Will we see 312 again in 24 years?

I have talked about before that there will be adjustments after ETFs are approved, but the adjustment amplitude may not be that large. In 2023, the adjustment amplitude for each wave was more than 20%. Of course, I also saw some people saying to wait for 312, and I talked to my friends in the morning that the probability of encountering 312 again in 24 years is very low.

Why is it said very low?

The core is the difference in the macro environment. From the afternoon of March 12 to the morning of March 13, 2020, the pie was cut in half, from more than 8,000 to 3,700. In fact, the triggering factor is not the currency market itself, but the large-scale spread of the new crown epidemic around the world has caused collective panic in the global market, and various assets have been sold intensively: within a month, the Nasdaq fell by 33%, the S&P fell by 35%, and the Dow Jones Industrial Average fell by 35%. Gold fell 40% and fell 15%. Before March 12, the U.S. stock market had circuit breakers three times, and in March 2020, the U.S. stock market had circuit breakers four times. Funds poured into government bonds like crazy, causing the yield on the 10-year U.S. Treasury bond to quickly drop to 0.39%.

Here we will talk about the impact of emergencies or black swans on the market. The market is afraid of black swans because they are uncontrollable, but different risks have completely different impacts on the market. When the new coronavirus spread on a large scale in March 2020, because it was completely unknown and spread extremely fast, all European, American, and East Asian countries fell in a short period of time. The Black Death and the Spanish Flu of 1918, which were the most talked about in the market at that time, had a completely doomsday feeling. Even though technology was so advanced, everyone found that they could not stop the rapid spread of the plague. The impact of this sense of doom is very great.

Therefore, even if the Russia-Ukraine war breaks out in 2022, it will only be a small panic for the market. From the end of February to the beginning of March in 2022, the U.S. stock market fell less than 10%.

Throughout 2022, due to the aggravation of inflation and the Federal Reserve's strong interest rate hikes, the declines of the Dow and S&P throughout the year were far less than the one-month declines in March 2020. The magnitude of the impact of the epidemic at that time can be seen. To only talk about risks without talking about the possible impact of risks is to be a hooligan.