Tuesday, 9 August 2011

quick notes again...

  1. August markets are thin. Any selling or buying can push markets to extremes far more easily.
  2. People have spent a lot of time talking about valuations, imho they really aren't that important, or supportive on the macro level.
  3. Profit margins are fat and inflated, probably meaning profits are 10-20% above their long term average.
  4. Reflexivity is going to bite, there is a big demand shock.
  5. Asia has a LOT of froth and bubble in it, there has been serious over investment.
  6. Government debt levels, demographics, etc are a long term headwind.

I'm not ready to run out and join the rioters and call for the end of civilized society, but it does look awfully gloomy, and that has been rapidly priced in. I've made some pretty decent money out of the move, calling how much further there is to go is a lot more difficult.

Monkey's pick bottoms. Its a lot easier to buy when its going back up than to catch a falling knife, etc, etc. cliches abound...

1 comment:

  1. What about picking tops? Gilt futures look toppy and STIRS have gone into backwardisation.

    Can't be much downside shorting either of those?

    I'm on exile marketwise until September, then I'm back with my new cityindex account which gives me options for the first time.

    Could be interesting, well done catching the move, bloody well wish I had.