Marko Kolanovic: ‘Over The Past Month, Confidence Virtually Collapsed’
It's been a while - which is understandable because, well, because holidays and such - but Marko Kolanovic is back.
When last we heard from the Street's most revered strategist, Kolanovic warned that the market was becoming increasingly disconnected from economic reality.
In the course of explaining that disconnect, he cited a number of factors, not the least of which was the rampant dissemination of misinformation, both market-related and otherwise. He also cited a dearth of liquidity, bomba
Wow, you were busy today. Love your reports, but your pace just boggles my mind. You give Trump’s tweets (volume wise, not wise wise) a run for their money. To wit: Happy New Year!!
Sometimes looking for a complicated explanation needs to be replaced by a simple one. Even for the best of us, if we step back a few paces and focus at a range where our eyes see clearest it can help see through the fog of confusion . We all saw this coming if we didn’t get too greedy … It was just a matter of when not so much why… The why was obvious.!!
Ahh finally thanks for the secondhand Gandalf fix. Seems he pounded the table about risk of a violent low-volatility unwind for a while before it came to pass also…
I love the “and such”.
Ok, his note suggests he is shell shocked. Not a lot of insight. Of course reflexivity is alive and well. The duration of the unease and any policy adjustments will help in declining the future course. Still a lot of overvalued stocks out there but for companies with moats a 10yr at 2.65 makes those future cash flows more appealing. And the equity risk prem in those is looking a whole lot better.
Gandalf sold out to Dimon’s world view. Dimon should fire him for not making an independent professional judgment. Amoa and all these “analysts” are using metrics from the 70s, which make them too late today. They maybe could look again about intrinsic concepts in Smoot Hawley.
You assume that anyone who isn’t bearish isn’t making an “independent, professional judgement”. Are fearmongering and generalized pessimism the determinants of “independent and professional” now? Give me a break. Look at the people who have been spouting that “fear”/”crash” bullshit on their blogs for 9 years. How did those predictions turn out? Spoiler alert: The authors became standing jokes in the financial community, although on the “bright” side, they got rich off clicks from the Alex Jones crowd.
Now, I am no theoretical physicist, but this sentence makes absolutely no sense to me: “Kolanovic goes on to suggest that retail flows can be a contrarian indicator as the retail crowd ‘tends to buy at times of exuberance and sell at times of panic.’” That…that seems to be the opposite of contrarian, no?
That is the point he was making. When retail is flushed out in a panic that could in most cases be a good buying opportunity. And heavy retail buying could be a good opportunity to lighten exposure to risk.
Key word is ‘indicator’. Trade counter to retail flows.
I just love it when the smartest guys in the room have to walk back the talk. I think we are in one of those times that what anyone gets ‘right’ will be mostly a residual accident. Until the turd-in-office is removed why would anyone act rationally other than to GET OUT of town? Since my colorful introduction to the macro compliments of and to Herr H., and subsequent interest, I am now fully qualified to say, macro shmacro…