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Posted on 2/17/20 at 3:55 pm to rotrain
quote:That is pretty much my exact mindset. Even if this virus doesn't venture outside of the China border, their economy is essentially shut down for the better part of a month and will continue if things don't get better. That has to have trickle down effects to the vast majority of US stocks. I don't understand how we aren't seeing it yet in the prices.
rotrain
Posted on 2/17/20 at 4:43 pm to TigerTatorTots
quote:
I don't understand how we aren't seeing it yet in the prices.
I think you and especially rotrain are spot on. I feel we are getting ready for a solid dip that might turn into a full blown recession. We are not seeing the markets reflect this because so many people are in FOMO mode. They see everything through Rose colored glasses and this is just the flu. Trump tweets tariffs and the market jumps. Half of China shutdown for a few weeks and nothing yeah something big is coming one way or the other. I expect reality to catch up and hit home. I plan to embrace the crash with open arms and a fat bankroll.
Posted on 2/17/20 at 5:08 pm to ulsaint
The market has already had a couple of bad days largely blamed on the coronavirus.
Personally, based on what I’ve heard of it being milder but more contagious than the flu (I’m not claiming to be an expert), at this point don’t understand any of the fuss in the markets over it. But this is based on what I’ve heard. Seems like a small “catastrophe” that will be gone in a couple of months.
Personally, based on what I’ve heard of it being milder but more contagious than the flu (I’m not claiming to be an expert), at this point don’t understand any of the fuss in the markets over it. But this is based on what I’ve heard. Seems like a small “catastrophe” that will be gone in a couple of months.
Posted on 2/17/20 at 5:53 pm to buckeye_vol
quote:
Why would anyone just pull out of equities at any time
The next bear market is gonna hit some people like a freight train.
Efficient Market Hypothesis suggests that the market has already baked in this news. The true driver of this bull market is the Federal Reserve injecting liquidity into this market via repos.
Posted on 2/17/20 at 6:04 pm to Ingloriousbastard
quote:I keep reading comments about how this is no big deal and is not nearly as bad as the flu. I totally agree with that. I live in Asia and am shocked at the panic buying and over reactions.
based on what I’ve heard of it being milder but more contagious than the flu
However, none of that matters. What matters in the economy is that China has imposed some sort of movement restrictions on 800 million people. It has shut down manufacturing in the world's largest manufacturing base. Global supply chains are disrupted by this. The hope is that it all cranks back up soon, and we live off of inventories for a month or so until normalcy returns. If the restrictions are extended into March or April, the economic impact will be large. Fortunately, a year of volatile trade policy has helped supply chains get a bit more creative and flexible.
Again, don't conflate the health impact of the virus with the economic impact of the cure.
Posted on 2/17/20 at 7:19 pm to Spirit of Dunson
quote:
I keep reading comments about how this is no big deal and is not nearly as bad as the flu. I totally agree with that. I live in Asia and am shocked at the panic buying and over reactions.
So maybe over reaction but they have quite a few videos from China of 4 guys in hazmat suits literally dragging folks out of homes and stuff. They ain’t doing that because this is just the flu. They used dump trucks full of dirt at the ends of tunnels to lock in the population that ain’t because of the flu.
Posted on 2/18/20 at 3:57 pm to Spirit of Dunson
quote:
I keep reading comments about how this is no big deal and is not nearly as bad as the flu. I totally agree with that.
The flu has a mortality rate of .05%
The Coronavirus has a mortality rate of approximately 2% or higher.
* that’s if you trust the numbers coming out of China.
Not worse than the flu?? They’ve effectively shut down their entire country.
Is it not obvious how serious this is?
Posted on 2/18/20 at 4:29 pm to stout
If the total number had not of slowed, then things would be pretty dire. China has gone on full lock down. In some of the major cities, citizens can’t leave their house without a pass, and they are only giving passes once per 2 days to get necessities. The government is paying bounties on reporting sick people. Some of the major cities have all routes blocked coming in/out.
My point is that, they’ve gone to major extremes to limit the spread, and they are somewhat effective. Kinda.
Meanwhile cases outside of China continue to increase, but that’s skewed by the cruise ship.
I’d drop some links but at work. I’m not trying to shout doom and gloom, I just think this is a serious global issue. I don’t know shite about money, so moving 401k money into Bonds if I truly fear this would be smart no? Only for the short term of course
My point is that, they’ve gone to major extremes to limit the spread, and they are somewhat effective. Kinda.
Meanwhile cases outside of China continue to increase, but that’s skewed by the cruise ship.
I’d drop some links but at work. I’m not trying to shout doom and gloom, I just think this is a serious global issue. I don’t know shite about money, so moving 401k money into Bonds if I truly fear this would be smart no? Only for the short term of course
Posted on 2/18/20 at 4:33 pm to Athletix
I moved a little of my leveraged positions to cash. Just a little. I have enough bond hedging that I'm comfortable (for now) with maintaining most of my regular stock ETF positions.
And for the record, I never usually sell because of headlines. Ebola, elections, tarifs, geo political stuff, I ignore.
This is scarier.
And for the record, I never usually sell because of headlines. Ebola, elections, tarifs, geo political stuff, I ignore.
This is scarier.
Posted on 2/18/20 at 5:50 pm to ulsaint
In a global economy with many heavy hitters relying on JIT manufacturing processes, it doesn’t take much to throw things off in a single industry. Multiply that by a key country that is a vital part of most industries supply chain,”Shutting down” a good bit of production temporarily, and it makes sense the outcome would show up fairly quickly. If you have all the parts for an iPhone except the ones that come from say Wuhan, you can’t make an iPhone. Everyone backs up and there is a ripple effect across the board. The market is also always looking ahead, what’s happening now can be used to predict what will happen in the future. Such as Bobs company makes iPhone cases, Apple is not producing as many iPhones so Bob will cut back his production to meet projected future demand but he may take a slight financial hit due to his fixed costs. Multiply that by all aspects of the phone market and the ripple grows even bigger. Investors will pull back until Bobs position looks a little more promising.
I just used a very simple example with iPhones, but there is a real overall ripple across all industries and sub segments of all industries.
I just used a very simple example with iPhones, but there is a real overall ripple across all industries and sub segments of all industries.
This post was edited on 2/18/20 at 5:59 pm
Posted on 2/18/20 at 6:12 pm to ulsaint
Maybe the impact was blunted because we were already in a trade war, which made Chinese supply lines less important than hey would be otherwise?
Posted on 2/18/20 at 7:33 pm to Bestbank Tiger
quote:
Maybe the impact was blunted because we were already in a trade war, which made Chinese supply lines less important than hey would be otherwise?
For the last 10 years, the impact of any bad news has been blunted downside or outright bullish for stocks, because everyone assumes the Fed will respond to every significant pullback by creating more money from thin air. It's not a bad hypothesis since the Fed has never given much reason to think otherwise (at least not since the last time Ben Bernanke muttered something about "exit strategy" nine or ten years ago). But if they ever did decide to let financial markets find their own price level without "monetary stimulus", the concept of risk would be re-introduced in short order.
Either way, risk will eventually rear its head with an awe-inspiring display of deflation or inflation, or social disorder caused by perverse incentives, elimination of the middle class and massive wealth inequality. Even with digital money dispensed by modern day financial alchemists, there's no such thing as a free lunch.
This post was edited on 2/18/20 at 8:59 pm
Posted on 2/19/20 at 12:10 am to wdhalgren
quote:
Maybe the impact was blunted because we were already in a trade war, which made Chinese supply lines less important than hey would be otherwise
Could be part of it, I would make sense that larger manufacturers have backup plans in place. It has to be somewhat tough though, especially for smaller us suppliers who rely on board level components from over there. If they do not buy directly from China in bulk their suppliers have to be raising prices as the supply begins to fall.
I noticed on amazon a few days ago a few common off brand electronic items showing not in stock with no date in stock showing. Maybe it’s related, maybe not.
Posted on 2/19/20 at 11:55 am to td1
I might have saved the market. Guaranteed it will go up when I sell haha.
Posted on 2/20/20 at 9:04 am to ulsaint
Proctor and Gamble just warned on this quarter. Virus will "materially impact earnings" but ""We continue to believe, based on what we know today, that our fiscal year top and bottom line guidance ranges-and I emphasize ranges-remain the right ones," Chief Operating Officer and Chief Financial Officer Jon Moeller said in a statement."
So they felt the need to issue new guidance for this quarter due to a new "material impact" but full year won't change?
PG stock up .25% on such great news.
So they felt the need to issue new guidance for this quarter due to a new "material impact" but full year won't change?
PG stock up .25% on such great news.
Posted on 2/27/20 at 3:20 pm to rotrain
This sucks. I'm afraid to even look how far down I am now. And I sold a lot before it got bad.
Posted on 2/27/20 at 3:36 pm to rotrain
They’re all going to start re-evaluation and lowballing now. That’s the name of the game. Under promise and try to over deliver.
Posted on 2/27/20 at 3:52 pm to arcalades
quote:
the coronavirus is not a big deal unless you are old, very young, or otherwise weakened by some underlying ailment. The flu is far far far worse.
Maybe so but fear of getting it crippled China's economy. Try to imagine all the major countries following suit. Fear and speculation alone could create a global disaster.
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