The Briefing Room
General Category => Economy/Business => Topic started by: libertybele on April 02, 2020, 07:52:26 pm
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He nailed the March coronavirus selloff — now he says there’s another 30% to go before the stock market hits bottom
Hedge-fund manager Dan Niles, in a note cited by Yahoo Finance this week, warned his clients way back in February that he was getting “increasingly worried†investors weren’t ready for the impact the spread of the coronavirus could have on the U.S. economy.
So Niles positioned his portfolio accordingly. Good thing. While the Dow Jones Industrial Average DJIA, 2.142% posted its worst first quarter ever, his Satori Fund closed in positive territory.
But, more importantly, where do stock markets go from? Definitely not higher, if Niles has it right.
“If you go back and look at history, there are nine times that the market has sold off about 30% or so since the 1920s, so it’s pretty normal,†he said this week. “You get one of these every 10 years or so and if you look at every one of them, you always get these bear market rallies.â€
Niles told Yahoo Finance that he sees another major drop from here, pointing to valuations that are still hovering well above historical norms, even after the painful pullback.
“Just to get to average, you would have to have the market go down 30%,†he said. “It is very easy to figure out the market probably goes down 30% before we’re even near fair valuation.â€.............
https://www.marketwatch.com/story/he-nailed-the-march-coronavirus-selloff-now-he-says-theres-another-30-to-go-before-the-stock-market-hits-bottom-2020-04-02?mod=home-page (https://www.marketwatch.com/story/he-nailed-the-march-coronavirus-selloff-now-he-says-theres-another-30-to-go-before-the-stock-market-hits-bottom-2020-04-02?mod=home-page)
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Past performance is not an indicator of future results. That is particularly true of bloviating market prognosticators.
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Past performance is not an indicator of future results. That is particularly true of bloviating market prognosticators.
Past performance is not a guarantee of future results, but the markets over decades have shown a definite pattern which many economists and financial "gurus" use.
Some say we are heading into a long nasty recession, while others say we should bounce back rather quickly. I say it's going to depend on how hard we are hit in the next coming weeks with this virus, how quickly people get their stimulus checks and unemployment. Past charts show economic recessions, wars, and natural disasters, but those charts don't show market reaction to a pandemic.
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Past performance is not a guarantee of future results, but the markets over decades have shown a definite pattern which many economists and financial "gurus" use.
Some say we are heading into a long nasty recession, while others say we should bounce back rather quickly. I say it's going to depend on how hard we are hit in the next coming weeks with this virus, how quickly people get their stimulus checks and unemployment. Past charts show economic recessions, wars, and natural disasters, but those charts don't show market reaction to a pandemic.
Everty time I see one of these articles, I chalk it up to the Broken Clock accuracy theory. NO ONE ever has or ever will be able to accurately predict the market to much better than 50-60%.