Change

We saw a big change today in that Italian 10 year bond yields blew out to a near record and the stock market did not blink. Is this sustainable in the long term? No. But there is no reason the market cannot cause harm to all the under invested, underperforming managers out there until New Years. For now, I am willing to play along but I would feel much better about being long if the ECB would deal with the issues. Have a good night.

3 comments:

Anonymous said...

Hi Tsachy, I've been hearing about all the under invested and underperforming managers for 3 months now. Someone on CNBC is always talking about it. Do you think they are going to wait till the last week of the trading year, which is only 4 days, to get invested? Wouldn't they already have already done so by now...or liquidated and called it a bad, underperforming year?

Tsachy Mishal said...

I was just saying that a move higher would hurt the most people right now. Not that it's a reason to buy. But most market participants cannot take much pain. Believe me, if we keep going higher many managers will eventually capitulate and buy.

Tsachy Mishal said...

At this time of year a lack of selling might be enough. Underinvested managers are a lot less likely to sell. Generally, one is better off when the crowd is underinvested versus when they are fully invested.