“After many years of consistently high return correlation, the Financials and Information Technology sectors have posted significantly divergent performances twice during the past nine months.”
Thursday was all about people who might have gotten away with murder…
3 biggest tail risks: crash in bond markets (28%), Fed/ECB policy mistake (27%), China credit tightening (15%)…central banks seen as much bigger risk (the “red herring”) than EPS, and yet…
Netflix, Goldman, “own dick eating,” a failed healthcare bill, dollar doldrums, and so much more…
All told, the mood remains “risk-on.”
Oops…
“Guess what people immediately did? Why, they fled to the “safety” of overvalued, high-flying tech stocks, that’s what they did.”
“Because we launched it as an ETF, you get all the benefits of the ETF by its exposure, but because it’s diversified in the ETF, it’s a great way to hedge. Obviously, you’d need to short the ETF to do that, but it’s an option.”
Listen, if you haven’t been able to capitalize on a universe of compelling event-driven opportunities in US equities, then that’s your problem.
It’s certainly not the fault of Goldman’s John Marshall and Katherine Fogertey.
Someone besides tech needs to start making some goddamn money.
It’s getting dicey out there…
“The important thing is to know what you are invested in and be comfortable with it, so any further volatility doesn’t stress you out, or worse, freak you out and trigger a bout of panic selling.”
“Do you see what happens?!”…
Listen, there are people asking if growth stocks are in a bubble. And the thing is, the answer is “yes.” Unless of course you define “bubble” in dot-com/tulip mania terms.
“Woe betide any fund manager who switched into Value stocks at the first sign of volatility back then.”
