This is an insane market selloff. Good companies are getting decimated. Apple has lost $200 BILLION in market capitalization over nothing.
Still have $4.3 trillion of Federal spending this year. That is up over $100 billion from last year. Yes, the deficit has shrunk, but the flows are sufficient to sustain growth around 2.5% or, where we've been.
China is going to be fine in the long run. It's economy is still growing at 7.5%.
Insane selloff. Unbelievable bargains. I am buying. My only regret is that I wish I had more money to buy more.
Me too.
ReplyDeleteBut I draw the line at borrowing. The market can stay irrational...
Same folks selling here are same folks who bought this market. There's more here than meets the eye. There's never only one cockroach, you know. I'm sitting this one out until the dust settles.
ReplyDeleteMarket only irrational on way down? Don't think it's that simple.
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ReplyDeleteSorry but this time i think you are wrong.
ReplyDeleteI dont think China is going to be fine.
Have you read what Steve Keen and Michael Pettis have been writing about China?
Yes. There is a lot of misallocation. However debt can become equity, and equity is patient. Something I think the Keen analysis tends to mis because he doesn't have the 'Deus Ex Machina' of the state in his models.
ReplyDeleteStock market is a growth function. That's all you need to know. It's folly to sell, particularly when it gets crushed in panics like these. You can sell at euphoric highs and roll into other things that are depressed, but selling into panics is a 100% losing strategy.
ReplyDeletepretty substantial bond rally too... UST 10-yr yield back below 2%...
ReplyDeletersp,
Mike,
ReplyDeleteThe selling volume isn't coming from nonexistent retail folks, it's institutional blokes and their algorithmic bots. Not sure bots panic.
Not sure how the algos work, really, but I think they see orders coming down the "pipe" and jump in front. They're more a symptom than a cause.
ReplyDeleteThe dust is settling. AAPL filled the gap down already and is bring broad market back with it. I would't trade this market today to save my life. Today is a day to drink. Tomorrow we might scale back in and see if any cheap longer dated puts filter back in.
ReplyDelete"Today is a day to drink."
ReplyDeleteAs is every day!! (in moderation of course)
I'll drink to that!
ReplyDelete