zlb
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Post by zlb on Feb 1, 2020 14:32:58 GMT
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corto
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Post by corto on Feb 1, 2020 16:39:24 GMT
If the virus spreads it will have massive consequences on virtually everything. Wuhan is practically closed down, hardly anybody is on the streets. No goods flowing, no shops open, nobody working. Imagine that happens on a large scale.
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agent69
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Post by agent69 on Feb 1, 2020 18:53:42 GMT
Why do markets dip when there is a virus? Because they don't like uncertainty
I believe that prior to one of the Gulf wars the markets dipped, but started to increase the moment the fighting started.
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zlb
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Post by zlb on Feb 1, 2020 19:17:06 GMT
Thanks all - so the response is in case of worst case scenario, I'd also add uncertainty of what impact that scenario would have and on which markets.
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corto
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Post by corto on Feb 1, 2020 21:26:18 GMT
Thanks all - so the response is in case of worst case scenario, I'd also add uncertainty of what impact that scenario would have and on which markets. It's not only fear of something that could happen or a worst case scenario. It is already happening. China is isolated; in York students start wearing face masks.
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agent69
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Post by agent69 on Feb 2, 2020 9:27:38 GMT
Thanks all - so the response is in case of worst case scenario, I'd also add uncertainty of what impact that scenario would have and on which markets. It's not only fear of something that could happen or a worst case scenario. It is already happening. China is isolated; in York students start wearing face masks. News report said there are 1500 Chinese students at the University of York
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hazellend
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Post by hazellend on Feb 2, 2020 10:28:26 GMT
zlb You have to differentiate between noise and actual market movements. The vast majority of the short-term movements you see in the markets are pure noise, the result of the hedgies, the arbers, the algos and all the other short-termists playing around in the day-to-day volatility of the ocean that is the markets. Professional money mangers, those who run money for private individuals, pension funds and so on, they are only interested in the medium to long term. One trait of the professional money manager is that they run balanced portfolios and are not overweight in any company, sector or geographical region (unless their remit demands it, of course). The other key trait of the professional money manger is that they don’t engage in panic selling. So I guess what I am saying is that whilst professional money managers will be monitoring developments on the China story, the likely story as far as their porfolios go is that they are going to remain invested, if not actually continuing to actively invest new money. Specifically on the China front, there are two ways to look at it. From a top-down macro perspective, in the long-term bigger picture the whole saga is likely to be nothing but a tiny slip of the pen on a graph of Chinese GDP. From a bottom-up perspective, there is the clear question as to what happens with the drying up of cargo capacity as airlines stop flying to China. Modern supply chains typically operate on a JIT (Just In Time) basis and so there will be a small handful of industries with a China-centric supply chain that may see inventory disrupted. Food for thought, certainly. Panic in the financial markets, nope. Monitoring the situation and the continued suitability of specific portfolio constructions, potentially a little bit of portolio rebalancing in certain cases, certainly. Panic selling, nope. And yet professional money managers almost universally fail to beat their benchmark. Strange world where anybody can beat a pro.
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hazellend
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Post by hazellend on Feb 2, 2020 10:58:16 GMT
And yet professional money managers almost universally fail to beat their benchmark. Strange world where anybody can beat a pro. Afraid I'm not going to bite on your bait that is that nonsense trash. (a) There are many money managers out there who do beat benchmarks. There are an even greater number of so called DIY geniuses who fail miserably. (b) Even for the pros who don't quite beat the benchmark, there is more to professional money management than beating benchmarks. People like you will never understand (b), no matter how many people sit down and try to explain it to you. That is why you will forever remain with a typical DIY retail investor portfolio. Lousy portfolio construction and with no diligence on the subject of suitability or personal circumstances. Buying on greed and panic selling your way out. More churn than an ice cream factory. I am not wasting any more time on the subject. Lol
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zlb
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Post by zlb on Feb 2, 2020 17:53:05 GMT
If the virus spreads it will have massive consequences on virtually everything. Wuhan is practically closed down, hardly anybody is on the streets. No goods flowing, no shops open, nobody working. Imagine that happens on a large scale. but if that happens on a large enough scale there won't be anyone to work in the banks, IT security, or fscs to keep one's money safe from hackers in any financial context...perhaps then gold value goes up but where can one keep that safe? I'm interested in thinking about what markets might actually do well, or will remain stable in a slightly less dystopian position. Would drugs companies all be rushing to develop and capitalise on a vaccine for example, or are governments funding this? Anyway, (thanks @wallstreet) mostly I would be thinking about this to help me evaluate whether, or just observe that a professionally managed fund I use is managing money in a way that makes sense in the context. Such that it at least doesn't suffer a huge a loss, which is a bit more than 'noise'. Perhaps people will be walking and driving more to avoid public transport...
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zlb
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Post by zlb on Feb 2, 2020 20:33:02 GMT
but if that happens on a large enough scale there won't be anyone to work in the banks, IT security, or fscs to keep one's money safe from hackers in any financial context...perhaps then gold value goes up but where can one keep that safe? I'm interested in thinking about what markets might actually do well, or will remain stable in a slightly less dystopian position. Would drugs companies all be rushing to develop and capitalise on a vaccine for example, or are governments funding this? Anyway, (thanks @wallstreet ) mostly I would be thinking about this to help me evaluate whether, or just observe that a professionally managed fund I use is managing money in a way that makes sense in the context. Such that it at least doesn't suffer a huge a loss, which is a bit more than 'noise'. Perhaps people will be walking and driving more to avoid public transport... just beware that if you're trying to gleen insights off public filings by funds and the like, its likely to be a fruitless endeavour as depending on what you're looking at there could be significant lag, because there may well be a gap between trade execution and public filings. Also remember that collectives such as funds and the like are operating an agreed remit, as published in their prospectus. They are doing what they have stated they will be doing in their prospectus, which might differ to "a way that makes sense in the context" (to borrow your turn of phrase). Therefore if you have not read the prospectus documents of the collectives in your portfolio, now might be a jolly good time to do so. Your statement "I'm interested in thinking about what markets might actually do well, or will remain stable" is more along the right lines of what you should be doing. Look at the sectors and companies in your portfolios. Consider what is in your portfolio. If you consider you are overweight "at-risk" sectors and underweight "low-risk" sectors, then you should probably do something about rebalancing your portfolio accordingly. If you've got cash to spare beyond that, then sure, go buy some more "low-risk" sectors. I'm not going to spoon feed you the answers on what is and is not "high-risk"/"low-risk". If you are managing your own portfolio, then quite frankly that is the sort of DIY research you signed up for when you decided not to use the services of a professional. In any event, I would advise you that you should not be following the advice of random people on the internet !  Forget about gold. Only fools chase after the shiny stuff. Most people think its a clever thing to do, but frankly that's only because they don't understand the whole picture, its not as easy as "something bad is happening, buy gold". Thank you. not sure spoon feeding would help me as I might not understand the underlying reasoning anyway. Reassured by "whole picture" being a valuable trait.
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corto
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Post by corto on Feb 2, 2020 21:18:07 GMT
Gold is up 20% since June 2019 likely because people see it as a safe haven. It probably will increase more short-term.
China is down 15-25% over the last couple of weeks (eg CASE, HMEF, JMC) and may be considered cheap now. The epidemic will not last for ever, China's economy is still growing, and there is the additional option that the US-Chinese trade tension ease at some point not too far in the future.
Of course, one can also sit it out on a nest of trackers or even cash. What's going to happen is so uncertain that cash is an option short-term.
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corto
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Post by corto on Feb 5, 2020 8:43:07 GMT
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corto
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Post by corto on Feb 6, 2020 21:44:22 GMT
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