Rob Hanna is a Quant, which means that he makes his bones by formulating probabilities based on historical facts. He calls this market situation abnormal to history and recommends going easy on leverage to “stay in the game”, much like my “dividend paying cash is your friend” refrain.
Check it out.
This is a time when bear heroes would seek to replace those repugnant perma-bulls. But it’s not going to be that easy and speaking for one lowly participant, I am not at all sure this will resolve into a bear market. The reaction came from a ridiculous up-melting trend (and all that new, dumb money), which introduces the likes of ‘Nasdaq 2000’ and ‘silver 2011’ as models. But I am going to doggedly follow my macro indicators and in the meantime, if a quality Quant sees this as abnormal, who am I to argue?
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