If there comes a recession and perhaps stagflation that keeps rate of interest higher on slower economic growth, I would not be amazed to see the marketplace down another 40 to 50%.
0:00 Priced In
1:03 Incomes Expectations
4:53 Rate of interest
6:04 Economic downturn Not Priced
8:53 Investing Truth
9:15 SP 500 Appraisal
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I think what the market is pricing in is the probability of a recession, not the recession itself. so if the recession actually happens the probability increases to 100%, and then the price goes even lower.
Yes ..this
Ottimo video precauzionale druze Sven, anche El majstere de algebris ga’ dito: ” recessione sicura e non prezzata,fazendo i calcoleti come i tuoi , ga’ dito S&p 500 a 3400/3000.grazie per il servizio
Really enjoy your content, Sven! Please keep it up👏
I am ready for a 30-40% drop:). Nice video Sven.
I cannot imagine the market dropping another 50% from here; I would expect the FED to step in. But who knows what will happen; anything is possible.
The fed stepped in to pump it up. Then you better believe the fed can step in to shred the extra easy money.
But it always goes further than you think.
It’s better to distribute food stamps as a result of high inflation than to raise interests rates much higher so everything crashes. Regarding Europe they just can’t raise too much without creating more risk/pressure than “just” high inflation for low income parts of the population. In this case investments in stocks/real estate would be better according to Ray Dalio @Davos.
“Priced in” is one of the most idiotic concepts retail investors believe in.
There is no such thing for anything, the markets have never worked that way.
Its always worked that way. Markets are forward looking. Everyone is trying to predict the future.
@TheBooban I never said otherwise, what I mean is “priced in” suggest the recession is 100% in the price.
Which is a trap that retail investors fall in time and time again trying to time the bottom.
Tough decisions. Hold cash, which due to inflation loses 10% of value a year, and wait for a crash which might come tomorrow, next month, next year, or next decade. Or invest the money into stocks, which might go down 50% and stay down for years. Seems that a dollar cost averaging strategy, investing through thick and thin, is the preferred way.
Completely agree with you. As Ray Dalio said recently in Davos the only assets are productive ones with cashflow like stocks/companies/real estate to hold. Cash is trash and will burn even more with high inflation.
That would take us back to 2017 levels . I would just scoop high quality business on discount and wait for the rebound.
Thanks for this information Sven. It would take hours for someone like myself to collect all this information, analyze it and hope I am interpreting the information correctly. Much respect for your time.
So true. Sven is awesome
My pleasure!
Could inflation be a reason for the high earnings estimates? Cheers for the video!
yes, but it works also on the opposite on costs
@Value Investing with Sven Carlin, Ph.D. sure, that’s valid. I’ll just wait and see 🙂
There will be slowdown in earnings, hyperinflation is causing that. But let’s see if the Fed will blink and backs down from jawboning the stock market, or they will continue until inflation abates… Powell is not Paul Volcker, let’s see
glad to hear it. 😂 but i dont see recession risk (based on data, not emotive fear or website news!). but its true we must be ready in case.
Great video Sven! Very important one. We can say shortly: “It’s only when the tide goes out that you learn who has been swimming naked!”
Thanks for the video! It was thought-provoking. Seems like everyone is waiting for a recession. So if everyone anticipates it, will it happen…? I don’t see the action considering all the woes in the world. But maybe it’s still coming?! I don’t know. And similarly it’s dishonest to say X or Y is priced in, as in truth nobody knows… It’s just a graph, It doesn’t have labels what’s priced in! 🙂
you never know:-)
I think that is weird too, this must be the most advertised recession and crash ever. And that never happens.
I bought some Intel stocks today, will stick to companies I understand and believe will survive a potential crash (outside of my usual index funds)
thanks for sharing!
Common question for viewers.
Would you change your strategy or thinking even if you know tomorrow there will be recession?
Hi Sven, could you maybe make a video of your personal view for foreign investors that hold chinese stocks? in the west we have inflation/rates going up and slowing growth and in china they have low inflation and talks of easing policies (fiscal and monetary, like the good old classic recessions), it feels like buying chinese stocks now is like buying US stocks after the great 2008 recession and could be a way to overcome the uncertainty of western stagflation possibly like in the 1970′ , I mean why have a headache in western markets when you can just simply go to chinese market with tailwinds and a lot less uncertainty, maybe thats why Munger likes china.
Your thoughts on this matter would be very appreciated.
*Even with the economic fluctuation, I’m so excited I’ve been earning $45,000 from my $10,000 investment everyday 10days.*