Some thoughts on world markets today & PMED I’m watching 25 stocks right now and every one is red. There are a number of reasons for the bloodbath today:
The US saw a spike in Covid cases raising fears of a second wave. The Dow crashed hard 1800 points. This was entirely predictable as the news had aired crowds gathering all across the US for a couple weeks now.
The rise in the stock market was extremely premature but the fomo of missing the meteoric rise after the massive fall was to great to ignore by many pushing prices up far past where they should be.
Our economies are driven primarily by consumer spending which accounts for 70% of GDP. Yet we see huge household name companies going bankrupt one after another, all of them laying off thousands of employees all of whom will no longer be buying anything for some time.
J crew, Neiman Marcus, Hertz, JC Penny, and dozens of others all going bankrupt.
Household debt is expected to set a record $2.30 for every dollar earned smashing the old record of $1.70 for every dollar earned.
The US has entered a recession. Buying stocks in most companies should be the last thing people are doing.
PMED, despite our decline today is the exception. My motto has always been I sell when you buy and buy when you panic. Today is a perfect example of a panic day. If logic were to hold we should be going up not down due to the nature of what we offer. Markets tend not to act logically much of the time.
One of the benefits of pmeds decline today is that everyone buying today likely knows some of the story and of course will want it to go much higher from here keeping their new shares in “stronger hands”. Also remember people were up 100-200% or more before today as well. Selling begets more selling which triggers stop losses which declines the price even further.
I know nothing has changed and everything that was discussed previously still holds. The sky is not falling on PMED. In fact the future is quite bright indeed.