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A Red Flag For Stock Bulls
There's a lot of cash on the sidelines. Nearly $8 trillion in money market funds, for example. And a
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I’m not sure how they plan to run the economy hot, while holding down inflation, beyond the initial manufactured drop in oil prices, which will eventually reach bottom and turn inflationary too.
Indeed as you point out, 1 instance per 2.5 years on average is beyond rare, it’s practically anecdotal. Even perfect-record statistically-significant anecdotal predictions fail if there’s not a clear causation mechanism (which this is certainly not). Witness the fall of the Redskin Rule after decades of winning… although I wonder if that one’s not a Heisenberg Uncertainty issue, since it started failing just after it was recognized and published.
“Not least of which is the simple fact that if you buy stocks trading on some of the richest forward multiples in recorded history, you’re stacking the long-term deck against yourself. . . .”
That.
This may be a stupid question, but what percent of professional fund managers positions are hedged? And if the answer is ‘most’ or ‘all’, then what role does a cash reserve play?
Many or most institutional fund managers are restricted on how much cash they can hold for any length of time. The end clents and their consultants want to decide the total allocations, including overall cadh levels.
But if you are referring to hedge funds who do not labor under that constraint, your question is worth pondering.
So many of the “rules” cited by old-school analysts and commentators were drawn up 25 year ago, Things do change now and then…..
I might have slipped in a reference to “Things Change”