It’s a good piece in pointing out to be aware that what you think you know may be more of a hindrance than a help. I remember in 87 how everyone sat around for months waiting for the Great Depression redux to strike after the monster stock crash . Took a long time to recognize the impact of “portfolio insurance” on equity markets and how distorted markets had become. But at the time it felt like the end of the world as we knew it. Didn’t turn out to be quite that bad, at least in the US.
For me, agenda has been fulfilled, appreciate the further details, and ‘overthinking’ has been a pitfall. Partly as I’ve transitioned from commodities more to indices and fx. The benefit for me was to see this period through the lens you presented, so thank you.
Well then it’s now worth it for me, so the thanks and appreciation goes to you.
And I wouldn’t say “pitfall” - I’ll take working with overthinking any day vs fixing under-thinking - i.e. filtering / channeling of ideas vs adding half a bag of old clumpy brown sugar to an otherwise empty cabinet
Yes...I would agree with your hypothesis and ‘some’ cause and effect. But why now? -to prove a point? -self reinforcement of a current position (options? @5090) -make inexplicit a current finding? (2024 election woes) -For the unenlightened could we (I) have a conclusion please?
None of those things- I think you’re overthinking. Simply presenting a differentiated or overlooked angle from consensus as per everything else I put out there - in this case, probably the biggest miss by consensus I/we’ve ever encountered. A lot of people have previously told me how this particular article had helped in their own individual ways, be it understanding the most violent SPX crash event itself, or using what’s prob the most widely known and personally relatable market event to point to for others to grasp that major dislocations between widely accepted consensus vs reality indeed exist (not only are markets inefficient, but so are approaches to them), or a very real life example of why one shouldn’t be intimidated by assumptions of “superior” institutional commentary that are extremely flimsy- whatever it may be, it opened up eyes and minds, and so I’m sharing here in case others too can benefit from it. Why now- as I mentioned, this could be published at any time and would be broadly relevant as consensus flaws are always present (even mass ones as this), but also right now being its anniversary of the great March’20 crash catalyst from the last super Tues to look back on.
Conclusion is to question and dig into something if the broad focus seems to be off- you may very well not be crazy & in a minority. If you want an election specific application, keep an eye on certain options expiries that may coincide with key dates (not just elect day, but DNC, RNC etc) and watch the activity, implied vol, open int changes etc that may begin to show signs of a powder keg of outsized positioning, knowing that in the last ‘20 election cycle, hedging for political risk had been taken very seriously / positioning was very crowded. And while it may/not result in a full out market blowup, you’ll at least be long aware and prepared for volatility and know why, while those others chase and potentially trade off false narratives and dislocate markets providing opportunity. However you want to extract takeaways (if any exist) is up to each individual. I have no other agenda than my usual attempt to present differentiated / overlooked / broaden horizons based on market observations
It’s a good piece in pointing out to be aware that what you think you know may be more of a hindrance than a help. I remember in 87 how everyone sat around for months waiting for the Great Depression redux to strike after the monster stock crash . Took a long time to recognize the impact of “portfolio insurance” on equity markets and how distorted markets had become. But at the time it felt like the end of the world as we knew it. Didn’t turn out to be quite that bad, at least in the US.
Great color! Thanks for sharing
Ha! Any day 😃
For me, agenda has been fulfilled, appreciate the further details, and ‘overthinking’ has been a pitfall. Partly as I’ve transitioned from commodities more to indices and fx. The benefit for me was to see this period through the lens you presented, so thank you.
Well then it’s now worth it for me, so the thanks and appreciation goes to you.
And I wouldn’t say “pitfall” - I’ll take working with overthinking any day vs fixing under-thinking - i.e. filtering / channeling of ideas vs adding half a bag of old clumpy brown sugar to an otherwise empty cabinet
Yes...I would agree with your hypothesis and ‘some’ cause and effect. But why now? -to prove a point? -self reinforcement of a current position (options? @5090) -make inexplicit a current finding? (2024 election woes) -For the unenlightened could we (I) have a conclusion please?
None of those things- I think you’re overthinking. Simply presenting a differentiated or overlooked angle from consensus as per everything else I put out there - in this case, probably the biggest miss by consensus I/we’ve ever encountered. A lot of people have previously told me how this particular article had helped in their own individual ways, be it understanding the most violent SPX crash event itself, or using what’s prob the most widely known and personally relatable market event to point to for others to grasp that major dislocations between widely accepted consensus vs reality indeed exist (not only are markets inefficient, but so are approaches to them), or a very real life example of why one shouldn’t be intimidated by assumptions of “superior” institutional commentary that are extremely flimsy- whatever it may be, it opened up eyes and minds, and so I’m sharing here in case others too can benefit from it. Why now- as I mentioned, this could be published at any time and would be broadly relevant as consensus flaws are always present (even mass ones as this), but also right now being its anniversary of the great March’20 crash catalyst from the last super Tues to look back on.
Conclusion is to question and dig into something if the broad focus seems to be off- you may very well not be crazy & in a minority. If you want an election specific application, keep an eye on certain options expiries that may coincide with key dates (not just elect day, but DNC, RNC etc) and watch the activity, implied vol, open int changes etc that may begin to show signs of a powder keg of outsized positioning, knowing that in the last ‘20 election cycle, hedging for political risk had been taken very seriously / positioning was very crowded. And while it may/not result in a full out market blowup, you’ll at least be long aware and prepared for volatility and know why, while those others chase and potentially trade off false narratives and dislocate markets providing opportunity. However you want to extract takeaways (if any exist) is up to each individual. I have no other agenda than my usual attempt to present differentiated / overlooked / broaden horizons based on market observations