The 60% Rally In Perspective | zero hedge.
The stats in the this post clearly show that this rally isn't as well supported by fundamentals as past rallies have been. The bond market appears to agree as pricing in that market seems to indicate much less enthusiasm for the strength of the economic recovery.
Investors, particularly equity, can be irrational for much longer than a rational investor would expect. Hence, hedging equity exposure rather than moving to all cash could make sense. Eventually, fundamentals will catch up with prices, which I believe, means prices will need to correct. Yet, given past irrationality, one can't forecast with any precision, when that will happen. I still have a target of 950 on the S&P 500 (roughly a 16% correction from current levels). I can't say when it'll happen however, as reasonably good news seems to continue to feed the monster. Let's see what the Christmas retail shopping season delivers.
The stats in the this post clearly show that this rally isn't as well supported by fundamentals as past rallies have been. The bond market appears to agree as pricing in that market seems to indicate much less enthusiasm for the strength of the economic recovery.
Investors, particularly equity, can be irrational for much longer than a rational investor would expect. Hence, hedging equity exposure rather than moving to all cash could make sense. Eventually, fundamentals will catch up with prices, which I believe, means prices will need to correct. Yet, given past irrationality, one can't forecast with any precision, when that will happen. I still have a target of 950 on the S&P 500 (roughly a 16% correction from current levels). I can't say when it'll happen however, as reasonably good news seems to continue to feed the monster. Let's see what the Christmas retail shopping season delivers.
