‘Sure,’ The World’s On Fire. But Strats Controlling $1 Trillion Will Still Buy Stocks

‘Sure,’ The World’s On Fire. But Strats Controlling $1 Trillion Will Still Buy Stocks

I love reading copy sometimes. Whenever the world is going to hell in a handbasket, journalists don't usually have as much leeway as they might need to convey the severity of the situation, so they're left to simply document facts. Of course, when things are acute, simply listing facts comes across as an attempt at dry humor, even when it's not. Consider the following bit from Bloomberg's Yakob Peterseil, for example: Sure, this is still 2020: President Donald Trump has yet to concede the ele
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6 thoughts on “‘Sure,’ The World’s On Fire. But Strats Controlling $1 Trillion Will Still Buy Stocks

    1. The more I read H the more I realize that most of the market is really unknowable. Opinions may be formed but true knowledge of actual outcomes is just not there. As they say in Hollywood, “No one knows anything.”

  1. Great post as usual.

    Awesome. This will be a great play going into year end. Let the indicators mellow out from Monday’s whatever, chill for some number of trading sessions. Pet the neck of $VIX. Then unleash the animal spirits for the year-end melt up.

    Seems that any melt-up won’t really care about our government’s abject failure to help the nation in a time of mass grief and suffering, nor about anything 45, arguably the worst US president up to this point, could possibly do. Barring a breakout of a hot war or some other, well, let’s just hope nothing goes wrong, should be a solid trade.

  2. The models don’t care about Covid, politics etc. These “risk parity” models appear to be a derivative of simple trend-following models, don’t they? Derivative because they react to changes in volatility which are believed to be mainly directional = markets up/vol down.

    No different than options skew.

    As such, these kind of models are self-fulfilling as early buyers pull in others behind them.

    Pity the poor journalists who are asked to explain why “the market” is going up in the face of bad news. How many Americans will understand what volatility-driven “investing” is. Or how much it has come to dominate stock market direction.

  3. I don’t know… Moscow Mitch and Colonel Bonespur just don’t appear to be worried enough. There’s something afoot. I suspect that the electors that attend the Senatorial approval and pronouncement of the election results may not relay the true results from each state. Mitch would have no problem in passing along the altered results as genuine and proclaim DJT as re-elected.

  4. I see options on individual stocks trading below recent realized volatility. Is volatility over because the election is over? I’m a buyer of volatility, not a seller (both long and short).

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