I am always delighted when other financial experts speak truth plainly and without a sales based agenda. Barry Ritholtz of Ritholtz Research and Analytics, NY, NY does this often and today he speaks volumes on the present market climate.
“Rational or Irrational? Efficient or Inefficient?
Those are questions that academics wrestle with, and individual investors need to come to terms with.
A classic example is what market action gets credited or blamed on. Yesterday's sell off was blamed on weak retail sales and Citibank's big loss and write down. (I have a quote in today's NYT article, Citigroup Loss Raises Anxiety Over Economy)
However, these events were well known by those people who were looking in the right places (like readers of this blog). So how were these events such a surprise as to cause a major dislocation?
It comes back to crowds getting the big picture wrong, and individuals identifying those instances. I call this Variant Perception and contrarian investing. Ironically, seeing the variant is relatively easy — the harder part is in the timing. That's what technicals and market internals are for.
Wait — Are you claiming that you are smarter than the markets?
No. What I am very specifically saying is that there are opportunities to be uncovered if you can identify where the crowd is wrong. It happens all the time.” Read more…
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Cory’s Chart Corner
Many will focus the blame of market drawdowns on the tariffs and ignore the fact the SP500 (only a few weeks ago) was trading at 4 std devs above its historical mean…valuation also matters.
The Kobeissi Letter @KobeissiLetterBREAKING: The European Union is preparing further counter measures against newly announced US tariffs of 20%, per CNBC.
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