Why is the stock market rallying when the economy is so bad?

Re:Why is the stock market rallying when the economy is so bad? by cm2187 on Sunday May 10, 2020 @06:08PM (#23136745)

True but you are taking say a -30% loss risk for only 0.5% expected return. I don’t think any risk manager is going to be very comfortable with that risk/reward.

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Re:Why is the stock market rallying when the economy is so bad? by chii on Monday May 11, 2020 @02:48AM (#23139495)

> -30% loss risk for only 0.5% expected return.

vs the alternative - a guaranteed loss of 4%?

And the expectation of only 0.5% return is only going to be short term. Long term recovery is a good bet imho.

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Re:Why is the stock market rallying when the economy is so bad? by xvilka on Sunday May 10, 2020 @11:02PM (#23138515)

Just use dynamic hedging, risks will be smaller.

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Re:Why is the stock market rallying when the economy is so bad? by HPsquared on Sunday May 10, 2020 @08:04PM (#23137498)

Cash might have a similar risk (inflation).

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