Stock Market Crash 2020-Oil Prices Drop 30% . Oil markets fell the most since 1991 after the disintegration of the OPEC+ alliance looks set to trigger an all-out price-war. Crude futures dropped almost 30% seconds after the open, following last week’s massive losses.
The causes: a collapse in demand due to the coronavirus, exacerbated by an all-out price war after the Saudis slashed official prices Saturday by the most in at least 20 years, and signaled they would maximize output.
But the end-game here is not low oil prices, but rather forcing Russia back to the negotiating table. The question is how long – if at all – that will take. “We would stress that it is not in any OPEC+ nations’ interest to have sustained oil prices below US$50, and hence we see this solely as a strategic move from the Saudis,” RBC says.
Responding to Russia’s face-slap on Friday, Saudi Arabia launched an all-out oil price war on Saturday. The world’s No.2 oil producer (following the U.S.) slashed pricing for its crude in an effort to push as many barrels into the market as possible.
The cuts are an indication of how the Saudis will respond to the break up of the alliance between OPEC and partners like Russia. OPEC talks Friday ended in dramatic failure, as Saudi Arabia failed to get Russia to agree to a prolonged production cut.
Today (Saturday), Saudi Aramco, the Saudi state producer, lowered April pricing for crude sales to Asia by $4-6 a barrel and to the U.S. by $7 a barrel, launching a full-out war.
In February, Saudi Arabia produced 9.7M b/d. But with the agreement on cuts expiring at the end of the March, it can pump as much oil as it wants; it claims it can produce as much as 12.5 million barrels per day.
Warren Buffet’s Thoughts On A 2020 Stock Market Crash. What To Do When The Stock Market Crashes According To Warren Buffet
1. Focus on the underlying business rather then seeing companies as stock ticker symbols
2. Don’t buy stocks at elevated valuations. Cash is a position. Always keep cash on the sidelines for market down turns to take advantage of opportunities.
3. Don’t try to time the stock market. There are periods of economic booms and busts. Stay the course. A loss will translate into gains over the long term.
4. Stay invested. Investment returns will smooth out over time. Especially over longer time periods.
5. Go shopping! As share prices are collapsing wonderful businesses are on sale. Stock market crashes are one of the rare times these wonderful businesses can be purchased at amazing prices. Extraordinary opportunities present themselves.
How to make millions through Benjamin Graham’s eyes.
Key Arguments put forth by Benjamin Graham in the intelligent Investor:
1. A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
2. The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.
3. The future value of every investment is a function of its present price. The higher price you pay the lower your return will be.
4. No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety”-never overpaying, no matter how exciting an investment seems to be- can you minimize your odds of error.
5. The secret to your financial success is inside yourself. If you ecome a critical thinker who takes no Wall Street “fact” on faith, and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and courage, you refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
Stock Market Crash analysis 2020. Stock Market Crash. Stock Market Crash News.
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