We’ve talked quite a bit lately about how what you think are tail events (i.e. large drawdowns) aren’t actually tail events.
Similarly, we’ve shown you that when the inevitable occurs, there’s very little to be had these days in the way of diversification.
Along these same lines, remember the following about Donald Trump and his beloved (until Tuesday) stock market rally: at some point, it will happen…
(Bloomberg)
Although we should probably note that Trump does have an “out”.
That is, the way things are going, he may just get himself impeached before we see an equity drawdown.
And that’s not the only “unless” here…
unless nuclear war preempts any drawdown.
— Luke Kawa (@LJKawa) March 23, 2017
