Quote:
Originally Posted by lewdog
Yup.
I’m not caring one bit about this. Won’t if it corrects 10% either. The past 2 years of gains were record pace. It wasn’t going to keep up.
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I don't normally follow this thread but my profession is investing and this is 100% the right perspective. It doesn't mean you shouldn't worry about the move the last several days but you should also have the bigger picture in mind. We're basically back to early December levels.
There were any number of positioning metrics flashing 'euphoria' on a scale that we haven't seen post-crisis. Macro themes (long equities, long EM, short rates, short USD) have been dominating the trading environment and trending aggressively. All of these things rode the wave of sentiment up and now the same thing happens on the way down (you can blame a class of investors known as CTAs for amplifying these moves). This is how markets have operated forever.
Equities may still end up performing just fine over the next several months, but more likely than not the risk/reward (Sharpe in industry parlance) will just be poorer. So be prepared to feel less euphoric and more balanced. But this is what ultimately makes for a healthier market.
Said another way, the experience of investing in stocks is transitioning from feeling like being a fan of the Patriots to being a fan of the Chiefs.
Good luck, folks.