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Originally Posted by Manhattanboy
Best buying opportunity in years gone so it seems. Can’t believe how quickly and significantly the US indexes have rebounded.
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An equal weighted holding of Meta, Amazon, Microsoft, Apple and Google would be down 42% year to date. I guess if you consider that fully recovered, you’ve missed your chance there!
Quote:
Originally Posted by opendoor
And ~10% run ups are quite common in down markets. This is the 3rd one this year after the 11% increase in March and the 17% increase in June -> August. But each succeeding peak has been lower than the previous one, and if that were to continue we'd see another drop relatively soon.
While at some point it'll start a more consistent trajectory upwards, I don't think there's much reason to think we've seen the bottom (though I guess it's possible). Right now, it's the 20th biggest drop from peak to trough among the 22 bear markets in the last 100 years. And the S&P has always bottomed out within or just after a recession. So if one is going to happen in the next year or so, that would suggest that there's room to drop still.
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That’s IF there’s a recession though. People keep saying we’re there already (GDP was positive in both Canada and the US and likely not negative on a quarterly basis). A recession that’s yet to come would be the most widely predicted recession ever, and that’s questionable because they’re generally unexpected. There’s also a lot of evidence that companies are hoarding staff. They’ve had a difficult time hiring and aren’t keen on cutting to repeat the process as things improve. Instead, they seem to be signaling that they’re prepared to ride it out for the most part. That’s an issue for the “recession is still coming camp”.
And as far as the idea that the economy was over-heated and companies were way over leveraged, it doesn’t seem to be the case either. It seems like the one reason we could sink negative is the fed raising rates too fast, and of course that’s also questionable. Maybe they push us to recession, or maybe things slow and don’t go negative. It’s not a binary outcome.
And lastly (sorry for the length of this), Canada is in a pretty different scenario. Our energy/materials sector is keeping things positive in terms of GDP, and we could well avoid recession nationally, but certainly provincially.