Witnessing a bubble created by people's unrealistic expectations

31. Mai 2020

A lot of inexperienced newbie investors are piling up the market yet the reality of the economic atmosphere is not robust at all. A lot of companies are filing for bankruptcy, consumption, production, and employment are extremely low (and not expected to recover fast). As small, inexperienced investors are rushing into the market, the big institutions are more aware and cautious of what is happening at the moment. The prices are at an unsustainable level and we are living a bubble that is created by people's unrealistic positive expectations.

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Billionaire investor Stanley Druckenmiller says the stock market's risk-reward is the worst he's ever seen — and downplays the Fed's ability to rescue the economy

• He also worries that a V-shaped recovery from the coronavirus pandemic is "a fantasy."
  

https://markets.businessinsider.com/news/stocks/stanley-druckenmiller-says-stock-market-overvalued-fed-cant-protect-economy-2020-5-1029197205

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Young investors pile into stocks, seeing ‘generational-buying moment’ instead of risk

• The major online brokers — Charles Schwab, TD Ameritrade, Etrade and Robinhood — saw new accounts grow as much as 170% in the first quarter, when stocks experienced the fastest bear market and the worst first quarter in history.
  
• “Traders here are ‘buying the dip’ in a lot of names with questionable fundamentals now, i.e. airlines, highly volatile stocks, low in recent price momentum, and ones with that have recently (in the last 3 months) had lottery ticket like upside payoffs occur,” added Krause. “Robinhood investors are making all the classic mistakes in the short term. May work for today’s market, but not in the long-run if repeated.”
  

https://www.cnbc.com/2020/05/12/young-investors-pile-into-stocks-seeing-generational-buying-moment-instead-of-risk.html

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Besides what's mentioned above additional factors like the possibility for a second wave of infections, U.S.–China tensions, and many more are currently being bypassed by the market.