We are starting to see that divergence from true profitable companies and dilutional, no product type companies.
This new environment is likely to keep the "bad" down while the good companies start running back up towards equilibrium.
This new environment is likely to keep the "bad" down while the good companies start running back up towards equilibrium.
Some assets once again just had blowout earnings and forecasting strong results in the future as per their guidance.
All newer players buying based on hype and beliefs will likely never see a new all time high in their so called assets.
All newer players buying based on hype and beliefs will likely never see a new all time high in their so called assets.
This is usually how these mega corrections end.
Correlation goes to 1 where everything correlates and sells off and once the bottom is in the correlation goes back towards 0, letting the great companies recover while the rest dies.
Correlation goes to 1 where everything correlates and sells off and once the bottom is in the correlation goes back towards 0, letting the great companies recover while the rest dies.
It is a constant reshuffling of the deck, where weak hands and bad risk managers panic out of their great assets while the newer traders/investors hold their bad assets into 0.
Never changed in 100+ years.
Never changed in 100+ years.
When the correlation hits 1, it indicates portfolio managers and traders are (or are getting) liquidated.
The whole portfolio is then sold which brings the correlation up.
Once all are out, the market is usually cleaned.
The whole portfolio is then sold which brings the correlation up.
Once all are out, the market is usually cleaned.
The only true markets that can keep it down then are:
The Bond market
The Credit market
The Bond market
The Credit market
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