Exciting, Dynamic, Price-Setting Mechanisms

Exciting, Dynamic, Price-Setting Mechanisms

Another session in paradise found US equities dawdling, or "chopping around," if you prefer to conceptualize of markets as exciting, dynamic, price setting mechanisms, always hard at work matching buyers and sellers in the name of efficient capital allocation. (Insert sitcom laugh track.) The S&P touched a new record "bolstered by earnings," to quote somebody, although I'm not sure who. That's just a generic bit of boilerplate copy that would fit right in at any mainstream media outlet. "R
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6 thoughts on “Exciting, Dynamic, Price-Setting Mechanisms

  1. Markets don’t allocate capital efficiently. CAPM has been thoroughly debunked (see high/low beta anomaly), and capital allocation has been deteriorating at an accelerating rate since the early 1980s, likely due to ever lower interest rates that reward all speculation and keep zombie companies alive https://www.bis.org/publ/qtrpdf/r_qt1809g.htm.

    1. The low vol stuff, I find fascinating but I was wondering if it is still applicable to recent years where tech stocks have dominated performance… they do seem more volatile than the average, in general…

  2. When is national debt the worse thing that can happen to a country? There are some who think crumbling bridges, starving children, no internet and 40% of the population with less than $400 in savings is a fair tradeoff. Maybe they are hoping an undereducated citizenry won’t be able to figure out the con that’s being played.

  3. Yes, now we know better how one country sneezes and another catches a cold. Yet the Sensex (India’s Dow) is fully vaccinated from the malady and is about 1.5% from its record. We will see how this disconnect between risk assets and actual Risk plays out. The graveyard is there whether you whistle past it or not.

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