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  • Writer's pictureIshfaaq Peerally

Did the Stock Market Bottom?


It is impossible to predict what will happen to stocks today, tomorrow, next week or next month. What we can do is look at different indicators and probable scenarios. The most likely scenario is that stocks will go even lower. We have not reached the bottom yet. The S&P 500 $SPX500 fell by 32% before having its best week since 1938. That's why so many people are saying that we have reached the bottom. You cannot use this argument. The best days of the stock market and the worst days of the stock market usually happens around the same time. In the short-term, the stock market is random and unpredictable. RIght now, things are volatiles and that's why there are big movements on both sides. Good investors always ignore the noises and focus on the long-term. The analysts that are saying that we are going to have a recovery by the third quarter are very optimist. We shouldn't be expecting things to get back to normal without sacrificing lives. If we are trying to flatten the curve, it means this pandemic will last longer and will affect the economy for longer. In the long-term, however, it won't matter and in 10 years, people would have already forgotten about it. You may tell me that the market priced all of this. Did it price the earnings? Nobody knows what to expect in these earnings. Some companies will have zero sales for months. I don't think Wall Street has already priced that. If a country uses debt to get out of a recession, is it really out of a recession? All this money printing will certainly lead to inflation and even if the stock market recovers, it won't be a real recovery. A 10% return with 6% inflation is only a 4% real return. Don't expect the inflation adjusted S&P 500 to get back to all time high any time soon. The main reason why the S&P 500 is doing not that bad is because of tech companies such as Amazon $AMZN , Microsoft $$MSFT and Netflix $$NFLX . Year to date, these companies are all in green. If you look at the NYSE Composite index and the Russell 2000, you'll see that things are really getting worse. The Nasdaq 100 $NSDQ100 is not the stock market. Other indices are still deep in a bear market. I may be wrong about the stock market and that's why I tell you not to focus on the stock market. Look at individual companies. There are numerous companies at bargain prices. You can start buying. If prices fall, you buy more. Watch the full video on YouTube and Subscribe: https://www.youtube.com/watch?v=nqXih5_9AC8&list=UUPO3uUyoXSaFWG-Ldq1mqEQ You can access all my analysis here: https://ishfaaqpeerally.teachable.com/ Join my private investing group on Facebook for more: https://www.facebook.com/groups/IshfaaqInvesting/

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