“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.
Gandalf. Need more Gandalf.
“As I struggle to find the words to communicate my thoughts, I worry they will be misconstrued. Yet I don’t know how else to say it – except to blurt it out. So at the risk of being labeled a fool, here it goes – it’s different this time.”
Or, put differently, how much would it take to break the spirit of market participants who have been conditioned, Pavlov style, to buy any dip no matter how small?
“If you’re holding cash”…
Then they went skiing.
End of story.
There are lingering questions.
…that was a 23-standard deviation event. I’m not sure what color swan that is – maybe psychedelic?
In that same kind of way where that festering hornets’ nest in your garage isn’t a problem anymore…
“I was up until the wee hours, checking my phone to see where VIX futures were trading.”
“The market’s addiction to low volatility may be even more severe than its addiction to low rates.”