Just following up on my other post, I'm still bearish. Nothing has fundamentally improved – probably gotten worse and markets are down slightly from when I posted. Yes, markets will eventually make ATHs – they always do and yes, long term investing is in your favor (S&P compounded at a 10.9% CAGR in a 30 yr timeframe historically in a pretty tight range with positive skew. 10yr timeframe obviously has a lot more variance). But seriously, can all of us seriously buy for 30 yrs and hold? If you need liquidity at some point to buy a house, etc., manage your risks accordingly because you can also be down over a 2-5 yr period!
I still believe markets have a much higher probability of going lower than higher (probably greater than 3:1 odds) is because people are still net long and talking about buying the dip. Believe it or not, stock market is still insanely bullish! Do you even know how much inflows into equities we've had from retail and institutional buyers? HFs are still at 80-90% gross and net longs on a longer-term timeframe and we've had more inflows into equities since COVID than the previous 10 yrs combined! It's hard to say all of that will reverse, but there is plenty of room for asset prices to deflate still. When I see you guys posting about what else are we buying, it's delight to my ears because it's confirming that market participants aren't bearish enough.
To the folks who says I'm a nobody and I don't know anything. I probably know something you don't – did you even check asset price performance in a growth + inflation decelerating environment when Fed tightens? Please check that before commenting – and if you do comment, please provide insights and what your positioning and trades are. We are all trying to learn and provide insights here. If you can't help but only have emotional reactions, please understand investing is probably not for you and the market (including me) loves taking gains from you
There is a time to be bullish! I'm just saying that this is not the time and willing to hear opposing opinions that are helpful. I just talked to other equity managers and they're still in denial about Fed raising 4+ times – some have even said 2 – but I've listened and appreciate their positions better.
It's time to manage your risks. I commented that it was smart to go into cash, gold and TLT. All have been working to varying degrees. Do your own diligence.
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