I really love when a trader/investor is able to speak honestly about his/her mistakes. The best seem to be able to change course and adjust quickly.
I read a piece from Ned Davis recently where he reflected on the biggest mistake he made in the business. It was in the late 1990s and was tied to record high equity market valuations. He cut back on equity exposure too soon. He wasn’t alone.
In early 2000, Stan Druckenmiller went all in to technology – at the top of the great tech bubble top. One of his great mistakes. He was down more than 25% before he changed course, changed bets and ended the year higher. This to simply to point out, as you well know, how hard it is for even the very best among us to consistently get the market right all of the time. At every speech, he reminds investors how quickly he might change course. You’ll find a link to a recent video interview he did with CNBC’s Andrew Ross Sorkin below about the Fed, the ECB and why he feels this is all going to end badly.
What I believe is different today than in 1999 and 1968 (both prior secular bull market peaks) is that there is no speculative euphoria. Recall tech in 1999. Cab drivers making more money trading stocks on their handheld QuoTrek device. I spend a lot of time in taxis and I don’t see cabbies or Uber drivers on their iPhones trading stocks. Nor do I hear my friends bragging about their stocks. No euphoria. Nada. Not yet.
What is also different today is the behavior of the global central banks. Let’s take a look today at what the negative rates in Europe means for the U.S. dollar, for U.S. equities and the positioning effect it has in Europe and the balance of the developed world …. See the rest of the story in On My Radar: Poking At The Beehive
The current opinions and forecasts expressed herein are solely those of Steve Blumenthal and are subject to change. They do not represent the opinions of CMG. CMGs trading strategies are quantitative and may hold a position that at any given time does not reflect Steve’s forecasts. Steve’s opinions and forecasts may not actually come to pass. Information on this site should not be used as a recommendation to buy or sell any investment product or strategy.