Terry’s Columns Why it’s not over at Dow 21,575

Why it’s not over at Dow 21,575

By Terry Savage on March 12, 2020

Here’s why I’m pretty sure that the market will go lower — even as I write an hour before the close with the DJIA down more than 1900 points.
Today, all in one day, three different people asked me how to get “in”!

They included — and I’m serious here — my dental hygienist, the gal who runs the barn where I board my horse, and a friend who is a real estate investor! Not one had any experience in the stock market, but they all wanted to know what to buy now. That doesn’t count the many Ask Terry questions and emails asking what to do “now” and when to buy.

All of this confirms my sense that we have been “trained” to expect that any decline will result in a bounce higher. We may get a bounce, and some stocks will bounce back more — but I think we are a long way from seeing new highs in the market. Frankly, it is far more likely to me that we will see significant new lows, even if there is a bounce.

The damage already done, and in process, to our economy is just too great. Note: this current economic damage is happening way in advance of knowing the magnitude of the spread of the virus or its impact on our health services.

We should all pray that the anticipation of this virus is far worse than the reality becomes. But an economic slowdown is already a reality. Closings, cancellations, distancing — all have withered a vibrant economy and will have their impact not only on economic statistics but on individual livelihoods.

In fact, we cannot begin to account for this impact in stock market prices or falling corporate earnings. This is already a human tragedy — in terms of lives interrupted –far greater than the economic tragedy that is being revealed.

I don’t forecast stock prices or market turnarounds. I don’t take politics into consideration. The Savage Truth is about reality. And right now reality is ugly, on several levels. First, and most noticeably, the ugly reality of the stock market. That’s the Savage Truth.



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