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Comment by ogre_codes | Hacker News Reader

Apple is doing... OK. They are still down 13% from their highs.

Boeing is trashed and announced layoffs.

GM is as well and are suspending their dividend, Ford isn't exactly happy either, and plenty of other S&P giants.

Disney has taken a huge hit due to sports/ ESPN revenue, theme parks, and cruise lines.

Small businesses aren't on the S&P 500, but unemployed people and small businesses all buy from companies in the S&P 500.

Apple also happens to have a massive cash pillow to soften their fall. Nobody else has reserves like Apple and a lot of companies have substantial debt.

The stock market hasn't quite priced in damage yet.

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> The stock market hasn't quite priced in damage yet.

Quite the claim. Anyone with confidence in this theory should take a short position now and pick up their million bucks after the market “prices in the damage.”

That's assuming you can time it right. I've been holding puts for ~2 months, and I went from very right to very wrong very quickly. I also fully anticipate to be very right again as soon as the fed stops pumping trillions of dollars into companies that were ill prepared for risk.

This is totally the hard part to know: how much will Trump prop up the stock market?

I recently heard the expression "the stock market is just a graph of rich people's emotions" and find it to be the most pithy truth of economics that I've encountered. A lot goes go into those emotions that we can not anticipate.

But timing is the whole thing. There is nothing else to be right or wrong about.

I mean, sure I can predict that the market go down and sure, sometime between now and the heat death of the universe the market will go down. Same about the market going up. But these kind of predictions are meaningless.

And why will the Fed stop spending my great-grandchildren’s money to prop up the stock market? I don’t see a reason.

> I also fully anticipate to be very right again as soon as the fed stops pumping trillions of dollars into companies that were ill prepared for risk.

Be careful...

I was mostly being sarcastic, but I think it's relevant to direct you to this article (found in top 50 on HN). https://thesoundingline.com/fed-slows-qe-unlimited-to-just-8....

I'm hesitant to say that they're going to stop buying, but there is at least evidence of slowing.

I just said be careful, they can pump and release at will. You can't predict when they will do it, it's better to wait for them to announce it and THEN take action.

Making a killing on a market downturn is hard. Particularly when the majority of your investments are in an IRA which has pretty strict limits on shorting and trading options. Trust me, I tried in early March.

The big problem is unless your timing is perfect, you have to be able to suck up huge losses until things fall apart. To make your million bucks, you might have $100,000 in puts which you watch turn into $10,000 over 6 months only to have the market correct after you cover your position.

Bill Ackman did set up a hedge and pocketed a couple billion betting the market was wrong about the risk the virus presented.

https://www.forbes.com/sites/antoinegara/2020/03/25/billiona...

I’m not Bill Ackman. I doubt you are either. If you’re lucky, you spot these trends enough where you avoid getting soaked on downturns. I’ve been pretty good at that last bit.

Unfortunately, unlike simply buying stock a short position exposes the trader to unlimited downside.

You can be completely right about what's going to happen but a miss in timing could ruin you.

Apple, Boeing, GM, and Disney are ranked 2, 69, 169, and 20, respectively in an index of 500.

My only point here is this is an arbitrarily picked set of companies and it should be put into context with surrounding S&P500 data and analytics.

Boeing, GM, and Disney are more representative of the other 95+% of the S&P 500. There are 495 companies outside of the "FAANG" stocks and most of them are hurting and small businesses and a lot of individuals are doing even worse. You talk about putting things into context even as you are using a laser focus to highlight one the few companies that is doing well.

That’s for next episode in June/July for Q2.

> That’s for next episode in June/July for Q2.

The stock market is supposed to be a forward looking machine.

Supposed to be

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