Reply With QuoteHow do you feel about index ETFs, bought over the next 12 months as an investment over the next 5-10 years? Is this likely to be a losing bet? Is Covid-19 that much of a game-changer?Originally Posted by Raffe
Testing the upper limit of investing and i think the market is deluded in hoping that we can restart the economy by end of May - nothing officially yet to kill that hope. When that hope is dashed watch the market crash.
How do you feel about index ETFs, bought over the next 12 months as an investment over the next 5-10 years? Is this likely to be a losing bet? Is Covid-19 that much of a game-changer?
I don't know.
But I see absolutely no reason to buy equities until prices have adjusted to the new normal. That may still be a while off.
I may obviously be wrong on this, but this is what I think and how I invest.
Someone who lies about the little things will lie about the big things too.
Thanks. I agree that stocks haven't hit bottom yet, but I'm guessing that the blue chips will weather the storm, and come back strongly as the global economy limps back to life in, say, 6 months' time. OTOH I may well look back at this post with some regret!
Online chatting with a Hedge Fund mate who basically thinks with 99% probability I will lose my wager with Raffe. His words:
The economic pain hasn't actually hit properly yet. We are a month in to this, anyone going out of business now was already in trouble at the ATH, and it was priced in.
Next couple of months is when normal businesses start going under. Summer is when well run businesses are going to go pop.
I'm waiting for an unexpected big company to go bust to set off the next downward spiral in the market.
Forget deaths from Corona. The market has an Ivan Drago attitude to your granny dying. Harsh but true. The deaths from this are priced in, doesn't matter if we overcounted or undercounted in models. It is companies going bust that will hammer the market. And they will.
Just to say its not Speedy who has done the dealing
While it is tempting to think about investing after reading what I have made in a short period that is not the norm, the markets are very stormy so stocks that were £10 a share not that long ago are now in the 3's and fluctuating like crazy, all I have done is watched some of the waves and invested when I think its a good time.
But every time I do invest I know it could drop, that would mean my money is tied up with the possibility of it not coming back to that value again or worse lose the lot.
One of the reasons I'm not saying the companies I invest in is I don't want people to be tempted with money they cant afford to get locked up/lose as it can happen.
I agree about the mortgage but not the guaranteed to lose, if that was the case no one would invest and the markets would be defunct.
For me it comes down to percentage of risk and I use this for most financial decisions in life, if I feel its weighted in my favour by a certain amount then I'll take it, so far this has worked for me but I know there is a chance I could come unstuck..
Below is my recent trading history from my current trading account, I have another trading account that I'm currently closing but made around £350 with them.
I have colour coded the buy and sells, as you can see I lost 50p on a penny share as I invested a few hundred in a couple of small companies, after this I stuck with a big bluechip FTSE 100 company that has so far seen me okay, as you can see by the time and dates I'm in and out normally within 24 hours..
Last edited by murkeywaters; 11th April 2020 at 11:03.
Exactly that Ryan. This sledgehammer is going to be delivered gradually. The big issue here is money in the pocket for most. People were living hand to mouth, now they will have no money, more unemployment, more government debt, people having no spare cash to buy things, people cost cutting, car sales falling off the cliff, house prices declining, repossessions going up, bankruptcies increasing and so on and on and on.
I assume fund managers mitigate the risks for the money they manage in times like this so what do people think the impact will be over the next few weeks on 'well managed' funds?
Given the money governments have thrown at supporting businesses through this lockdown, if removal of the restrictions are successfully managed then there seems no reason the economy won't gear up accordingly, although there's undoubtedly much pain to be suffered by many individuals and those businesses most affected. I don't doubt many 'market professionals' will profit hugely from the volatility, liquidations, etc, partly at the cost of the taxpayer. Again.
To get back to good news, fingers crossed the prospect of a vaccine (or beneficial medication) before the year end comes to fruition!
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If you listen to people who should know, the chances of a vaccine coming to the market before next summer are pretty much zero.
And re government support for companies: this is only about survival, companies are not supported on order to turn a profit. None of us have ever lived through a 25% drop in GDP - and that's the most optimistic scenario.
Someone who lies about the little things will lie about the big things too.
After 20+ years in the markets, all I can say with certainty about this crisis is I have not seen anything like it.
I echo the sentiment that we are far from the bottom and the likelihood that March was the worst seems highly unlikely as the US and Japan are only now coming under rising pressure from Covid-19 deaths and lockdown. The first and third largest economies in the world.
The new definition of insanity: equity markets had their best week since 1938. The same week that the U.S. announces another 6+ million unemployed (a total of 16.6 million in 3 weeks).
We haven't even started on forced liquidations but with tens of millions of global citizens suddenly been thrown on the dole, it will be a matter of weeks not months. 60% of working Americans do not have in excess of $1000 in their saving accounts. Nor do they have an NHS.
Equities are not my speciality, and picking bottoms is a messy business, but I think we will see FTSE 100 back below 5k and that is my target to buy.
Gold is my other focus (and crypto to a lesser degree). 2.3 trillion of stimulus in the U.S. alone, that is a hell of a lot of inflationary pressure!
Fingers crossed.
http://news.sky.com/story/coronaviru...ntist-11971804
You are applying a general principal to advice I gave on a very specific circumstance, ie someone who said they haven't a scoobie do. When someone says they haven't a scoobie do on what they are doing, what do you think is the percentage of risk for them trading in normal market conditions nevermind the current situation?
And I can tell you the professionals are not playing the equity markets currently like they normally do, particularly on the long side, they will largely be divested long ago.
Yes I agree on the front that if you have no idea then it is likely you will come unstuck, I'm certainly not stock market savvy like Raffe but I'm learning all the time, I see it as another string to your bow that you can turn too if needed.
If you have the discipline, which you look like you have then you could do well out of this. The sea is way too choppy for me to consider day trading but admire others for braving it. Good luck and godspeed
The issue with these forced liquidations and bankruptcies is that if everyone is doing it then the lenders are screwed. So I suspect the central banks will prevent liquidations en masse by funding lenders to provide extended payment holidays.
Upshot is we need to get back to work asap and a difficult decision needs to be taken soon.
All this money printing has a frightening consequences, i will be following closely the price of gold over the coming months. I can see it easily breaking 1800 soon. You don’t need gold until you need gold, should even out S&S losses.
You are aware that Bretton Woods no longer applies?
Someone who lies about the little things will lie about the big things too.
Agreed - 4500 FTSE and 15000 Dow ?
Well it’s had a couple of runs at 1700 recently, so I don’t see it being too long before it’s near 1800.
That’s also my personal thought, difficult decision needs making. It’s going to be tough, even brutal but if we don’t kickstart the economy soon there could be horrendous consequences down the line. Extreme famine, poverty, civil unrest, seen on a global stage
I'm LT bullish so any dips I'll be buying. My thought is that yes we will have economic challenges ahead but if central banks around the world do what they have done in the past and just keep printing money - not sure there will be as much of a depression, or any, as people think.
It's unheard of that governments are paying people's wages and as like ours are saying - this virus, it's none of our fault right? To me, they will do everything they can to keep the economy afloat and whilst there is a moral hazard to this (supporting fundamentally bankrupt/failing companies) I can see central banks just cancelling/writing off borrowings to the government, or at the very least issue extremely long term bonds at near zero rates should there be payback.
What I've been thinking lately is what is the value of money? Seems like a meaningless concept with all this limitless help by central banks around the world.
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That’s why gold is recommended as a hedge.
Is it?
Someone who lies about the little things will lie about the big things too.
Well is part of the argument.
https://www.investopedia.com/article...o-own-gold.asp
I totally agree!
Billionaire Mark Cuban explains how stock-market bears feel about bulls: ‘I don’t think they are really factoring in what they are going to see on the other side’ of coronavirus
https://www.marketwatch.com/story/bi...rus-2020-04-08
Don't hold your breath.
https://www.bizjournals.com/charlott...-recovery.html
I am not qualified to discuss investment opportunities, but I would like to pit forward the obvious:
1) one of the benefits of the current crisis is that large swathes of people are discovering that it is perfectly efficient to work from home. Skype, Team, Zoom are in their infancy and will be more mature products before we beat Covid
2) the first consequence of the above is that companies may reconsider their needs in terms of business premises, and a few floating desks, a couple of meeting rooms will be all what’s needed for many. The business estate market is going to take a big hit. Many may be converted into flats, so the housing market will increase its offer.
3) likewise, travel expenses will be slaughtered, a) because companies will be desperately short on cash and b) because Zoom et al. will be excellent and cheap alternatives. So airlines will be buggered on the business market.
4) when a vaccine becomes available, many countries will have their population immunised. But many others will not because of costs snd infrastructure. Tourism will therefore take a massive hit. Airlines will again be buggered, this time on the leisure market.
All this to say that I don’t think airlines are where I would put my money, at any price.
'Against stupidity, the gods themselves struggle in vain' - Schiller.
Don't disagree in the main SJ but the products in 1 have been around for years. I think that there is room for significant innovation in these areas, in features, security and usability.
Webex, for instance, has shown how bad it can be in recent weeks.
Indeed they have. But companies were reluctant because they were not used to it, and because there were (and still are) issues, especially security ones. But having been forced to use them many may not go back, especially if it can save them money
'Against stupidity, the gods themselves struggle in vain' - Schiller.
Agreed
Scary times, as I do not know enough about the markets, I will be sitting on the sidelines. I do agree that many very large companies will go bust... maybe the first few may be bailed out but it can’t happen forever. I worked with a very large O+G and people are rightfully concerned for the next 18 months, we see demand being decimated until early 2022.
That said, energy and some other sectors are Center to any recovery so if you bet in someone with a strong balance sheet for the long-term, you Have a reasonable chance.
That would be the single best news of this century.
Could be the game changer that's desperately needed. Cross everything.
For a bit of light reading I am currently working my way through The Ascent of Money by Niall Ferguson.
Just finished off the chapter that deals with the subprime crisis and the final paragraph reads...
These rules, needless to say, do not apply exclusively to house holds. They also apply to national economies. The final question that remains to be answered is how far - as a result of the process we have come to call globalisation - the biggest biggest economy in the world has been tempted to ignore them. What price, in short, a subprime super power?
I see more upward movement generally speaking in the markets this morning, was anticipating some downward movement after Macron confirmed what we all anticipate is coming our way later this week, extension to the lockdown. Surprised to see the likes of Easyjet etc continue to make gains on the open considering this news.
Yesterday was down in the US, today reversing that on talk of ending the lockdown in Germany and other places.
Up and down, all the time.
Someone who lies about the little things will lie about the big things too.
So a mixture of measures coming up, this is going to get interesting.
I think we are still weeks, maybe months, away from markets finding the correct level. Whatever that is ...
Once major companies start reporting earning and future estimates maybe we will get an idea of direction
it is easy to be lulled into a feeling of false security when markets are relatively quiet even over a few day period
I don't think that there will be any good news around, as they say, "anytime soon"
Trump appears to be making a "balls" of it in the US........ but what would you expect, he is just a "wind-bag"
Last edited by BillN; 14th April 2020 at 09:10.
As I mentioned before, the market is pricing "hope" in - the race to open up economies before end of May. Especially in America - just look at Trump's tirade yesterday, the pressure is on. Once it transpires that cannot happen, watch for the correction.
Even if somehow it miraculously does happens, things will not go back to normal. In my opinion markets have priced in a V shape recovery. Again, correction will come when that doesn't happen.
The risk is the second wave of outbreak prior to vaccine, even if you do open the economy, it will be massively subdued
Have a look at the recent RNS from Restaurant Group, don’t expect to open before June and even then, expect social distancing requirements to mean capacity is hammered through to Q4
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I think the second wave outbreak is a huge key factor, imagine the feeling of starting to get back to normality, the thought of travel, holidays and just a good feeling it’s over, markets “should” start to rebound creating more positivity, then BANG, second wave of CV starts to sweep through the globe..
Governments then have a choice of their economies taking a second kicking vs more blood on streets, I think you may see certain leaders let their people die in exchange for power and money..
That’s my thoughts, I’m expecting Trump to throw people under the bus to get the economy going again. I’m just wondering if he can actually do it...
I agree about your final point, it is a gamble some leaders might take, but I think they've failed to take into account the impact this has had on a lot of peoples mental outlook, most folks simply won't go back to comsuming as per normal just because lockdowns are lifted, I reckon even the well resourced will be more 'careful', 'prudent', about how they spend. Just my view.
Some key earnings calls in the US today. JP Morgan for one.
Thing is, the economy in the US has just been inflated by the Fed printing machine going brrrrrrr, brrrrrrr, brrrrrrr. So it is a fake market which should be sinking like a dart but probably won't as trillions of dollars have been pumped into its rotting carcass
Easy to sort that though. Tax them higher and the government spends that on goods and services (infrastructure etc). So you force people to spend by spending on their behalf, which creates more jobs and more expenditure and so on.
Not sure that concept will be winning elections though....
Someone who lies about the little things will lie about the big things too.
JPM earnings down massively with quadrupling of credit provisions YOY, pre-market up 1.6%...okaaaaay then. JPM the most resilient of the banks, expect the rest to show significant losses
Interesting concept, when do payment holidays become bad debt, UK looks like it’s kicking the provisions into Q3/Q4 but they will come eventually for the U.K. banks
Sold out most of my equities this morning taking profits in last couple of weeks. FTSE beginning with anything near a 6 is a sell
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Agreed not a vote winner, and unlikely to keep the masses happy, passive either.
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