Not many investors were paying attention throughout 2019 to the fundamentals and what you are seeing is the reality of an overbought market come back down to earth, with extended issues also due to the virus.
If Buffet holding over 100billion in cash is not a deciding factor on whether the market is expensive & overbought⊠Many could not enter the market because of valuations.
But people continued to pump pump pump into 2019/2020 expecting it to keep going up. Was buffet pumping? Not at all.
I have bought into great quality businesses, I am not stressed at all. In fact I am loading up, its like a closing down sale.
I also spread bet so I have been shorting the S&P 500 since the 25th of Feb and going long on gold.
There is a long term trend line at 2500 once the price hits that I expect it to bounce back up. At least temporarily
Hopefully not this thoughâŠ
The same people were saying the same thing in 2015 PJ, hindsight is always 2020.
Who could have honestly predicted a global pandemic caused by a Chinese virus and Saudi Arabia and Russia having an all game of chicken over oil?
Yes there may have been fundamental issues wrong with certain companies PE Ratios and Debt ratios, but itâs simply been a black swan thatâs caused this.
Everytime the market collapses people have people have thought it was the end. And yet it wasnât, this isnât any different. If the great party was to be over then I donât think money would matter anymore anyway.
Itâs true. Just look at one basic indicator, is Buffett buying in 2019âŠ? No. Heâs being patient.
He put 45 million into Delta Airlines in February, and itâs since down 35%.
Anyway, Iâm not getting into this. The words head and brick wall come to mind. Just hope all goes well for your and everyoneâs investments going forward, as what has been has now happened and we canât change it.
What happens to the US airlines is quite similar to 911 era. As long as companies can survive through, they will come back up eventually. Time the exact bottom? Only Jim Cramer and the likes can.
Without getting philosiphically nihilist âŠItâs irrational to panic over this âpandemicâ. There is just no point.
There are only two outcomes:
One of those scenarios WILL happen. That is all.
If you back the former, youâd be insane not to buy cheap shares now.
If you back the latter, youâre dead anyway.
Life Finds A Way - Jeff Goldblum
Is the market actually cheap even after the recent drops? Historically itâs still in top quartile for price to earnings ratio⊠that worries me, Another 20-30%drop anyone?
This might sounds crazy but everytime Trump says something the market drops! At first I thought this whole thing would last only two weeks but now I think the market could crash further. Iâm still not sure if I should slowly add or wait till the bottom. How do you know where the bottom is?
You donât.
For many, the answer is to build up cash reserves. Then even if you miss the bottom, you can at least start putting money back in once things are climbing up.
Granted, youâll miss out on indivual stocks which drop perilously low and then rebound way up in short order. But catching those is effectively gambling, and youâve more chance of backing one that drops perilously low- and keeps dropping instead.
The bottom is months away.
Our health system is expecting to be dealing with Covid-19 for around 6 months at a level where demand outstrips resources. The economy will be on lock down for months.
The US will be hit far worse than Europe.