Friday, September 16, 2016

II Delivering Alpha Conference big shots go market negative

Some of the most active, successful, and influential investors at this week's conference were prone making exceptionally negative comments.  It was surprising and, as it is impossible to know if they somehow were talking their own books, a bit confusing.

Carl Icahn is definitely an aggressive equity investor at all times.  He intimidates companies that he invests in, and with his reputation can often incent management behavior in a way that he almost dictates.  While it is clear that he is still investing, he called these times "exceptionally dangerous".  His words were that whether it's one week or months away, there will be a noticeable correction.  Paul Singer sees a "huge bubble" in the bond market.  He thinks a significant repricing is inevitable and suggests that it could be calamitous for some.  He sees gold as a good investment.  Ray Dalio was highly cautious as well, seeing issues in the bond market, equity market, and commodity markets.  Dalio's view is understandable as when one part of the securities markets to some extent collapses, liquidity is affected broadly and impacts all markets.

The equity market is still performing reasonably well, but with much more volatility than in August. Things are heating up even as summer ends.  It's easy to suggest that the bond market is vulnerable. Staying the course is the main option, being wary of anything but short to medium term bonds and strongly capitalized stocks.  The coming months will be a time to look at any over allocations.


Anonymous kf said...

This is a time for caution, but when is that not the case. Too much negative talk by major investors could be self fulfilling in the short term.

12:38 PM  

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