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@redditinvestors Let me add my two bits about the market crash-
I think the coming market crash is more predictable than preceding ones because of the 2020-2021 COVID crisis. What do I mean here.
Normally, ups and downs in economy/market are determined by natural market forces. What happened in 2020-2021 was imposed top-down----think lockdowns etc. The economy was put on pause artificially---and then a tentative reopening timeline was set.
This is absolutely key because unlikely in most periods immediately after a crash---people in 2020-2021 have some rough idea as to when the economy is going to "recover." Whether the economy will actually fully recover is another question, but it's the expectation that matters.
Normally, it takes years for the market to recover because people don't know when the economy is going to recover. However, because of the expectations about reopening and because people wanted to profit off of that, EVERYONE jumped right back in after the crash. The smart money went in first, followed by the institutitionals, and then the retails. This is why the market recovered so quickly....it's the expectations about reopening sooner or later, not some weird unique factor that magically appeared in 2020. Indeed we started seeing real euphoria and FOMO starting in November 2020 with announcements about the vaccine and the meme stock phenomenon came a few months after.
Well, what does this mean when much of the U.S. generally reopens by early July? It means that almost every penny that could be invested to take advantage of the reopening is ALREADY priced in, thanks to this top-down imposed timeline on the economy. Can we imagine more money suddenly pouring in with the reopening? Doubtful. Maybe growth would keep up with investment----except the market is ridiculously overvalued. So that's doubtful too. That makes early July when we near "peak market" as of this time.
We all know the principle of "buy the rumor, sell the news." I would argue that this makes the period between July and end of this year the most likely time for crash. Early July is the reopening for most of the U.S. Most schools will reopen in September, and the COVID benefits expire at the end of October. Apparently people think that the market will track with the economy and boom with the reopening---despite the fact that the market did NOT reflect the economy at all throughout 2020 and 2021. A classic case of people believing what they want to believe.
And then there are some serious questions about the actual recovery of the economy, which will become clear by this fall. Normally, a recession clears away all the inefficiencies in the economy, but what happened with government intervention since March 2020 was that it actually created MORE inefficiencies and distortions in the economy.
So my bottomline....let's not forget the shoeshine boy story....If everyone is investing right now out of FOMO because people have some unquestioned assumptions about how reopening will lead to a market boom....It's time to be very scared. It's this particular top-down imposed timeline that makes this crash more predictable in my opinion.