Stock Market Crash 2020 Predictions: Unraveling the Faulty Logic

Updated July 05, 2024

Stock Market Crash 2020 Predictions: Why They’re Built on Faulty Logic

Stock Market Crash Stories Make for Excellent Fables. Many of these experts should consider a career change and start penning works of fiction.

The story the media and all the experts were pumping during the sell-off phase (Nov-Dec 2018) was that the crowd had to worry about higher rates and an increasingly hawkish Fed. Voila, like magic, the narrative has changed; now they are talking about Powell put and how the Fed is turning dovish, which proves two points we have been stating for a long time.

Mass Media should be viewed and treated with the same respect as sewage.
The masses (including the experts) are always on the wrong side of the fence. For the record, these same penguins predicted that the markets would crash last year.

Stock Market Crash Predictions Are Based on Faulty Logic

We encourage our subscribers to adopt a mindset that avoids succumbing to fear. Fear-based decision-making can be detrimental in both life and investing. Stress, often associated with anxiety, is a subjective perception that can be altered by changing one’s perspective. By shifting our perception, we can transition from stress to serenity.

It is essential to recognize that investing is an art rather than a science. Enjoyment should be derived from investing rather than viewing it as daunting. While experts may argue that investing is difficult and takes a long time to master, it is crucial to maintain a positive and enjoyable approach to the art of investing.

As for the masses, some individuals are likely jumping on the bandwagon after witnessing a solid turnaround in the market. However, the less obvious answer requires further exploration. Readers will uncover additional insights and perspectives by continuing to read and gather information.

Pay close attention to the masses, for the data they willingly provide is worth its weight in Gold. Sadly, the masses volunteer to be used as “cannon fodder” repeatedly. Try to save them, and they are likely to crucify you to the nearest pole they can find. Watch or read Plato’s allegory of the cave to understand why the masses will never reward anyone who tries to open their eyes.

Common Themes During Stock Market Crashes

The world is ending, and everyone needs to flee for the hills. The wretched media then diligently create a cocktail on steroids and serve it to the herd; without fail, they fall for the same ploy over and over again.

“Investors can penalize themselves. While money market funds offer safety, they come at a cost as they accept a lower yield,” said Jerome Schneider, head of short-term portfolio management at PIMCO in Newport Beach, California.

https://www.youtube.com/watch?v=BgQ79evjylc

“I like cash now. You can earn a very reasonable return on cash,” said James Sarni, senior portfolio manager at Payden & Rygel in Los Angeles.

We stated that the Fed lied about inflation, and now the truth has emerged. Suddenly, Powell is changing his tune. Now he has pledged to be “patient” before raising rates; what gives? B.S. That is what the Fed’s only function is to foster boom and bust cycles.

“I worry those investors who have long-term horizons may be hurting themselves,” said Kristina Hooper, global market strategist at Invesco in New York.

As always, the masses will wait until the very end. Then they will jump in and shortly after that the markets will tank. For the masses, the only possible outcome is pain and loss. Investors sitting on the sidelines are already paying the price, quality stocks have made a strong comeback from their Dec lows, and the party has just begun.

PIMCO’s Schneider stated the following, and we could not agree more

“They tend to play it safe for too long,”

Our Response To These Stock Market Crash Predictions

This line of thinking is on par with rubbish; the markets have already priced this factor in, and the experts will now spin gossip into the news. They are still pushing the Tariff Wars issue, but it will end on the same note; there will be lots of huffing and puffing, but the dire wolf will not be able to blow the house down. What will knock this bull out? When the masses are ecstatic, until then, all the nonsense that is graciously labelled as “news” should be taken with a barrel of salt and a shot of whiskey.

Despite the sharp rally the markets have experienced, the masses surprisingly are far from bullish; the most significant number of individuals is in the neutral camp. In the current reading, the number of individuals in the neutral base stands at 37, and bears account for 32; this means that 69% of individuals are still either uncertain or bearish, which has to be viewed as a fantastic development.

Stock Market Predictions Outlook

Those anticipating a significant market correction might be disappointed because the monthly charts show that the Dow trades in a highly oversold range. This oversold condition has the potential to restrict further downside movement. It is essential to be cautious of individuals unfamiliar with Mass Psychology and use terms like “significant” or “sharp” when referring to a market correction, as their target levels tend to change frequently. Before the correction, they may be satisfied with a decline of 1500-2000 points in the Dow. However, once panic ensues among the masses, these individuals often revise their targets lower. Historical patterns indicate that they continue to lower their targets until the market unexpectedly reverses course, catching them off guard again. Investors should recognize that the crowd rarely succeeds in such situations, which is a valuable lesson in investing.

The favoured downside target would fall in the 25,400-25,550 ranges. As V readings are extremely high, there is always the potential for an overshoot as shown in the above chart. Unless the trend reverses (and there is no sign of this) all pullbacks should be embraced; the stronger the deviation from the norm the better the opportunity. Market Update April 23, 2019

Ideal SetUp Calls For Markets To Let Out Some Steam

We believe in the effectiveness of market timing, but it is essential to clarify that what most people consider market timing is, in our view, an exercise in futility. Attempting to pinpoint the exact top or bottom of the market is an unrealistic expectation. Emotions cannot be precisely timed using mathematical models or theoretical constructs, as they are not purely logical in nature.

The focus should be on identifying topping and bottoming action and not trying to determine the exact top or bottom. Only fools attempt to do what history has proved over and over again as being impossible. Extracted from the May 7, 2019, Market Update

Stock Market Crash 2020 Predictions

To provide some perspective, let’s consider the following: If a virus caused cancer, it would be regarded as one of the deadliest viruses in history. However, we seem to accept that 9.6 million people die each year from this devastating disease. Until comprehensive testing is conducted on a large scale and the data is thoroughly analyzed, including factors such as age groups and pre-existing conditions, the dire death projections put forth by experts can be seen as flawed science.

It may seem that the only option available is to succumb to panic and join the herd in fleeing. However, this is true only for those who follow the crowd. Such actions may provide short-term relief but can result in significant missed opportunities for long-term gains. Insiders within companies deeply understand their operations, and their unprecedented actions during this sell-off indicate that it should be viewed as an opportunity rather than a disaster. We are currently analyzing the latest sentiment data, and an update will be provided within 48 hours, if not sooner.

Recent Market Developments: December 2023 to August 2024

Despite ongoing economic uncertainties, the market has shown resilience, with several vital developments shaping investor sentiment and market trends.

In early 2024, we witnessed a surge in technology and renewable energy sectors, driven by advancements in artificial intelligence and global efforts to combat climate change. This trend underscores the importance of staying informed about emerging industries and their growth potential.

The Federal Reserve’s monetary policy decisions have continued to influence market behaviour. After a period of rate hikes to curb inflation, the Fed has adopted a more cautious stance, closely monitoring economic indicators before making further adjustments. This shift has contributed to increased market stability and investor confidence.

Global geopolitical events, including trade tensions and regional conflicts, have periodically impacted market volatility. However, diversified portfolios and focusing on long-term strategies have helped many investors successfully navigate these challenges.

As of August 17, 2024, market sentiment remains cautiously optimistic. The fact that the crowd is not overly bullish suggests there may still be opportunities for contrarian investors to capitalize on undervalued assets. Strong pullbacks in the Dow, ranging from 900 to 1500 points, have been viewed by some aggressive traders as potential entry points for long positions.

It’s important to note that while the markets are expected to peak in October, this doesn’t necessarily mean an immediate crash will follow. Markets typically go through a topping process, providing astute investors opportunities to adjust their strategies accordingly.

This recent period reminds us that market cycles continue to play out, albeit with new factors influencing their dynamics. Investors can navigate these complex market conditions effectively by staying informed, maintaining a disciplined approach, and being prepared to act on opportunities.

Conclusion: Navigating Market Corrections and Opportunities

As we stand in August 2024, it’s crucial to remember that market corrections are a natural part of the investment cycle. The current market sentiment, which is not overly bullish, suggests that we may be in what could be described as a “backbreaking correction.” These corrections, often mistaken for the end of a bull run, typically conclude with substantial reversals. It’s essential to distinguish between a correction and a crash, as the former is more common and often shorter-lived.

Recent events, including technological advancements and shifts in monetary policy, have shaped market behaviour. The resilience shown by specific sectors, such as technology and renewable energy, underscores the importance of staying informed about emerging trends.

Looking back at historical events like the crashes of 1987 and 2008 and even the COVID-19 crash of 2020, we’re reminded that these periods often present exceptional buying opportunities. While the volatility can be unsettling, it’s crucial to maintain a long-term perspective. The combination of near-zero interest rates, substantial liquidity injections, and economic stimulus packages can potentially drive markets to unprecedented heights once the current uncertainties subside.

For investors, the key takeaways are:

1. Don’t panic during corrections; they’re a normal part of market cycles.
2. Use these periods to reassess your portfolio and potentially identify undervalued assets.
3. Maintain a diversified portfolio to mitigate risks associated with market volatility.
4. Stay informed about global events and economic indicators that could impact market trends.
5. Consider adopting a contrarian approach when appropriate, as going against the crowd can sometimes lead to significant gains.

Remember, while short-term volatility can be challenging, history has shown that markets tend to recover and reach new highs over time. By staying disciplined, informed, and focused on long-term goals, investors can navigate these turbulent times and potentially capitalize on the opportunities they present.

History clearly demonstrates that the most opportune time to buy is during a market crash. The following real-time excerpt from a market update sent to our subscribers exemplifies our commitment to this principle.

It seems the markets are currently undergoing a “backbreaking correction,” which occurs at least once in every bull market and is often mistakenly perceived as the end of the bull run. In today’s manipulated markets, it is difficult to determine which correction will turn into a backbreaking one, as free-market forces have been significantly reduced. Although it may seem catastrophic, such corrections typically conclude with a substantial reversal.

Considering the current exaggerated response to the coronavirus, there is now a 70% probability that once the Dow reaches its bottom and changes direction, it could experience a surge of 2200 to 3600 points within ten days. Interim update March 9, 2020