There is a difference between being forward-looking and being able to predict the future.

Nobody thought the American economy was going to shut down, until it became clear that was going to happen. That was when we hit the circuit breakers.

Arguably the actual economic outcome has been worse than most people would have predicted back during those crazy days in March. The US's management of the pandemic has been worse than most of us could have predicted. And yet stocks are up.

That could be. Although I'd argue the opinions of "most people" are not always relevant to market moves, because most people are not controlling most of the money.

Regardless, the factors you mention are only two of the many factors that affects the value of stocks. The reason that causes a crash isn't necessarily the inverse of the reason it may go back up.

Poor management of the pandemic isn't necessarily a reason for stocks to drop, either. The market doesn't care about public health any more than it affects profits.

If we assume that the market is rationally pricing future revenues (and I don’t personally assume that at all right now) then you have to look at early March as a prediction that things were about to get extremely terrible in a hurry. As a macroeconomic prediction, that seems like it’s actually a pretty good prediction —- based on where things are in the real economy. But the stock market has since decided that the actual outlook is about the same now as it was in October 2019 on the tail of a record expansion with 3.6% unemployment. That doesn’t seem so reasonable anymore.

For a short time, the market envisioned the apocalypse. That’s what the media was selling, and enough market participants bought it to temporarily cause a sell-off. Also, consider that a very large percentage of market trading is algorithmic. In this sort of situation, they often amplify the panic by detecting human panic in the market and automatically selling.

I don’t get this argument though, I have shares and I don’t think the apocalypse would make me sell them, what good is all of that cash ?

The only people who should worry would be those who have all their savings in their share market, and I doubt the majority of share holders have all their money invested.

Not sure this checks out. I’d sell because I’d hope to buy once we rescued the bottom though.

The market is only wrong when it goes down, it seems.

The market is wrong all the time, that’s why it changes.

The general public is much more interested in why their 401k disappeared than they are interested in reading articles about crazy P/E ratios in bull markets.

People thought the virus would hit harder, and so the long-term impacts would be worse, than they do now.

The demand curves and supply curves are constantly shifting.

The first sell off was emotional, the rest was forced margin selling. It was beautiful.