This week: crash vs bear, clues in Chinese stocks, P/E vs CPI, profit outlook, sentiment vs allocations, futures positioning, energy vs tech, passive investing, dividends...
I don’t think investor sentiment and allocations have to be mutually exclusive, investor sentiment can be horrible but allocations to stocks can be high because many people have been caught off guard with low cash positions and mostly invested, the market reaction was so swift and drastic that many are just holding on to see if things improve long-term rather than take a permanent loss and figure out where to invest next with no guarantees that won’t be even worse.
Interesting take, thanks. Another aspect is that even though cash rates and bond yields are higher, they are still negative in real terms, and still relatively low in nominal terms, so aside from capital preservation there is not much of an impetus for investors to rotate into bonds/cash... especially when we have been trained to "buy the dip" and "hodl"
Thanks !
Great work!!!!
Agree
I don’t think investor sentiment and allocations have to be mutually exclusive, investor sentiment can be horrible but allocations to stocks can be high because many people have been caught off guard with low cash positions and mostly invested, the market reaction was so swift and drastic that many are just holding on to see if things improve long-term rather than take a permanent loss and figure out where to invest next with no guarantees that won’t be even worse.
Interesting take, thanks. Another aspect is that even though cash rates and bond yields are higher, they are still negative in real terms, and still relatively low in nominal terms, so aside from capital preservation there is not much of an impetus for investors to rotate into bonds/cash... especially when we have been trained to "buy the dip" and "hodl"
Cheers, Welcome! appreciate your kind words
thank you