Updated July 2020
What happens if the Stock Market Crashes? Opportunity!!!!
When The masses panic and the smart money buys. Sol Palha
If you look at history going all the way back to the Tulip bubble one theme rings out loudly; the experts always claim to know exactly when the market is going to crash. Interestingly these same jackasses had no idea as to when the market would take off, but suddenly they have become experts regarding when the stock market should and must crash. Hidden in this rhetoric is a hidden theme that the masses in most cases fail to spot otherwise, these snake oil salesman would have been out of business long ago; these chaps were wrong so many times that had you listened to them you would have bankrupted yourself several times over.
On Stock Market Crashes: Even a Broken Clock Get’s it Right Eventually
Note that even a broken clock is correct twice a day, depending on whether you follow standard or military time. Hence even if they eventually get it right, you would have been blown out of the water a long time ago
What to do if the Stock Market Crashes?
It would make more sense to have a frank conversation about investing and Stock market crashes, then hit the panic button. Fear and misery love company, so this is the favourite question of those individuals who love to live in a world where negativity is the order of the day. If you live in the “if world”, you will miss all that is taking place around you and that includes opportunity.
You will be so busy looking for any reason to justify that things won’t work out that even if opportunity slapped you in the face, you would notice it. In short, one should never panic when it comes to investing. If you use common sense and take a few prudent measures, you won’t have to deal with such a scenario. We always believe that stock market crashes are nothing but opportunities in disguise and covered this topic in the following article
If experts could predict the exact time markets would crash, they would not be telling you; they would be busy playing the markets and making a fortune. Because they can’t predict anything other than the fact that you will buy their crap, they come on TV and spout out the same crap over and over again, hoping by some miracle they will be right once, so that they can use that one event to advertise their heightened powers of prediction. This excerpt from an article we penned clearly reveals our take on experts
We have one expert after another predicting that it is time for the markets to crash; mind you these same chaps sang this same terrible song of Gloom in 2015, 2016 and now they are singing it with the same passion in 2017. There is one noteworthy factor, though; a few former Bulls have joined the pack. Does this now mean that the markets are going to crash? Apparently not, well, at least if you look at the indices, as of Jan the market continues to trend higher. Furthermore, what is a crash or for that matter a pullback or a correction?
So What Happens If The Stock Market Crashes? Smile & Buy
One individual could view it as a crash, while the other views it as a mild correction and an opportunity to purchase more shares. It would all depend on when you jumped into this market. If you embraced this bull market in 2016, then a pullback in the 10%-15% ranges would feel like a crash. On the other hand, if you embraced this beast (Stock Market Bull) anywhere from 2009-2011, it would seem like a mild orderly correction.
Most experts almost gleefully try to force their twisted perceptions on everyone. Just because the experts decide to label it as a crash does not mean you should follow their lead; experts are known for getting it wrong all the time. In fact, experiments have shown that monkeys throwing darts at a random list of stocks fare much better than Wall Street experts. Hence, take their so-called sage advice with a barrel of salt. Stock Market Crash 2017-reality or all Hype
What To Do After The Stock Market Crashes
The first thing is to get out of the what happens if the stock crashes mode and into the I wish the stock market will crash mode. Why the stock market crashes equate to opportunity short and simple.
If the Stock Market crashed and dropped by over 20% or even as much as 30%. Jump and down with Joy for when there is blood in the streets it’s time to buy. The prudent investor backs the truck up and purchases all the quality companies the masses are dumping. Stock market crashes are nothing but hidden opportunities waiting to be discovered; the smart money hopes the masses will never figure this out.
Change the Angle of observance
A Market crash can be viewed as a monumental tragedy or a splendid opportunity depending on what side of the fence you sit on. If you decided to pour all your money into the market close to the top, then it would be viewed as a tragic event. If on the other hand, you got in early and as the market trended higher, you banked some of your profits then it would be viewed as a grand opportunity. Crisis investing dictates that all disasters are nothing but opportunities change the lens and the picture changes. Why market crashes are buying opportunities
Fear Mongers Thrive on Fear
But Astute Investors buy when the Masses Panic. Always remember that fear mongers are paid handsomely to stampede the masses; that is when the smart money makes the biggest killing. For them to make a killing they have to fleece thousands upon thousands of small players. In some cases they go for the juggler and fleece millions; two examples come to mind; the dot.com bubble and the housing bubble. Buffett has gone on record to state that it’s a virtual guarantee that stocks will rise in the years to come.
Stock market crashes equate to opportunity July 2020
So, whatever the rubbish they pump out in the news, this pullback will resolve itself sooner than later because the Fed and its allies will either come out with new policies to push more money into the markets or directly invest into the markets. As the money supply is going to keep increasing for the foreseeable future, we are reaching the point where it makes no point to focus on stock market crashes. For in reality, it is only a stock market crash if you bought in right at the top, but if you playing the market from the prior crash, it should not be viewed as a crash but as the next buying opportunity. Market Update, May 31, 2020
This ploy of using every disaster to push more money into the system is going to be employed by central bankers worldwide. While central bankers from other nations might complain that the US is distorting things by increasing the money supply, they are doing the same thing. Look around, nation after nation is announcing some sort of stimulus program. Hot money will continue flooding the system and indirectly find its way into the markets.
Bearish sentiment is rising again, which indicates that this short-term correction might be over before it even manages to gain traction. While the gauge on the anxiety index has pulled back a bit, it is still trading in the madness zone, indicating that the crowd is as uncertain as ever. All these factors bode well for the long-term health of the stock market. Hence all corrections regardless of intensity must be embraced as the Fed is going throw everything at this market, instead of just throwing the kitchen sink it is going to throw entire blocks of housing at this market.
Hot Money will continue to power the markets
The Fed has pulled a Houdini, flooded the markets with money and triggered demand destruction in several sectors. Fear is a powerful tool to employ, and the top players have used it with insane precision. It’s terrible news for the crowd but good news for the astute player. Sadly, everyone cannot win when it comes to life and investing in general. There is a good chance that the Euro could end up trading not only on par with the dollar but well below the dollar, but that is a discussion for another day. Just remember though, all of this free money comes at a price. What’s the price, you say? Personal freedom; Gestapo type forces start to emerge when the printing press runs amok. So given this trend, the US and many of the so-called top retirement places will continue to lose rankings. Fiat money and freedom are not a happy couple.