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Albert Edwards Has A New Bear Narrative
Albert Edwards has a bear narrative. More than one, actually.
Albert's collection of bear narratives is a lot like my collection of designer sweaters: He has one for every occasion.
This week's story from Edwards is that analyst optimism's rolling over, at odds with other indicators which've inflected for the better. The disparity, he warned, may presage some kind of downturn -- macro, market or both.
After alluding briefly to the RRP liquidity buffer and the extent to which it facilitated a
We are neither at the troughs of investor fear, estimate cuts, pessimistic expectations, negative surprises, and excessively low valuations, nor at the highs of investor ebuillence, estimate hikes, aggressive expectations, positive surprises, and excessively high valuations.
We’re somewhere on the path from the former to the latter. I don’t have a good sense of how far we are along the path or how close to the end. There are negatives, Edwards points some out. There are positives. The diffusion index probably looks positive, we can estimate how long the path might be, but diffusion indices can turn rapidly and the path could get cut short by big negative surprises.
Strategists have to make those calls and good luck to them. I think that for regular investors, best to focus on getting the best ideas in the portfolio, maintaining risk didcipline, while keeping your ears cocked for creaking and snapping sounds.