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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (63673)	4/7/2020 9:46:29 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 78958

Hi B, Re: Burry article............... Thank you for sharing that article. That's a very different take on the current situation and one I can understand far better than the Keynsian measures currently being practiced. OAG Tom

To: bruwin who wrote (63673)	4/7/2020 12:42:00 PM
From: OldAIMGuy	Respond to of 78958

Veteran Wall Street Market Commentator, Art Cashin: “It’s a topsy-turvy few weeks. It’s hard to recognize. When you think about it, this is the first planned recession. This happened by government fiat, not because business went south. So millions of people are now out of work, as we see with the jobless claims. The market has had great difficulty adjusting to it, because the market is used to historical recessions. This wasn’t caused by inflation, or asset bubbles, or bad investments, or anything else that has led to recessions in the past.” --------------------------------------------------------------------------------------------- Reed Stevenson, Bloomberg.com, April 6, 2020 on Michael Burry's Tweets: “Government-directed shutdowns in the U.S., which led to millions of job losses and may trigger one of the country’s deepest-ever economic contractions, aren’t necessary to contain the epidemic and have disproportionately hurt low-income families and minorities, Burry argued in a series of tweets over the past two weeks. He also said some controversial treatments for Covid-19, such as the malaria drug hydroxycloroquine, should be made more widely available.” michaeljburry@michaeljburry (TWEET) "If COVID-19 testing were universal, the fatality rate would be less than 0.2%. This is no justification for sweeping government policies, lacking any and all nuance, that destroy the lives, jobs, and businesses of the other 99.8%. “This is a new form of coronavirus that emanated from a country, China, that unfortunately covered it up. That was the original sin. It transmits very easily, and within the first month it was likely all over the world. Very poor testing infrastructure created an information vacuum as cases ramped, ventilator shortages were projected. Politicians panicked and media filled the space with their own ignorance and greed. It was a toxic mix that led to the shutdown of the U.S., and hence much of the world economy. In hindsight, each country should have immediately ramped up rapid field testing of at-risk groups. But as I understand it, the CDC was tasked with some of this, and botched it, and other departments were no better. The bureaucracy failed in a good number of countries. Turf wars and incompetence have ruled the day. So the political cover for that failure on the part of the technocrats and politicians is a very harsh stay-at-home policy.” ------------------------------------------------------------------------------------------------------------------------------------------ Here's my Relative Valuation Index. It looks at stock values in relation to "risk free rate of return." (Median = 20; Bullish = 18 and below; Bearish = 22 and above) Here’s a look at a similar time frame from the Crash of October 19, 1987: Notice the downward slope is quite similar and the damage to the S&P500 also as dramatic. In 1987 the markets started at a higher risk level before the Crash. The current Relative Valuation bullishness is stronger than in 1987. To me this means that Downside Risk is now far less than Upside Potential. Markets took two months to bottom after the "Crash." Here’s my current Speculation Index and Overall Market Risk evaluations: (Median = 9; Bullish = Zero and below; Bearish = 20 and above) The depth and severity of the decline in speculative activity shows how indiscriminate selling of all investments, stocks and corporate bonds, drove the S&P 500 down. The Market Risk Indicator (MRI) combines four different views of market activity to come up with an overall view of current risk conditions in the U.S. (and to a lesser degree, the world equity markets). Currently three of the four components are in bullish agreement about market conditions. The fourth is neutral (IPO Activity Index). Overall, market risk is now at the lowest level since the early part of 2009 as the markets bottomed. My database goes back to January of 1982. OAG Tom