Exactly, and it doesn't matter whether or not markets are actually efficient when it comes to explaining this price move. People were willing to pay what they paid for stocks yesterday. Today, news is better than expected. They'll now be willing to pay more. If they believe that markets are efficient, whether or not they actually are, that'll support buying even more. So better than expected news makes prices move up. The main point I'm trying to make is that this move isn't because traders are happy there's so much unemployment.

I think you meant economists. People working in finance are usually under no illusion of whether the market prices in all the information at a given time, and are rather focusing on who does what.

I'm more talking about people in business in general. You'll see alot of posts on HN where people have faith-based belief in the market, for example.

Finance people make their livings working around information asymmetry and optimizing for market outcomes. (But remember, the thumb is on the scale, and many are too big for the institutions to fail!) If the market were magically aware, they wouldn't have a job.

The sophisticated participants are well aware of the economic realities, but as long as there's money to be made (eager retail investors tagging along), they'll keep this up, because why not?

There's an obvious moral hazard for these larger players, because as it stands today, heads they win, tails we all lose. We have a defacto policy of socializing risk for financial institutions.

You're not hearing about money guys jumping out the window in 2020 or 2009 like in 1929. The firms are corporations that insulate the principals from the risk. (Until about 20 years ago, many of the big players were limited partnerships, for example)

If you're so sure of that, I hope you are shorting the market.

I don't have the cash or the time to do that.

My approach was to allocate my portfolio to 50% cash/short term bond in the fall/winter as a reaction to other factors that I wasn't personally comfortable with. I'll start dollar cost averaging into a more equity focused allocation later in 2020 or next year.

It's too risky for me right now, Federal policy is so unpredictable and insane you have no idea what will happen. For example, the proposal floated last night to delay 2019 tax filings to after the election will bankrupt states with income tax, whose policies didn't forsee a madman POTUS.

If we end up in a depression-like state, i may use the cash to keep my house, etc.

I'm not prepared to take the unlimited downside on that, but I did largely get out of the market recently. The Dow hit the 7000s in the last recession, and every indication is that this one will be far larger.

Theres many ways to do that without unlimited downside. Buy long dated puts. If you really think the DOW will hit 7000, then buy gold because everything will crumble. What bad news do you expect to cause the market to decrease by 70%? States are opening up with success and even South Dakota who did absolutely nothing seems to be doing pretty well

> What bad news do you expect to cause the market to decrease by 70%?

The recession we've just entered?

> States are opening up with success

Sure, and the Iraq War was winding down back in 2003.

https://en.wikipedia.org/wiki/Mission_Accomplished_speech

When companies miss their revenue by 5%, the stock plunges. We're in a reality where whole industries are nuked.

I'm friendly with the guy who owns a gas station franchise -- his business is down 90%. The oil company, CocaCola bottler, candy distributor, Frito-Lay franchisee, gift card network, etc are all feeling that.