US and global stocks have been in freefall since the beginning of 2020 due the coronavirus disease COVID-19.
How low will the main US stock indices DJIA, S&P 500 and Nasdaq Composite go?
I forecast DJIA, S&P 500 and Nasdaq Composite will fall 70% percent or even slightly more from their recent historic highs. The coronavirus crisis is a Great Depression type of crisis. Whole sectors of the economy could be 90% wiped out.
Major Asian and European indices will also fall by 70% or more, I prognose. We are in an extremely rare situation of both demand and supply destruction. The decades old globalism movement is about to reverse. Countries are hoarding essential goods, making themselves self-sufficient destroying global trade and the free movement of people, goods and capital which is what essentially globalism stands for.
The only way to make money investing in this market affected by the coronavirus disease COVID-19 is by trading. That is, short-term investing by buying dips and selling short-term rallies. This short-term trading strategy does not have the optionality built in in long-term investing, but trading is the only way for financial market participants who feed from financial markets to survive and prosper.
And yes, public and nonpublic companies can be valued in this environment. The principle for company valuations is still the same. One just has to forecast correctly the demand and ultimately revenue and net profits a company will be able to achieve down the road for its goods and services. Human psychology and ultimately company valuation have not changed much since the dawn of humanity and the inception of financial markets.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
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