There was some stock market-related stuff popping up in the MLB talk, and I figured it was worth its own thread. There are some smart guys here whose opinions I would certainly listen to.
I took some big broad-based ETF short positions at the close on April 6th, when the Dow posted a 1,600 point gain. I figured the rally off the lows was nothing more than an extended period of short covering given how far things had fallen and how quickly.
Boy, was I wrong.
To say I can't figure out why the market is behaving as it is is an understatement to say the least. It roars forward on any small piece of good news, and just shrugs off (or even rallies on) initial jobless claims numbers literally 10x worse than ever seen in history. Sure, a drop like we had off the February highs by definition prices in a ton of bad data going forward. No matter how much stimulus the Fed puts out there though, you just can't do as much damage to the consumer as is being done here and expect some kind of V-shaped recovery. This is going to take a decade to fully recover from IMO. We haven't yet seen all the 2nd, 3rd, and 4th order effects from these unemployment and business closure numbers that I fear are going to do the real damage. The most chilling of these to me is a near- total collapse of the commercial mortgage-backed securities market, which is now getting it from 3 sides: shuttered business tenants not paying rent, the 2nd order effects of residential homeowners missing payments, and the 3rd order effects from residential tenants missing rent. People say "well just forbear for 3 months and tack on the payments to the end of the mortgage." It's not that simple.
My intent was to hold the shorts for the remainder of that week of April 6th, but I'm being stubborn and still waiting for the next correction. You know it's fucked up when you turn short positions into a medium-long(ish) term investment strategy, but that's basically what I've done.
Very interested in hearing others' thoughts/opinions.
I understand that politics matter to market performance and are inevitably going to come up in a thread like this, but can we PLEASE try and refrain from the anti- and pro-Trump hysterics and keep it civil in this one? Thanks in advance.
I took some big broad-based ETF short positions at the close on April 6th, when the Dow posted a 1,600 point gain. I figured the rally off the lows was nothing more than an extended period of short covering given how far things had fallen and how quickly.
Boy, was I wrong.
To say I can't figure out why the market is behaving as it is is an understatement to say the least. It roars forward on any small piece of good news, and just shrugs off (or even rallies on) initial jobless claims numbers literally 10x worse than ever seen in history. Sure, a drop like we had off the February highs by definition prices in a ton of bad data going forward. No matter how much stimulus the Fed puts out there though, you just can't do as much damage to the consumer as is being done here and expect some kind of V-shaped recovery. This is going to take a decade to fully recover from IMO. We haven't yet seen all the 2nd, 3rd, and 4th order effects from these unemployment and business closure numbers that I fear are going to do the real damage. The most chilling of these to me is a near- total collapse of the commercial mortgage-backed securities market, which is now getting it from 3 sides: shuttered business tenants not paying rent, the 2nd order effects of residential homeowners missing payments, and the 3rd order effects from residential tenants missing rent. People say "well just forbear for 3 months and tack on the payments to the end of the mortgage." It's not that simple.
My intent was to hold the shorts for the remainder of that week of April 6th, but I'm being stubborn and still waiting for the next correction. You know it's fucked up when you turn short positions into a medium-long(ish) term investment strategy, but that's basically what I've done.
Very interested in hearing others' thoughts/opinions.
I understand that politics matter to market performance and are inevitably going to come up in a thread like this, but can we PLEASE try and refrain from the anti- and pro-Trump hysterics and keep it civil in this one? Thanks in advance.