The bottom line (or at least from where I’m sitting), is this…
And so the debate continues.
Got all of that?
Again, please: “We’re not in Kansas anymore.”
“Instead of mindlessly staring at the VIX to get a sense of the market’s volatility worries, I have created a new index.”
Ok, but who eats messy food in a spotless white shirt?
“This seemingly counterintuitive result has a distinct ‘path-dependent’ flavor.”
“While there can be no denying that stock markets often take the escalator up and the elevator down, this generalization is far from a law of nature.”
“…which market sectors are going to be the more vulnerable than the others?”
“Waiting to inhale.”
“…volatility across various asset classes can be at times highly correlated and hence the extraordinary growth of short volatility strategies might create risks.”
The narrative in 2017 revolved around two things…
Handle with care.