The 2020 Stock Market Crash Thread

SlickyBoy

Ostrich
Tail Gunner said:
So, regarding determining a market bottom, this letter from a major hedge fund manager states that "in 15 bear markets since 1950, only one did not see the initial major low retested within three months . . . In all other cases, the bottom has been tested once or twice." [BTW: I highly recommend reading the entire letter, written by Howard Marks.]

https://www.oaktreecapital.com/docs/default-source/memos/calibrating.pdf?sfvrsn=6
Thanks for posting. And I agree with what he said today - "The world is more than 15% screwed up."
 
Gentlemen:

On 1 June 2020 will the S&P 500 be over/under 2475? That would be a little more than 11% downward move from this level.

I'll start: under.
 

Tail Gunner

Hummingbird
Gold Member
Blade Runner said:
Gentlemen:

On 1 June 2020 will the S&P 500 be over/under 2475? That would be a little more than 11% downward move from this level.

I'll start: under.
Wuhan Virus. Cataclysmic economic conditions. The long history of "sell in May and go away." Gotta go with under.

Wild cards that might push "over": (1) Europe implodes, forcing European investors into U.S. equities or (2) Fed/Treasury buys U.S. equities.

Companies bailed out by European Union governments taking stakes as a result of the coronavirus crisis will be barred from paying dividends or share buybacks under proposed rules, sources said.
https://www.reuters.com/article/hea...uts-by-bailed-out-firms-sources-idUSL5N2C25EY
 

Arado

Pelican
Gold Member
Arado said:
Kangaroo said:
SamuelBRoberts said:
Blade Runner said:
Did anyone see Raoul Pal's "unfolding" thesis, recently put out on realvision?
Nope.
I think its for members only, but i found this:

Video was removed - anyone was able to see it and has the main takeaways of Raoul Pal's thesis?

I believe his portfolio is 25% dollars, 25% gold, 25% bitcoin, and 25% for short term trades, and he nailed the bond trade for the rally during the lead up to coronavirus crash.

He says this is going to be the largest insolvency event in human history. I still can't get a straight answer from the interviews of him that I've seen on what the Fed's reaction curve is - will they keep bailing out companies and debtors even past the point of sacrificing the currency, or will there be cheap assets for sale in dollar terms from this?

That is the crux of the issue: Hide in gold and take out fixed rate long term debt (to buy farmland and/or cash flowing non-luxury real estate), or cash is king and wait to pounce for deals of a lifetime?
Raoul Pal's Unfolding Macro Thesis Paper is now available free (unsure for how long) at the link below. Haven't had time to fully read it so no pull quotes but definitely worth your time since he called the virus and the bond trade. Interested to hear thoughts from others.

https://drive.google.com/file/d/1nW...DKM9laMPiBloAo3eajjGTROg3g34tw&_hsmi=86574321
 
Another 4+ million people lost their jobs last week. Best bull market ever! I'm still waiting any day now to wake up and see an investment bank fail like what happened with Lehman Brothers. Surely with all the risk these banks take on with all their leveraged exotic gambles, one of them has to go belly up soon, especially anyone heavily exposed to oil bets.
 

Tail Gunner

Hummingbird
Gold Member
John Michael Kane said:
Another 4+ million people lost their jobs last week. Best bull market ever! I'm still waiting any day now to wake up and see an investment bank fail like what happened with Lehman Brothers. Surely with all the risk these banks take on with all their leveraged exotic gambles, one of them has to go belly up soon, especially anyone heavily exposed to oil bets.
Capital One received a waiver almost a month ago when oil prices were far higher than today. I can only imagine what its exposure is today.

https://www.nasdaq.com/articles/exc...fter-oil-price-plunge-increased-swap-exposure

https://www.zerohedge.com/markets/cftc-quietly-bails-out-capital-one
 

Leonard D Neubache

Owl
Gold Member
Bull markets while unemployment numbers skyrocket seems to be an indication that I was correct in my explanation about the virus being a cover for a controlled GFC in which main street is assassinated and the corporate oligarchy backed by the fed have their losses papered over again in conjunction with them sweeping in to claim the territory evacuated by the death of Main Street.

Are stocks rising because the Zio-corporate world order has reached critical mass? Seems like it to me.
 

RexImperator

Crow
Gold Member
I'm still waiting any day now to wake up and see an investment bank fail like what happened with Lehman Brothers.
The current rescue dwarfs TARP. The Fed is even buying junk bond ETFs to save these guys. Obviously they know that any one firm’s failure might trigger a total debt implosion.
 

mbare

Woodpecker
Gold Member
Tail Gunner said:
John Michael Kane said:
Another 4+ million people lost their jobs last week. Best bull market ever! I'm still waiting any day now to wake up and see an investment bank fail like what happened with Lehman Brothers. Surely with all the risk these banks take on with all their leveraged exotic gambles, one of them has to go belly up soon, especially anyone heavily exposed to oil bets.
Capital One received a waiver almost a month ago when oil prices were far higher than today. I can only imagine what its exposure is today.

https://www.nasdaq.com/articles/exc...fter-oil-price-plunge-increased-swap-exposure

https://www.zerohedge.com/markets/cftc-quietly-bails-out-capital-one
What are your thoughts on buying straight up oil stock right now for a longer term investment? I'm just learning and getting into stock -- have an etrade account, etc. If it's not the worst idea, what stock do you (or anyone on here) recommend?
 

Tail Gunner

Hummingbird
Gold Member
mbare said:
Tail Gunner said:
John Michael Kane said:
Another 4+ million people lost their jobs last week. Best bull market ever! I'm still waiting any day now to wake up and see an investment bank fail like what happened with Lehman Brothers. Surely with all the risk these banks take on with all their leveraged exotic gambles, one of them has to go belly up soon, especially anyone heavily exposed to oil bets.
Capital One received a waiver almost a month ago when oil prices were far higher than today. I can only imagine what its exposure is today.

https://www.nasdaq.com/articles/exc...fter-oil-price-plunge-increased-swap-exposure

https://www.zerohedge.com/markets/cftc-quietly-bails-out-capital-one
What are your thoughts on buying straight up oil stock right now for a longer term investment? I'm just learning and getting into stock -- have an etrade account, etc. If it's not the worst idea, what stock do you (or anyone on here) recommend?
As I stated in a prior post, if you are not psychologically prepared to hold a stock or ETF in a beaten down sector (such as oil) for 3-5 years, then you probably should not invest in it. Oil could rally in a year, at least modestly -- or could slowly go sideways-up for a long while yet.

If you are new to investing, buying an oil services ETF such as OIH or investing in one of the big oil companies such as Exxon Mobil (XOM), Phillips 66 (PSX), or Royal Dutch Shell (RDS.B) might be prudent. They are companies with robust balance sheets that can withstand almost any crisis. Stay away from the USO ETF. It may not exist shortly -- or it may get reorganized. Stay away from ETFs based on futures contracts. Stay away from leveraged ETFs.
 

Foolsgo1d

Peacock
Leonard D Neubache said:
Bull markets while unemployment numbers skyrocket seems to be an indication that I was correct in my explanation about the virus being a cover for a controlled GFC in which main street is assassinated and the corporate oligarchy backed by the fed have their losses papered over again in conjunction with them sweeping in to claim the territory evacuated by the death of Main Street.

Are stocks rising because the Zio-corporate world order has reached critical mass? Seems like it to me.
We are seeing untold sums involved here which are orders of magnitude greater than 2008. This isn't papering over some risky loans but building a whole new pyramid.

Whether its a suckers rally time will tell but the market manipulators only know.
 

NoMoreTO

Pelican
Gold stocks have seen a pretty massive rally. Bank of America came out and predicted $3,000/oz Gold in 18 months. I am watching Peter Schiff talk about $5,000 gold and considering the monetary expansion, and what happened to oil it does seem impossible.

Question: If stocks take a big hit, will Gold stocks hold up or tumble like the initial crash in March? Thoughts on a gold miners ETF - I'm looking at a Canadian ETF - ZDG ?
 

eradicator

Peacock
Gold Member
It’s impossible to know an answer to that ahead of time. Arguably gold is already over valued . Of course we could fire up the money printer and increase the money supply by 5t. Or 10t.
 

NoMoreTO

Pelican
Aside from the fed printing he has an interesting hypothesis that relates to what just happened with oil, except in the reverse.

In oil, nobody wanted to accept physical delivery, and the prices saw an erratic swing down as the contracts came up, as no one actually needed the oil.

In gold, the reverse could happen. Investors start accepting physical delivery of contracts such as effectively driving up the price as demand for physical delivery increases. It was an interesting thought.
 

Tail Gunner

Hummingbird
Gold Member
NoMoreTO said:
Gold stocks have seen a pretty massive rally. Bank of America came out and predicted $3,000/oz Gold in 18 months. I am watching Peter Schiff talk about $5,000 gold and considering the monetary expansion, and what happened to oil it does seem impossible.

Question: If stocks take a big hit, will Gold stocks hold up or tumble like the initial crash in March? Thoughts on a gold miners ETF - I'm looking at a Canadian ETF - ZDG ?
If there is a second crash, then more deleveraging must occur. Leveraged investors will need to unload anything that produced a profit, including gold. Will gold drop to its prior low? I would say possibly, but probably unlikely. There is probably a much greater chance of silver doing so. Mining stocks will definitely take a hit, along with most other equities. Mining stocks do not typically hold up during crashes; they do well during inflation.
 

Tail Gunner

Hummingbird
Gold Member
NoMoreTO said:
In gold, the reverse could happen. Investors start accepting physical delivery of contracts such as effectively driving up the price as demand for physical delivery increases. It was an interesting thought.
The unit size of gold futures consists of 100 troy ounce bars. Not many retail investors can take physical delivery of such bars.
 
The question nobody’s answering: who’s going to buy gold for $3,000 an ounce, or silver for $100? The price doesn’t matter if nobody will pay it, and the dealers who sold gold for $1,500 an ounce aren’t dumb enough to buy it back for 3k.
 

SlickyBoy

Ostrich
Tail Gunner said:
NoMoreTO said:
In gold, the reverse could happen. Investors start accepting physical delivery of contracts such as effectively driving up the price as demand for physical delivery increases. It was an interesting thought.
The unit size of gold futures consists of 100 troy ounce bars. Not many retail investors can take physical delivery of such bars.
True, but it's a different beast. with respect to the storage itself, it is far easier to store large quantities of those bars than it is several tankers full of crude. The oil situation of limited places to put it will never apply to physical gold.
 
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