[Genuine Realist]

I'm I misguided in my assumption here?  Please correct me if I'm wrong, but 15% unemployment and depression forecasts should not give us a stock market going up in value, especially considering the gigantic changes the economy is going to convulse through and evolve into over the next year or more, regardless of what governments do or don't do to manage the pandemic.

In a rational market where prices are tied to corporate profits (or even expected profits), you would be correct. However, due to many factors (government interventions being a primary one) that has not been true for many years (Maybe 50 or so, but much worse after 2008). Right now, and over the past 15 years at least, there was so much cash out there with no "real" place to go that stock was considered the only outlet. However, lots of that "cash" was created by unrealistic stock prices. People were making money on paper, but not in reality. The "Greater Fool" theory was in full bloom. Now we will see if that insanity can continue or if a real big "correction" must happen.

Sadly, about this issue Trump's approach may be correct. It is not what is true that matters, but rather what investors THINK is true that matters.

I don't think it's simply Trump who voiced the view that investor expectations are what matters (rather than economic reality). It's just bout every one who's ever commented on the market.

You can miss the elephant in the room here. The present turbulence is different from 2008 or 1929-30, or just about every market reversal in history, in that it has no relation to any quantitative economic factor. The American economy began to decline in mid-1928, and the market was staggeringly overvalued in October 1929, floating on a surreal amount of leverage. The 2008 fiasco has been too well documented for me to add to the comment here.

But in this case, we have a natural phenomenon, occurring out of a clear blue sky, to which the medical measures necessary require a drastic curtailment in economic activity. The one nut who suggested a visitation from outer space was goofy, but in terms of the effect on the stock market, it might as well have been. Out of a clear blue sky, havoc is unleashed. The number of unemployed don't relate to a collapse of credit or some worsening economic conditions, but to necessary health measures - completely different than anything we have experienced in the past.

You can't point to any pre-existing government policy that you'd name as a cause of the retraction, as you could in 1929 and 2008. There's nothing you'd really want to revise. We DO have long term, systemic problems with the division of wealth, but these do not bear on economic prosperity as such. Had the virus stayed in the Wuhan lab, there's nothing substantive you'd really change. I don't believe Trump deserves credit for this, any more than Obama did for four pretty good years in his second term. But he also didn't sabotage it, i.e., he's not in the same political position as Hoover or the unfairly blamed Bush. The hope of a TDS afflicted person such as Bill Maher for a recession because Trump represented an existential threat to the Union was TDS at its worst. (He's a bad obnoxious President you vote out of office - nothing more).

So if you're a stock market investor, what do you do? I think the bet is how fast semi-normal economic activity is restored. That that may be fairly soon. It's not fantasy.

Finally, despite the rally, the market is a good 20% down since February. There is some recognition of reality.

In short, bullish investors may be wrong. But they're not crazy. They're trying to figure out a phenomenon that has never occurred before.

[Genuine Realist]

I'm I misguided in my assumption here?  Please correct me if I'm wrong, but 15% unemployment and depression forecasts should not give us a stock market going up in value, especially considering the gigantic changes the economy is going to convulse through and evolve into over the next year or more, regardless of what governments do or don't do to manage the pandemic.

In a rational market where prices are tied to corporate profits (or even expected profits), you would be correct. However, due to many factors (government interventions being a primary one) that has not been true for many years (Maybe 50 or so, but much worse after 2008). Right now, and over the past 15 years at least, there was so much cash out there with no "real" place to go that stock was considered the only outlet. However, lots of that "cash" was created by unrealistic stock prices. People were making money on paper, but not in reality. The "Greater Fool" theory was in full bloom. Now we will see if that insanity can continue or if a real big "correction" must happen.

Sadly, about this issue Trump's approach may be correct. It is not what is true that matters, but rather what investors THINK is true that matters.

I don't think it's simply Trump who voiced the view that investor expectations are what matters (rather than economic reality). It's just bout every one who's ever commented on the market.

You can miss the elephant in the room here. The present turbulence is different from 2008 or 1929-30, or just about every market reversal in history, in that it has no relation to any quantitative economic factor. The American economy began to decline in mid-1928, and the market was staggeringly overvalued in October 1929, floating on a surreal amount of leverage. The 2008 fiasco has been too well documented for me to add to the comment here.

But in this case, we have a natural phenomenon, occurring out of a clear blue sky, to which the medical measures necessary require a drastic curtailment in economic activity. The one nut who suggested a visitation from outer space was goofy, but in terms of the effect on the stock market, it might as well have been. Out of a clear blue sky, havoc is unleashed. The number of unemployed don't relate to a collapse of credit or some worsening economic conditions, but to necessary health measures - completely different than anything we have experienced in the past.

You can't point to any pre-existing government policy that you'd name as a cause of the retraction, as you could in 1929 and 2008. There's nothing you'd really want to revise. We DO have long term, systemic problems with the division of wealth, but these do not bear on economic prosperity as such. Had the virus stayed in the Wuhan lab, there's nothing substantive you'd really change. I don't believe Trump deserves credit for this, any more than Obama did for four pretty good years in his second term. But he also didn't sabotage it, i.e., he's not in the same political position as Hoover or the unfairly blamed Bush. The hope of a TDS afflicted person such as Bill Maher for a recession because Trump represented an existential threat to the Union was TDS at its worst. (He's a bad obnoxious President you vote out of office - nothing more).

So if you're a stock market investor, what do you do? I think the bet is how fast semi-normal economic activity is restored. That that may be fairly soon. It's not fantasy.

Finally, despite the rally, the market is a good 20% down since February. There is some recognition of reality.

In short, bullish investors may be wrong. But they're not crazy. They're trying to figure out a phenomenon that has never occurred before.