I keep seeing people overlay the s&p from this year to the same chart in 2008 and claiming that this is clear indicator of a classic bear market rally.
While it does look just like that, I can’t help but think that when I think about 2008 and compare it the conditions of today. It just.. doesn’t seem as bad.
I mean in 2008 there was legitimate fear that banks were going to completely collapse. Unemployment was soaring. And the backbone of the housing market had been being built on fraud and greed for years.
Today things just don’t really seem that bad to me. And honestly I’ve felt that way this whole year. Banks are cash loaded for one. Yes we have massive inflation, and yes I know we’ve retired the term “transitory” but like, it does seem that inflation is most likely going to trend down to semi normal levels over time. It was caused by the global economic stimulation at the start of the pandemic obviously, and made worse by bottle necks, conflicts, and a surge In demand for oil. But none of these things are permanent problems. We’re raising rates, EVENTUALLY supply chains will return to normal, and everyone’s ramping up the oil rigs which (along with other factors) has already started to return oil to more normal levels.
The job market is strong as hell. Have we seen layoffs? Yes. Will we continue to see layoffs, probably. We are in a recession after all. But is unemployment surging? No. It’s actually very very low all things considered. This makes me feel like -ethically I hate saying this- but we can probably afford to see some jobs lost due to the rate increases.
The housing market got euphoric. This is obvious and imo the market will probably be in a decline for a few years. But I don’t feel that it’s in an absolute disaster state. Plus let’s not forget, stock market bottomed 2009, housing market bottomed 2011.
So now here’s where we’re at. We’ve gotten pretty beat up already. There are many many great companies down 50-90%. And imo the future just doesn’t look as bad as everyone seems to think. I’m bullish
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