Fastest Drop in Stock Market History

Another terrible day today. We've gone from a week with the largest drop in stock market history to a week with the fastest drop in stock market history. Oy.

We do not expect an imminent bottom but with the fastest drop in stock market history, we guess the majority of the damage has been done at this point. But in over two decades of institutional investing we have learned the market goes much further than you think it should. Luckily, we have taken substantial defensive moves at higher prices, though you can never have enough cash in a market like this.

At these prices stocks are discounting a fairly severe recession, which we are likely to get. But even after the worst recession of our lifetimes, in 2008, the stock market was up 65% over the subsequent 18 months post bottom in March, 2009. Thus the market can turn very quickly. We will take more defensive actions if it continues to fall and will communicate when we feel we have hit bottom, though we do not expect it imminently.