I’m gonna be honest here. Every bull out there should be nervous in this blind optimism. First of all the VIX is still very elevated. Second, we’ve been receiving nothing but bad news and stocks are still going up. Third, It looks like we might have another housing crisis on our hands and no one is taking it seriously. You can say priced in all you want, but the fact is people are not pricing it in. Just because big tech, Amazon, Costco and Walmart is doing well doesn’t mean that everything is good. Oil, airlines, hotels, small businesses, casinos, restaurants are all big parts of the economy and are failing as we speak.
Mortgages are being defaulted and we have a risk of another 2008 level crisis here and people are just breezing along like nothing is wrong. People are failing to realize that this is not just the coronavirus to worry about. This is only exposing pre-existing problems and on top of that we have a pandemic on our hands. This is a financial crisis and a pandemic at the same time! You think government would really be passing 2 trillion stimulus bills and the FED printing money in overtime and giving unlimited QE if there was no financial crisis? They are only saying that to not create panic! You think that at a time when everyone is panicking over the coronavirus they would say “oh by the way we might be having a repeat of 2008?”
While one can never predict the future, I have serious reservations about this ridiculous recovery we seem to be experiencing at a time when it is still unknown the full extent of how the coronavirus will impact us and understand how our economy is really doing. When we are receiving record breaking reports that are bad and the market goes up that is not a sign to buy in. 2009 was one thing when the market was down 50% from ATH at the time and had been in a bear market for quite a while. It’s another thing when we have been in a bear market for about two weeks and all of a sudden we are in a new bull market while data is getting far worse and we still haven’t really seen the economic consequences? That doesn’t seem right to me.
How can you price in the unknown and think that everything is just as good as its as pre-virus? That would be irresponsible and I urge you guys to think carefully before buying calls and thinking that we are having a v-shaped recovery.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.