In this week's Off the Cuff podcast, Chris and Brian discuss:
- The Sloshing Tsunami of Global Capital
- It's pushing prices around more than any other factor
- Concerning Correlations
- Markets are too correlated for their own safety right now
- The Wisdom of Playing it Safe
- At its most valuable when it's hardest to practices
- How The Next Market Break May Differ From 2008
- Not enough suckers left?
This week, Chris and Brian discuss how the recent volatility in world markets is mostly the result of huge waves of capital moving around the globe. Emerging markets looking weaker? Quick! Move your capital into US markets!! A strengthening Yen? Quick sell stocks!! Wait, Japan just announced it's going to print more? Borrow as many Yen as you can and start buying stocks again!!
Like a stampeding mastodon herd, global capital is lumbering about, changing direction at the whiff of any new threat or promise of safety. And in the midst of the chaos, fundamentals are getting trampled. All that matters at this point is if you're positioned where the herd is heading (prices go up) or is leaving (prices go down).
For the nimble AND lucky (or the insider who can influence the spooking of the herd), you can make some nice trading profits. For the remaining 99.9% of us, walking onto these plains right now is near-suicide.
by kugscheese