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401k withdrawals impact on stock markets
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johannes
Posted 3/26/2020 11:15 (#8140211 - in reply to #8140165)
Subject: RE: What value do the Sharks let them back in at?


JonSCKs - 3/26/2020 10:55

After a 33% sell off.. at what price do the Sharks let them back in at?





My point was that regular people will be selling at the lows (wall street buying what the muppets are selling), and then the regular people will be getting back in (over the next 3 years buying the shares from Wall street) at higher prices.... That is, WHEN or IF we get higher prices...  

With all the stock buybacks from the last 5-10 years, companies have removed a non-trivial amount of available shares from the marketplace.....  So more and more dollars will be chasing a lower (in aggregate) share count.  Can they re-issue shares and do additional offerings??  yes.  But I don't see them doing it right now with stock prices near lows AND with interest rates sooooo loooowwww!  It's still seems like a better deal to borrow the capital in the bond market at low interest rates instead of issuing more shares at these prices and diluting existing shareholders.  Of course, this all hinges on whether or not companies can keep their bonds rated as investment grade; thus allowing the sponsor/underwriter to sell the paper to the Fed.....    As always, we'll have to wait and see...... 

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