The Media love financial crisis – it sells. The reality is the need to understand, plan, prepare, and don’t expect anything you expected to happen, happen. Enjoy. Sun comes up tomorrow.
Markets wobbled yesterday on the current litany of fear: interest rates, inflation and Ukraine. The bigger issues are just how unsustainable current equity valuations remain, and where to invest in range-bound markets.
Inflation across the West looks to be more entrenched than markets believed – Higher for Longer. Maybe it’s time to accept it’s going to take time to fix, and look elsewhere for returns.
An outbreak of market common sense? Weighing up uncertainty, growth, recession and why do we believe in conspiracy?
It’s a big week for inflation data, but markets have caught a dose of common sense as the reality of higher for longer interest rates settles in. The question of why the market believes overly frothy narratives is fascinating – understanding why is critical to bet against them.
Delighted to hand this morning’s Porridge to my colleague Julian Wheeler, who reminds us not to fight the Fed, making the argument against deep recession and for stock market upside. Markets are about differing views and perspectives – and despite my latent bearishness, I find myself in agreement with much of what Julian says.
I’ve no idea what might happen in 2023, but I don’t think its going to be as bad as some expect, but neither will it be as rewarding as others predict. Its likely to be another year of trading on what the mood is, what the numbers mean, and hoping to call it right. Hope, as they say, is only a strategy when you simply don’t know!
Risk does not disappear. It hides in plain sight – as the investment industry will increasingly discover as crises mounts. Fortunately, there are SOB’s who have seen it before and are too aged to panic…
Global Markets have nosedived – the UK’s confidence crisis is one trigger alongside rising recession risks, crashing consumer spending and host of indications we ain’t near done on higher interest rates as inflation becomes embedded into economies and dollar strength continues unabated.
Harry Hindsight is the greatest trader who ever lived. He saw the July/August rally was just a bear trap. But, he’s not revealing his thoughts on how much further the market has to correct. Some analysts see mean reversion all the way back to 2008 levels!
BP will use some of its windfall Ukraine Oil Spike profits to fund a stock buy-back. Stock buy-backs are appropriate is some limited circumstances, but generally they distort the way capitalism is supposed to work, undermining good companies and sound corporate governance.