainly their retirment was not tied to the market. Big market swings may have spooked them, caused them to sell etc.

 

Now, so many people have a 401K and are much more aware of the market..and as such are more aware of "dont panic" Dollar cost average" is your friend, remember you do not need this money till you retire , dips are good for you long term"..they don't panic sell.Last i saw, like$7Trillion in equity mutual funds held in 401K accounts. That money for the most part is staying put..and hence why i think you get the resilience in the market.  

9 hours ago, ICanSleepWhenI'mDead said:

 

 

If we get a re-test of the recent lows, and those lows hold, I'll consider buying stocks - - not before then.

 

 

 

 

obviously, if i was a stock market sage i would own the Bills, but I think a retest of 18.5K on the dow is far more unlikely than 30K on the dow. I think the 18K was the retest, and it has bounced of that low on March 23rd to where we are today. WE should revisit this thread in September and beta beer at a Bills game for SNG!

 

Abd the NASDAQ, where most of the "stay at home" stocks reside( and where most of what we own individually resides) ..i think even less likely to touch lows of 6800 again.

 

I like you am shocked at how the market has recovered, and think it is overbought...and has some downside in it, but my gut is waiting to test the lows again will mean you are in cash for the next 5 years

Edited April 28, 2020 by plenzmd1

[Niagara Bill]

20 hours ago, Irv said:

I'm amazed at how the stock market is recovering from the impacts of the pandemic.  It's almost gained back half the losses taken during March.  Once this virus is behind us, is it unreasonable to think the Dow could be at 35K within a year from now?

There was no reason for the fall across the board to start with. The vast majority of companies would show bad quarters or 2 but there strength was still there. The Dow is controlled by nerd MBA with computer degrees who use algorithms not business sense to judge success. The stock markets have become computer games. 

Nothing has changed since the derivative driven crash of 08. 

[PromoTheRobot]

22 hours ago, Irv said:

I'm amazed at how the stock market is recovering from the impacts of the pandemic.  It's almost gained back half the losses taken during March.  Once this virus is behind us, is it unreasonable to think the Dow could be at 35K within a year from now?

 

Kind of suggests that the stock market is not a reflection of Main St. and Mom and Pop.

[Bill from NYC]

50 minutes ago, PromoTheRobot said:

 

Kind of suggests that the stock market is not a reflection of Main St. and Mom and Pop.

Has it ever been?

[K-9]

Well, when we inject 1.5 trillion dollars of liquidity to calm worried Wall Street bankers, things are expected to stabilize and rebound. Add another trillion or so to bail out big industries like airlines, hotels, etc., and the engine is greased even further. This was all predictable back in late March.