The consequences of fear
It’s not reasonable to expect finance professionals to turn into epidemiologists within a short period of time. Yet, this is precisely the challenge faced by every analyst in recent weeks. I will not feign competence.
It’s not reasonable to expect finance professionals to turn into epidemiologists within a short period of time. Yet, this is precisely the challenge faced by every analyst in recent weeks. I will not feign competence.
The past year has been as rewarding for investors as it has been confounding for analysts. While economic growth weakened to its slowest pace since the global financial crisis, both equity and fixed income markets performed well. Market valuations sent contradictory signals regarding the outlook. An observer who has not followed markets closely might wonder if equities and bond markets are dominated by separate sets of investors that rarely commingle.
Buy a cheap asset, watch it appreciate, and then sell it. What sounds like a simple and intriguing recipe for investment success is probably one of the most complicated to implement.