| | | That's dark, sense. I agree with a lot of your post, though. I think what we're seeing is the younger folks on Wall Street have never seen anything like this before. I'm a bit older (an older Gen X person), so I see patterns. Nothing new under the sun. The pin that pricked the bubble is different this time around, but bubbles were made to pop and if it weren't the coronavirus, it would have been something else.
This could very well be worse than the Great Financial Recession, and if the global economy comes to a standstill for a couple months, the trough could be worst than the Great Depression. But the sun will come up tomorrow and life will go one. The Brits have it right when they say, "Keep Calm and Carry On". I have my buy plan in place and will be buying in small increments throughout this entire crisis. I'm not a BTFDer, because I buy more slowly and when I buy, I hold very long term. You should know that when all this started I had been in short duration bonds and cash for the prior two years, since late Summer of 2017. Many people derided me, because I was early, but my bonds earned me 8-9% during that time, which was far more than I needed to live in on my retirement.
Then when I started seeing what was happening in China, I reached out to some tech friends of mine to discuss what they were seeing in terms of impact to supply chains. That's when I knew this was the Black Swan that would pop the bubble. I posted about that to Rarebird on my on "US Inflation and What to Do About It" thread and to a few other people, but I got the sense that no one believed me. I called it and I've been implementing my buy plan for stocks, which I wrote out to myself in a set of rules two years ago.
This too shall pass, my friend, but not before the pain is far more extreme and not before people who are buying, like me, will question whether they are doing the right thing. It won't be over until buying stocks hurts so much that most people stop buying anything. I suspect we'll see a minimum of 30-40% down from peak SPY (~$220) and quite possibly 50% down ($~169) before this rout is over.
It's going to get ugly, but the world will not end. It will just change hands. |
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