03-31-2020, 01:20 PM
(03-31-2020, 01:10 PM)fenders53 Wrote: Because the earnings misses will be epic and a lot of companies are taking on enormous debt level that may harm them. Those are the most important reasons to me. History also says bear markets last longer than a couple weeks.
This. A few weeks feel like a long time when you watch the market swing back and forth day to day. Our brains are poorly wired to think on timescales more than an arm's length from our current reality.
Weeks are tiny data points in the overall scheme of a bear market. Sure, maybe this one is different from all the rest, and we pop back to all-time highs by June with a V-shaped recovery. It is a possibility. I don't think it is likely. When a phase transition from bull to bear happens (what has been going on the past several weeks), markets are choppy down and up, because price discovery takes time when shifting from one paradigm (all the earnings forecasts that just got thrown out the window) to another (the new earnings forecasts yet to come). Valuation is hard precisely because of uncertainty, but there is no doubting the overall trend of uncertainty.
These scenarios typically take more than a year to play out fully. We just experienced the first hill after the initial drop on the rollercoaster. Lots more uncertainty left to drive things up and down for a while.