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What’s To Become Of The Stocks?
But what does Mike Wilson think? "Where is Ja?!" (Somebody will get it.)
Credit where it's due: Staying alive -- to say nothing of getting yourself on the right side of the trade without abandoning your principles -- is difficult for stalwart skeptics during incorrigible equity melt-ups. The nine-month stock rally from the local lows in October of 2023 to the high water mark for the S&P in July certainly counted as an incorrigible melt-up. And Wilson's a stalwart skeptic. He's still alive.
The problem with history is the sample size is statistically too small. Nobody’s fault. Appreciate the commentary and analysis anyway. Hoping Powell and company go big on the cuts. Real rates are restrictive and I fear a credit event. Better to cut when you can, not when you have to.
“The problem with history is the sample size is statistically too small.”
Exactly. Business / macro / market cycle analysis is everywhere and always bedeviled by the “small n” problem. Amusingly, it (the “small n” problem) gets short shrift despite the fact that if this were statistics, it would render all this analysis wholly unreliable, and arguably not worth troubling ourselves about.
I’m reminded of discussions in poker forums where people would share their hand history stats & ask for feedback. The history might be from 10,000 to 20,000 hands played. Generally speaking, the response would be, “LOL sample size.” It seems like a huge number of hands, but when you break it down, the number of times you played common scenarios–and how well you played them–is small. How many times did you run kings into aces? Overpair against an obvious open-ended straight draw? Set over set? Not enough times to matter. So the ~14,600 days that have passed in the last 40 years seems like a pretty big sample–especially for those who lived through all those days. But the number of times we’ve faced, well, any given scenario you care to imagine? LOL.
I don’t get it because I am not a Dave Chappelle fan. That doesn’t mean I haven’t been coerced into watching 🙂
Harnett says sell the first cut
MS’ scenarios are funny. They implicitly assume FOMC has special insight into strength/weakness of economy but not into inflation outlook.
There’s a lot I don’t get but Chappelle references aren’t one of them.