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The 2020 Stock Market Crash Thread
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Hansel Offline
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The 2020 Stock Market Crash Thread
The Dow just cratered by a humongous 1800, triggering circuit breakers that resulted in a trading halt that lasted for 15 minutes. It's been barely salvaged by 500 right now, but nothing is going to save this now. Oil has plummeted, bond yields are negative, and the supply chains are broken. The Fed is out of bullets, having slashed interest rates to a depressing low of 1-1.25% already. We all know there's a financial tidal wave incoming for a while now, but this is officially it guys. This could very well be the year on which the dollar falls.

I advise everyone to pull out if you haven't done this already. Cash is king. Don't even put your money on gold. Traditionally gold is seen as a safe haven but this time it's a credit attack on the dollar, the means of trade itself. Try to convert the dollar to foreign currencies. The GBP, AUD, Yen or Swiss franc should do for a while.

Seeing we have no thread specifically dedicated to this, hopefully this thread will serve as a platform where we can share instant info and predictions about the market as well as its implications.
(This post was last modified: 03-09-2020 09:50 AM by Hansel.)
03-09-2020 09:24 AM
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22qwert22 Offline
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RE: The 2020 Stocks Atlantis Thread
What about Div stocks, For example MO has returned almost 7% div's for the past 20+ years?
(This post was last modified: 03-09-2020 10:31 AM by 22qwert22.)
03-09-2020 10:28 AM
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Hansel Offline
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 10:28 AM)22qwert22 Wrote:  What about Div stocks, For example MO has returned almost 7% div's for the past 20+ years?

Nothing can stay healthy this year. You need to pay a profit in order to pay a dividend in the first place. Right now we are witnessing a collapse of the stock market that could count into the Top 3 greatest collapses of financial history. Multiple facets of the global economy will follow. I had originally predicted a stock market collapse at the end of 2020, but this has been prematurely detonated by the coronavirus pandemic. I suspect part of the reason China quarantined itself is, in the grand scheme of things, flipping the poker table with the US upside down.

I expect the economic crisis to go this way:
1. Stock market crash. This has actually quietly started since 20 Feb, the day on which the pandemic spread to the Diamond Princess cruise ship in Japan. Counting from that day, the Japanese market has plummeted by 16% from 23666 to 19698, the DAX, from 13693 to 10701 for a whopping 22%, and the Dow, 29348 to 25546 (11:39 EST dated 9 March), that's a 13% fall. All this in 2 weeks. With the coronavirus situation worsening by day, there's no way the stocks regains its footing in the short term. You might still be able to get away with some dividends this quarter, but it will be wise to flee the market after that.

2. Oil crisis. If you pay attention to international news, you'd notice Russia and Saudi Arabia is in the midst of a devastating squabble over oil production. Russia has refused to reduce production as requested by OPEC despite oil price plunging to a low of 34.36 dollars. On the face of it this yields no benefits for Russia, it being the leading commodity for Russia's fragile economy. Yet, a cliff fall in crude prices puts another knife in the US. Currently, US shale gas has a base production cost of $40-60 due to its complicated extraction process. (source: https://www.investopedia.com/articles/ac...al-oil.asp) If oil prices stay as low as this for a period longer than 3 months, we could very possibly be seeing the end of the fracking industry. It would set Russia's economy back for 10 years, but it would also cripple the petrodollar. The exact length of time would have to depend on the COVID situation however, more specifically, the demand for oil by the aviation and automobile industry. If COVID doesn't falter by summer, we are going to see the closure of at least half a dozen airlines across the world, as well as the reduced usage of automobiles due to quarantines. Furthermore, the foundation of the US' reign is based on the petrodollar ie. the world's dependence on the USD as the currency to trade. If the stocks haven't crashed a hard as this, this weakness would not have been exposed, and Russia would not have dared to engage in an oil price war - an indirect all-out assault on the US economy.

3. The dollar.

4. US bonds. But that will take a while.

To put it short, MO is not a safe investment. For Altria to make a profit, you need enough actual people to smoke. If there isn't enough people that can afford to pay to char their lungs, they don't turn a profit to pay dividends. Simple as that. I would go so far to say that in a market crisis, many countries could jack up tobacco taxes without hesitation.

So this is where we are right now. We are living in interesting times in a precarious position. For too long has the real crisis been postponed, and too much politics is involved in the finances, it is impossible for the ordinary investor to accurately predict the directions. This is not a time when we can afford to gamble. Please refrain from investing in any stocks for your own stake. Cash is king.
(This post was last modified: 03-09-2020 11:33 AM by Hansel.)
03-09-2020 11:26 AM
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El Chinito loco Offline
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RE: The 2020 Stocks Atlantis Thread
So, if your prognosis is that the market is going to collapse overnight and long term then logically speaking you should be loading up on index puts or shorting S&P futures. If you are right then you'll be immensely rich within 6 months to a year.

I don't doubt that there is serious distress right now in the market.. but 1 year out there has to be bigger signs pointing to a bear market aside from alarmist sources. Black swan events need to show that they can collapse industry for that to happen. The financial crisis in 2008 was an example of a collapsing industry. 2000..collapsing industry.
03-09-2020 11:44 AM
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RE: The 2020 Stocks Atlantis Thread
If you believe this is just a traditional crash you're going to get slaughtered. This has been a long time coming and the tools they are going to use will add rocket fuel onto this.

Follow Gregory Mannarino on youtube and twitter. He has nailed this very well and is telling people to position themselves for a race to the bottom.

Yes you can make money but to do that you need to be doing in/out method which he does.

I suggest you get cash on hand and wait for gold to go on sale as margin calls are given and these assets need to be sold. Credit freeze is coming and the FED is going to screw everybody who isn't in the 1%. Corona virus has and will continue tos crew the supply chain and a lot of other things - believing otherwise is a bad move.

Donald Pump is leading you to the slaughter with his propaganda and lies. If you believe this POTUS then there are no words to help you. Just hope you dont get nailed to the wall.
(This post was last modified: 03-09-2020 12:20 PM by Foolsgo1d.)
03-09-2020 12:19 PM
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Hansel Offline
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 11:44 AM)El Chinito loco Wrote:  So, if your prognosis is that the market is going to collapse overnight and long term then logically speaking you should be loading up on index puts or shorting S&P futures. If you are right then you'll be immensely rich within 6 months to a year.

I don't doubt that there is serious distress right now in the market.. but 1 year out there has to be bigger signs pointing to a bear market aside from alarmist sources. Black swan events need to show that they can collapse industry for that to happen. The financial crisis in 2008 was an example of a collapsing industry. 2000..collapsing industry.

The inverted yield curve for US bonds that has been the case since 14 August is obviously a big sign, if that isn’t enough for you? And the 0% interest rates that are universal amongst European countries, or the negative yield German bonds since last August? And the failure of said countries to support the market after further rate cuts? It is apparent capital lacks the faith to stay in the market anymore.

Truth is, I’m not very sure about the dollar anymore. I would rather put my money on the AUD since I don’t have the time to keep an eye on the stocks every second. I don’t doubt options and futures could be quite profitable if correctly administrated, but there’s quite a bit of uncomfortableness I harbor towards the market.

With all respect, this is not simply a black swan event, nor just a collapsing industry. This is a collapsing currency. The US did not have so much debt in 2008 or 2000. You need to understand COVID-19 is only a trigger that happened prematurely to spawn the current disaster.
03-09-2020 12:19 PM
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RE: The 2020 Stocks Atlantis Thread
OP you speak in certainties. Always a dangerous thing. The permabears who predicted a stock market crash (this is a correction btw) are finally proved correct after how many years?

My take on the correction is as follows. Investors have recency bias, keep thinking we will see a 2009 crash again. The role of algorithm trading keeps going up causing more volatility, which is why trading was stopped today. The role of most common index funds (fundamentally stupid imo as it just creates a portfolio where it buys indiscriminately the large caps) makes people think that is what the stock market is. Its not, its a market of stock(s). At this point financials, oil, tourism are basically at recession levels, not sure how stuff like this affects profitability in say google or verizon. Anyway, since retail investors (mostly boomers lol) own index funds they lose their shit when things go down like this, so to "protect" their retirement they sell. The media hypes up coronavirus, the fear takes over and now we have a situation which will not affect profitability at many companies or will be short lived for stocks in oil, tourism and financials. Really remarkable how people don't have a long term horizon and panic sell. Most people on this forum are below the age of 40, they can profit if they buy at these levels given their time horizon. I read comments like the OPs in investing forums like seekingalpha, its amazing the level of fear people have over this, which will likely be over in a month or two and not cause permanent damage to the global economy.

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(This post was last modified: 03-09-2020 12:45 PM by bacon.)
03-09-2020 12:38 PM
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 12:38 PM)bacon Wrote:  OP you speak in certainties. Always a dangerous thing. The permabears who predicted a stock market crash (this is a correction btw) are finally proved correct after how many years?

The market should have gone down multiple times and the system was brain dead since 08. The central banks have colluded to pump the markets higher regardless.

Donald Pump himself spreads propaganda to lie to people saying debt is a good thing. So the market got rid of price discovery and just went up and up, making DJT look good.

Do you not see a real issue here? Do you not see the fallacy of a system that can only go up and is not allowed to correct properly? What we're seeing now is a potential over correction and the massive debt bubble crushing everything in sight.

We never recovered from 08 and the bull market since then was done off the back of debt expansion. The brain was dead and now the body is sure to follow.
03-09-2020 12:47 PM
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RE: The 2020 Stocks Atlantis Thread
Quote: If oil prices stay as low as this for a period longer than 3 months, we could very possibly be seeing the end of the fracking industry. It would set Russia's economy back for 10 years, but it would also cripple the petrodollar.

Well this a calculated move by Russia They met with the Saudi's in Vienne, They knew the Saudi's will retaliate if they didn't co-operate with the production cuts.

So I think the Russians are probably ready for this? They won't be set back 10 years or much so. Because if it was a serious threat to their economy they only needed to cut production by about ~10% or so.
03-09-2020 12:57 PM
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Hansel Offline
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 12:38 PM)bacon Wrote:  At this point financials, oil, tourism are basically at recession levels, not sure how stuff like this affects profitability in say google or verizon.

I echo foolsgold in that we have never recovered from 2008. It looks like as if we’ve gotten out of the mess, but speaking from a federal perspective, the Fed have been slashing rates year after year to prop up the bubble that is the market, while PMI has remained stagnant. The tech giants are mostly funded by stock buybacks. In fact, Boeing and Apple are the biggest purchasers of their own shares.

Quote: https://www.google.com.hk/amp/s/www.cnbc...tocks.html


This is a cancerous phenomenon that will end abruptly given the chance. In fact, COVID wouldn’t have caused such a big market loss if the market wasn’t blown out of proportion in the first place.

Quote: So I think the Russians are probably ready for this? They won't be set back 10 years or much so. Because if it was a serious threat to their economy they only needed to cut production by about ~10% or so.

I’m predicting this to be a global large-scale recession, I think things will spiral out of the realm of oil in the near future, which is why I think Russia did this. It’s a golden opportunity to lash out at a flailing US when they’re already rather poor and have relatively little to lose.
(This post was last modified: 03-09-2020 01:13 PM by Hansel.)
03-09-2020 01:10 PM
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 12:47 PM)Foolsgo1d Wrote:  
(03-09-2020 12:38 PM)bacon Wrote:  OP you speak in certainties. Always a dangerous thing. The permabears who predicted a stock market crash (this is a correction btw) are finally proved correct after how many years?

The market should have gone down multiple times and the system was brain dead since 08. The central banks have colluded to pump the markets higher regardless.

Donald Pump himself spreads propaganda to lie to people saying debt is a good thing. So the market got rid of price discovery and just went up and up, making DJT look good.

Do you not see a real issue here? Do you not see the fallacy of a system that can only go up and is not allowed to correct properly? What we're seeing now is a potential over correction and the massive debt bubble crushing everything in sight.

We never recovered from 08 and the bull market since then was done off the back of debt expansion. The brain was dead and now the body is sure to follow.

Corporate profits have gone up significantly in that time, so the comment that we have not recovered since 2008 has no truth to it.

Debt can be very helpful to a business as long as the profitability of the investment they make with the debt exceeds the interest plus principal payments.

Debt obviously is a disaster for individuals who use it to with consumer debt not backed by real assets, which is why some debt (mortgage) is beneficial to the consumer as he can build equity with the debt.

Debt for governments is not the same thing as all of the above since governments can simply inflate the currency away to make the debt less. In the case of the USA, the dollar will continue to be the safe heaven currency merely because what are the alternatives? It won't be the Euro, Yen or Pound, whose respective countries have even more debt relative to GDP. So the US government via the Fed can and probably will continue to inject liquidity and increase inflation. But if this is the future, why on earth would you want to own cash or bonds (debt) which will be deflated away? Stocks, gold, real estate would be your best asset classes in such a scenario.

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(This post was last modified: 03-09-2020 01:17 PM by bacon.)
03-09-2020 01:11 PM
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 01:10 PM)Hansel Wrote:  
(03-09-2020 12:38 PM)bacon Wrote:  At this point financials, oil, tourism are basically at recession levels, not sure how stuff like this affects profitability in say google or verizon.

I echo foolsgold in that we have never recovered from 2008. It looks like as if we’ve gotten out of the mess, but speaking from a federal perspective, the Fed have been slashing rates year after year to prop up the bubble that is the market, while PMI has remained stagnant. The tech giants are mostly funded by stock buybacks. In fact, Boeing and Apple are the biggest purchasers of their own shares.

Quote: https://www.google.com.hk/amp/s/www.cnbc...tocks.html


This is a cancerous phenomenon that will end abruptly given the chance. In fact, COVID wouldn’t have caused such a big market loss if the market wasn’t blown out of proportion in the first place.

Buybacks are basically a tax efficient strategy for returning capital to shareholders. Plenty of studies to show that it is preferable to dividends for long term returns. Stocks that pay out a dividend go down after the payout date, so its all taken into account for the share price of those stocks.

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03-09-2020 01:15 PM
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RE: The 2020 Stocks Atlantis Thread
I'm not sure what to do. I've made the mistake of pulling at at the wrong time before, right at the bounce. On the other hand, I don't want to cling to an anchor.
03-09-2020 01:23 PM
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Hansel Offline
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 01:15 PM)bacon Wrote:  Buybacks are basically a tax efficient strategy for returning capital to shareholders. Plenty of studies to show that it is preferable to dividends for long term returns. Stocks that pay out a dividend go down after the payout date, so its all taken into account for the share price of those stocks.

You are completely missing the point. You are solely concerned with implications buybacks have in the market, which is akin to heating oil in a frying pan. It sizzles and cracks, but it is empty heating.

Debt is healthy when you are borrowing to increase productivity by investing in real business expansion that result in proper revenue generated by real, material output. Taking on debt to finance their buybacks, is bad management, given there are no revenue-generating instruments to finance the corporation to pay off the debts. If you took a closer at the source I’ve given, you’ll notice a large part of the shiny names are propped up by the bull market and nothing else. Apple’s market share has been shrinking rapidly, and yet its stocks rise unhealthily - another indicator of hollow dealings. Don’t you sense another batch of Lehman Brothers?
03-09-2020 01:29 PM
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RE: The 2020 Stocks Atlantis Thread
That’s exactly the opposite of every wealthy investor’s advice on what to do during a correction and/or recession. Every single one of them says to stay level-headed and not panic sell, if you have the temperament to view things long-term. If anything they’ll tell you that corrections and recessions are buying opportunities for those who know how to choose stocks intelligently.

Panic if you want but good decisions are rarely
made in the tidal wave of strong emotion.

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(This post was last modified: 03-09-2020 01:41 PM by MichaelWitcoff.)
03-09-2020 01:40 PM
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Dr. Howard Offline
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RE: The 2020 Stocks Atlantis Thread
There is already a stock market thread https://www.rooshvforum.com/thread-60358.html

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03-09-2020 01:42 PM
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RE: The 2020 Stocks Atlantis Thread
(03-09-2020 01:11 PM)bacon Wrote:  Corporate profits have gone up significantly in that time, so the comment that we have not recovered since 2008 has no truth to it.

I'm talking individuals, the common man. They have not received cheap loans and stock inflations through massive buybacks and the hedge funds buying everything in sight thanks to QU from the Fed.

Quote:Debt can be very helpful to a business as long as the profitability of the investment they make with the debt exceeds the interest plus principal payments.

The stock price is fake, no asset price discovery. These companies have taken up gargantuan debt loads which they need to roll over. Where do you think things will go when these stocks start to plunge in value?

Quote:Debt obviously is a disaster for individuals who use it to with consumer debt not backed by real assets, which is why some debt (mortgage) is beneficial to the consumer as he can build equity with the debt.

The whole point of debt is paying it back but cheap loans gives the false sense of security that you can keep doing it for extended periods. Individuals with mortgages are paying back way more than they needed even in good times.

Quote:Debt for governments is not the same thing as all of the above since governments can simply inflate the currency away to make the debt less. In the case of the USA, the dollar will continue to be the safe heaven currency merely because what are the alternatives?

I see your angle now. The US Petro dollar- backed by the might of the US military, is the only thing keeping the US as a safe haven. Capital inflow into the US was a result of everywhere else being completely un-profitable.

Taken a look at US bond yields lately? They have gone through the floor and the yield curve is basically non-existent. The only reason it was even there these past few months was because of the FED printing like a madman.

Aka: Massive amounts of debt.

You are fixated on the now when in fact we could very well be seeing a massive dollar devaluation coming which makes things even worse. Try telling the Trump supporters that when they get laid off and prices on the shelves go up.

Oh and the Saudis and Russians are now fighting each other to destroy US shale. Good luck with your energy security while it lasts, even in the so-called good times US shale was propped up by a ponzi scheme and bailouts.

Quote:It won't be the Euro, Yen or Pound, whose respective countries have even more debt relative to GDP. So the US government via the Fed can and probably will continue to inject liquidity and increase inflation. But if this is the future, why on earth would you want to own cash or bonds (debt) which will be deflated away? Stocks, gold, real estate would be your best asset classes in such a scenario.

The US dollar has a limited shelf life and this collapsing financial system will possibly usher in a new currency as the US dollar becomes worthless. The central banks know exactly what they're doing and this could see the dollar lose its status as world reserve currency.

Gold, silver and crypto will not be the end solution as the central banks do not control those assets. They will create something new.
(This post was last modified: 03-09-2020 02:02 PM by Foolsgo1d.)
03-09-2020 02:00 PM
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Hansel Offline
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RE: The 2020 Stock Market Crash Thread
(03-09-2020 01:42 PM)Dr. Howard Wrote:  There is already a stock market thread https://www.rooshvforum.com/thread-60358.html

This is more like a prepper thread where we aim to limit damage and make profit after the worst is over. The other thread is filled with people trying to make short term gains.
03-09-2020 02:11 PM
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RE: The 2020 Stock Market Crash Thread
Are my FDIC-backed CDs safe?

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03-09-2020 02:12 PM
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RE: The 2020 Stock Market Crash Thread
(03-09-2020 01:40 PM)MichaelWitcoff Wrote:  That’s exactly the opposite of every wealthy investor’s advice on what to do during a correction and/or recession. Every single one of them says to stay level-headed and not panic sell, if you have the temperament to view things long-term. If anything they’ll tell you that corrections and recessions are buying opportunities for those who know how to choose stocks intelligently.

Panic if you want but good decisions are rarely
made in the tidal wave of strong emotion.

If you listen to what wealth investors say, you might as well roll the dice to predict the future. The market is comprised of millions of companies and individuals, each having their own considerations and emotions. Not every moment in history is created by levelheaded strategists, and sometimes when they happen, no amount of rationality will save you, and you just go with the flow. You don’t stay at home when a flood happens, you run away. You can’t just expect everyone else to stay calm like you, and a sole investor staying calm when millions of others panic is of no use.

You are also overestimating the real profitability of the shares you own. Are you sure they are stocks that make a profit from real productivity, or are they simply rolling up the carpet to make it look bigger? If it isn’t, then you better ditch it.
03-09-2020 02:19 PM
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RE: The 2020 Stock Market Crash Thread
(03-09-2020 02:12 PM)Roosh Wrote:  Are my FDIC-backed CDs safe?

Depends upon the bank or credit union that issued the CDs.

The FDIC S.O.P is to make a larger bank take over assets of the failed bank while the ggovernment absorbs the bad debts so unless BoA goes bankrupt your FDIC insured CDs should be ok... I would also look into the private insurance guarantees at mega financials like Fidelity, Schwab etc use to insure customers Money Markets as these firms security accounts are insured for more than FDIC limits.

Not sure how they risk manage (insure) Money Markets but if Fidelity fails the USA and we all have bigger problems.

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03-09-2020 02:32 PM
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RE: The 2020 Stock Market Crash Thread
   

For professing themselves to be wise, they became fools. Rom 1:22
03-09-2020 03:03 PM
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MichaelWitcoff Online
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Post: #23
RE: The 2020 Stock Market Crash Thread
I didn’t say “wealth investors,” I said “wealthy investors.” Buffett, Munger, Town, the Gardners - all of them have the exact same opinion on what to do during a market downturn. I’m taking this opportunity to learn how to choose good companies to open positions with, since if 5 people with exponentially more success than me in a given realm all say the same thing, then I’m going to listen and try to follow in their footsteps. Same strategy I use with fitness, spiritual growth, and everything else in my life.

Jewish convert to Orthodox Christianity and best-selling author of "On The Masons And Their Lies."
(This post was last modified: 03-09-2020 04:10 PM by MichaelWitcoff.)
03-09-2020 04:07 PM
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Lampwick Offline
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Post: #24
RE: The 2020 Stock Market Crash Thread
(03-09-2020 02:32 PM)Deepdiver Wrote:  
(03-09-2020 02:12 PM)Roosh Wrote:  Are my FDIC-backed CDs safe?

Depends upon the bank or credit union that issued the CDs.

The FDIC S.O.P is to make a larger bank take over assets of the failed bank while the ggovernment absorbs the bad debts so unless BoA goes bankrupt your FDIC insured CDs should be ok... I would also look into the private insurance guarantees at mega financials like Fidelity, Schwab etc use to insure customers Money Markets as these firms security accounts are insured for more than FDIC limits.

Not sure how they risk manage (insure) Money Markets but if Fidelity fails the USA and we all have bigger problems.

Everyone should take a good look at what their cash is actually invested in. In your brokerage account, there is a setting on where to put your uninvested cash. At some brokerages, it can be set to basically the equivalent of a savings account that's backed by FDIC, in which case if the brokerage were to fail, it is supposed to be backed by a government insurance fund.

But if your cash is being swept into a money market fund, then it is actually being invested in various debt securities. These types of investments are not covered by FDIC but rather SIPC. This protection is not as good as FDIC according to my understanding, and it only theoretically covers failure of the brokerage itself, not investment losses.

Money market funds can be strictly government debt like treasuries, but often times they put corporate bonds in there to juice yield. Corporate bonds will implode relatively soon, in my opinion.

If one doesn't think investment losses can occur in something as "safe" as money market funds, just look to the last crisis where the oldest money market fund imploded due to having just 1.2% of its assets exposed to Lehman:

https://en.wikipedia.org/wiki/Reserve_Primary_Fund

I don't know to what extent FDIC is safe either to tell you the truth. The biggest question right now is what will actually act as a safe haven.
03-09-2020 06:09 PM
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Enoch Offline
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Post: #25
RE: The 2020 Stock Market Crash Thread
Trump should announce diversion of DOD funds to grow the us strategic oil reserve, 100% buy American. Our energy companies cant go under.
03-09-2020 06:37 PM
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