During discussion about things where you had strong opinions and then changed your mind, someone mentioned EMH. Do you believe in EMH and if so is it strong or weak version?
I used to believe EMH but not strongly. The pandemic changed my view because I managed to invest some money when the stock market dived and was clearly influenced by overly pessimistic view of the impact of covid. Some might argue that the market reacted to the irrational government measures, so it is not that the case that the market was mistaken. I still think that investors were equally irrationally pessimistic. I reject the view that this is a hindsight and I was merely lucky. I am not big expert and I did not possess any proprietary information. I had the same information as everybody else, I just didn't let my emotions take over me. This is further confirmed that even today when all the events have passed exactly as predicted, majority of people still maintain their mistaken views that covid was very dangerous to young and non-risk population.
It is the only time when I saw the rest of the society to be so wrong in their views and clearly this was my once-a-lifetime chance. I haven't see any other opportunities for easy money so far but I think that people who are experts in their fields and investors might have been able to find more opportunities.
One of them was found by Michael Burry who definitely saw that the 2008 financial crisis was coming. He wasn't just lucky because he had read and analysed all the documents and had to create special investment instruments to profit for it. In this way, it wasn't easily accessible by laypersons like me who have no time or understanding about investment. Again, most professionals were blinded by collective frenzy.
What is your opinion about EMH?
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Notes -
You are missing the main reason why the stimulus was too much this time. It was simply because the government acted in contradictory ways and prevented people spending money. The fact that different restrictions continued after most elderly had received vaccine was the biggest unforced error.
I'm not saying the restrictions were justified, but you are dramatically overstating their macroeconomic impact, especially post-vaccine rollout. In 2021-Jan, vaccines had just started rolling out and personal consumption had returned to its pre-covid peak. You think that's a bigger factor than the largest stimulus bill in history being passed during middling economic conditions? Not to mention monetary policy...
I am not sure I believe that. The reason of the crash and everything that followed was solely due to the government's mistaken actions. I don't know specifically about the US, but the life in 2021 was far from normal and it was also solely due to the government's mistaken actions. It would be strange if it had no deleterious effect on the economy.
The government was trying to whitewash the negative effects on people.
I never said it had "no deleterious effect on the economy".
The data is easily found.
This data does not show this. Even if the expenditure increased but it could be the case that it went to wrong sectors of the economy.
Can you be more specific? Eating in restaurants, for instance, was more than recovered by March 2021. There was a significant shutdown between March and May of 2020, but outside those three months, we're talking like a 10% decline in eating out. This is in the sector that I saw most harped on as ruined by Covid.
I was in Spain and it definitely hadn't recovered in 2021. The amount of people on streets were visually lower.
Healthcare utilization in the UK during covid was 80% of normal. That is one of the most contra-intuitive things because most people believe that healthcare was totally overwhelmed during pandemic. Well, some places were but in general the income of healthcare workers took a hit.
However, the amount of money we spent on vaccines that later were thrown out were unusually high. That means that other needs did not get financed sufficiently. The distortions are quite clear and apparent in every sector where I look.
In the US (again aside from March - May) there was a modest decline in healthcare spending. By 2020Q4, spending was a wopping 1% lower than 2019Q4. The UK government reported a significant increase in health care spending in 2020 and 2021 relative to 2019. Please cite your "80% of normal" claim.
Utilization, not spending.
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