The Morning Meeting

  The experience of the last 12 months has to be seen as one of the most important policy changes of the last forty years. Change of this significance are to be compared with the abandoning of the Gold standard in the 1970's (hyperinflation) and the rise of the liberal order led by Reagan and Thatcher in the 1980's (disinflation). The current modus operandi is one of continuous financial repression, monetisation of debt and budgetary expansionism. It is characterised by the return of big governments. The valuation implication is one of extreme valuation, growing dispersion and increased volatility.  The key question now is whether we are going to see the end of the deflationary regime.   The Covid pandemic saw the greatest collapse of economic activity in modern history. It is now followed by what will likely be the greatest recovery on record. Those who had been used to moderate cycles are likely to be surprised by the destabilisation that is about to occur. Current...

  Quotes "When a measure becomes a target, it ceases to be a target" How do pandemics compare? Bubbles The danger of market timing Markets & Macro All about the money? Then we are getting closer to the end That said, cyclical rotation has given breadth to this rally New highs to be tested, correction in May-June, then retesting Stocks for the long run in one chart The shorts have capitulated. Contrarian indicator says time to look for shorts Volatility smile agree: we are reliving Nifty Fifty and Internet bubble conditions Growth stocks have peaked Nasdaq looks like a Head & Shoulder Takes a lot of money to move trillion dollar megacaps and a few pennies for microcaps Peak Nasdaq is clear To be fair, silliness had to stop While those chasing higher rewards must always remember they must be taking higher risks to do so When too much money chases too few things, prices rise But the higher the price, the lower the returns At these prices, do not expect markets to offer g...