I’m kicking myself for not posting this yesterday, like I wanted to. Today, with the Dow down around 800 points and NASDAQ down around 600, I may seem like I’m being captain obvious.
However, with the NASDAQ only down 3% and the NASDAQ only down 4.5% off of record highs, I believe that gravity will not let up so easily.
Sure, some Robinhood investors may see this as a chance to catch some stocks on the cheap, but we’re talking fundamentals here! Most of the people on Robinhood don’t know a thing about market fundamentals, and those who do will likely scoff at the very subject.
Back in the year 2000, while I was taking an Information Technology class in college (more specifically -Oracle), I recall one student loudly telling another that his JDS Uniphase stock had nearly doubled to something like $105 per share. The Dot-Com bust spared almost no tech company, including the biggest names in tech at the time.
A year later, JDS Uniphase was clinging to $5 a share. Yes, the stock recovered much later, but the moral of the story is simply keep your powder dry. There will be a chance in the future to make money in the market. Now is not the time. Park your cash in different places, earn that measly percentage rate that your family & friends are joking about, and wait patiently.
INFLATION
One of the main caveats to holding cash is inflation. But with 30 million people out of work, stores and small businesses closing by the thousands, and millions facing eviction, that’s not a worry right now.
Yes, the Fed will likely print more money, but it’s extremely likely that will be eaten up feeding liquidity into a the market in any kind of event like the one we see today. That, my friends, will largely end up in the pockets of a handful of billionaires and opportunistic investors (kinda like us, but with more access) who will be buying real estate, equites and other assets at a very nice discount.
REconomix 