Impressive, makes sense... actually your explanation clarifies why MARKETS MAKE NO SENSE ANYMORE...LOL... Loading up the truck on LONG DATED PUTS OF LEVERAGED ETFs Now... Lets rock this boat
Hi Russell. Just wanted to say thank you for this. I'm a retail investor (without a finance background!) and I have been struggling to understand many aspects of the market but especially the comparative lack of stress in equity indices and credit spreads having regard to the macro environment. Things seem narrative driven at the moment and it's very confusing. The 'why' has been a nagging question for me.
Thanks for sharing! It is a very interesting way of looking at things. Do you see the "flaws" in the clearing house model applying fairly equally across equities and credit? The Russian/Mexican cds case seems like a great example of markets failing to discount any event risk before hand, but I wonder about the SoftBank vs Nasdaq example and the lessons to be drawn. Post February 2021, a lot of the speculative darlings had a rough go of it (e.g. SaaS, SPACs, Goldman's index of unprofitable tech). If memory serves, about 40% of Nasdaq components were down 50%+ from 52 week highs at the beginning of January 2022, which is roughly in line with Softbank in terms of timing and scale. So in this case, is it fair to say that market risk was being more consistently reflected at the individual stock level but perhaps not the index level, which isn't necessarily a result of the clearing house approach to pricing risk?
HY market has a lot of exposure to energy stack that would actually benefit from high oil prices. These companies were starved of capital but are printing FCF now. ESG means they will starve from capital in the future too. So debt payments should not only be manageable but perhaps a good add to a HY fund now. Are you suggesting going short credit or equity here?
Fantastic presentation, Russell -- I can see the excitement in your demeanor come through. Agree with your points. Keep it up -- many of us will pay for this content!
Impressive, makes sense... actually your explanation clarifies why MARKETS MAKE NO SENSE ANYMORE...LOL... Loading up the truck on LONG DATED PUTS OF LEVERAGED ETFs Now... Lets rock this boat
Excellent observation.
excellent as always Russell
Hi Russell. Just wanted to say thank you for this. I'm a retail investor (without a finance background!) and I have been struggling to understand many aspects of the market but especially the comparative lack of stress in equity indices and credit spreads having regard to the macro environment. Things seem narrative driven at the moment and it's very confusing. The 'why' has been a nagging question for me.
Thanks for sharing! It is a very interesting way of looking at things. Do you see the "flaws" in the clearing house model applying fairly equally across equities and credit? The Russian/Mexican cds case seems like a great example of markets failing to discount any event risk before hand, but I wonder about the SoftBank vs Nasdaq example and the lessons to be drawn. Post February 2021, a lot of the speculative darlings had a rough go of it (e.g. SaaS, SPACs, Goldman's index of unprofitable tech). If memory serves, about 40% of Nasdaq components were down 50%+ from 52 week highs at the beginning of January 2022, which is roughly in line with Softbank in terms of timing and scale. So in this case, is it fair to say that market risk was being more consistently reflected at the individual stock level but perhaps not the index level, which isn't necessarily a result of the clearing house approach to pricing risk?
HY market has a lot of exposure to energy stack that would actually benefit from high oil prices. These companies were starved of capital but are printing FCF now. ESG means they will starve from capital in the future too. So debt payments should not only be manageable but perhaps a good add to a HY fund now. Are you suggesting going short credit or equity here?
Fantastic presentation, Russell -- I can see the excitement in your demeanor come through. Agree with your points. Keep it up -- many of us will pay for this content!