Photo Credit: premasagar || What a cute kid.
The stock market is acting like a bunch of bored teenagers. At present, we have a number of “Adults in the Room” who are arguing that a crisis will come upon us soon from the effects of C19.
My view is that the more the market is exposed to a concept, the less it reacts to it. Yes, in the initial phase, that is not true — briefly, the more we hear about new concepts, the more impact they have.
But that dies out, and as some Millennials might say : NEXT!
I am surprised at the resilience of equity and corporate bond markets amid the panic surrounding C19. That said, this is similar to how I think the markets should behave. The markets should focus on long-term profitability, not on current period profits.
It is better to think how the expectations of wealthy people and their institutional servants are changing, than to think about the “news” that gets reported each day. The former affects prices; the latter is noise. Focus on the permanent. Ignore the temporary.
The 24/7 hype and hysteria over cv19 resembles the media playing the 9/11 footage of planes striking the WTC over and over and over and over… until advertisers had to tell them to cut it out.
Today, we have the same click baiters giving infection updates every ten minutes, and some morbid losers apparently have nothing better to do than parrot the updates to their dwindling group of friends — dwindling because sane people don’t want that level of negativity in their life. The hysteria is literally causing mental health problems.
Corrupt doctors tried to bill for cv19 charges when a young person is killed in a motorcycle accident. It’s called billing fraud. No, it’s not a gray area. Any competent doctor should be able to distinguish motor cycle accident injuries from a viral infection. Doctors lied because there is no deductible on covid, but there is on motor cycle injuries.
More people died of cancer in 2019 than died of covid this year (the neglect by the medical profession prevents us from knowing six month 2020 cancer stats).
More people in 2020 have developed depression, alcohol and drug addictions, or committed suicide. Way over the “normal” levels in all those categories. Health problems stemming from job loss poverty haven’t started to appear in statistics, but they are coming. The unnecessary lockdown has caused more health problems than it allegedly prevented.
Is it too early to blame democrats for sabotaging the economy in their get Trump obsession? Because that is coming too. Bet on it.
PS — the market is going up because inflation. The companies are worth the same, but the dollar used to measure them is worth less. Printing trillions of worthless currency has that effect. It doesn’t all go into rising healthcare costs or college tuition costs.
Surprisingly, dollar weighted returns (the ones investors experience) have gotten a lot better over the last decade…
https://www.morningstar.com/articles/998339/how-do-investor-returns-stack-up-against-total-returns
I’ve looked at Morningstar’s dollar weighted return calculations. They do it wrong. They limit the effect of dollar weighting by calendar year, when you are not supposed to constrain it. They do this to neutralize the long-term wrong decisions people make during greed and panic, which go across many years.