Algos And E-Commerce, Bonds And Bloodshed

Algos And E-Commerce, Bonds And Bloodshed

If you were wondering whether familiar accelerant flows played a role in Thursday's wild ride on Wall Street, the answer is: Of course they did. Plainly, the bond rout (made worse by a concerning read on unit labor costs), was a major catalyst, but as is so often the case, once things started moving in the wrong direction, the equity selloff took on a life of its own. To the extent they remained in play, hedges accumulated into this week's Fed event risk may have been problematic. "With spot m
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2 thoughts on “Algos And E-Commerce, Bonds And Bloodshed

  1. I see pitches about it being time to buy the bombed-out e-com, Web 2.0, etc names because valuation is “reasonable” and fundamentals are “good”.

    The lesson from deep cyclicals investing is that buyers need valuations to be “low” or “unreasonably low”, valuations need to embed normalized growth, and fundamentals to be “bad” or “outright bad”.

    Some of the pummeled names are, in my opinion, starting to meet two of these three requirements. It would be helpful to see some outright bad reports. Big misses, big guidedowns, layoffs, etc.

    Of course, the company’s business model needs to be able to survive a period of outright bad results. Some of these guys are in fact wearing no clothes.

  2. H-Man, a forest fire can be a welcomed event since it promotes new growth from the ashes of what was. We definitely have the forest fire, the issue is what the new growth will resemble?

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