Fixed to Ruin
Come wit it now!
Or, more pointedly,
I'm not saying we're going down almost 90% off the high - I think 60% is well within the cards - but I am saying that buying massively back into the market when it's ~33% off the 3rd bubble-induced high in 20 years merely because "look at the long-term, stocks haven't been this cheap in years" is a great way to end up going nowhere for years to come.
Finally, every time I hear "the market has priced in everything, the worst is behind us" I'm reminded of the same comments from 2007-2008 and through most of the run-up the last few years. Bad news is seemingly always already factored into the market. Good news is never factored in, and it leads to "bad news? Buy! Wait, it's really good news? Really buy!" mentality that causes the market to rocket up to obscene valuations and people to exclaim this time is different, recessions are a thing of the past, you have to be in stocks, they'll never go down again!
To take the most recent example of this...
Bitcoin was at almost 20,000$ at the end of 2017. When it finally rolled over it crashed into 8,000$ to 10,000$ range in roughly 90 days. Bitcoin had a ~50% decline in early February of 2018. People piled in thinking they were getting the bargain of a lifetime and the price got pushed up ~30% to 12,000$ by the end of February of 2018. Then the next phase of the bust happened and the price fell continuously to the 3000$ range by December of 2018 (1 year later). The crash from the all time highs of ~19,300$ to the new lows of ~3100$ was a 84% decline. If you bought at the 8000$ mark in early February of 2018 thinking you were getting a steal of a deal because "Bitcoin was on sale" you watched your investment decline by another 60% by the end of the year. As of today (End of march 2020) bitcoin is trading at 6500$ still not at the first low of 8000$ from 2018. Therefore, you still haven't recouped your original investment. On top of that inflation eroded your purchasing power of the dollars you invested back in 2018. This isn't a knock on crytpos but more of an observation of market psychology. We are seeing the same play out in the stock markets now.
In my view what we are seeing now is the first bottom and we'll probably see a decent run up from here. However, the virus is creating untold damage to the economy. The whole world is staying at home and saving money like crazy because many aren't earning an income right now and are struggling to keep the lights on and food on the table. Publicly traded companies will soon cut their guidance and dividends as their sales and revenue collapse. Soon we will find out what companies are strong financially will be able to survive the downturn and what companies will fall into bankruptcy (e.g. Enron in 2001, Bear Stearns in 2008, or Bernie Madoff).
Buy metals, if you can still find them.
