[quote=Rich Toscano]
I should note here that I think the US stock market started out very overvalued, which complicates things. But assuming stocks were starting out reasonably valued (as many international stock markets were, imo) — then I think a 30%+ decline is a huge overreaction.
[/quote]
Goldman Sachs predicts a 24% contraction in the second quarter followed by growth of 12% (3rd quarter) and 10% (fourth quarter).
I can see how the decades-long earning stream you described (and thus stock prices) would be minimally affected (or at least not 30%) in the long run by such a thing.
I guess I was under the impression that these things (huge contractions) had more…I don’t know, momentum or long-term effects than that. Or residual effects or ripple effects or indirect negative effects.
