More than half the S&P 500's total value is now in stocks priced above 10x sales. This was once considered an outlandish valuation, as it leaves little room for error. The list includes Nvidia, Apple, GOOG, MSFT, Broadcom, Tesla, Micron, Eli Lilly, AMD, Oracle and 57 more.
With the SPX at a TTM 28x earnings multiple, I can’t think of a better time to be overweight to truly diversifying alts - L/S equities, trend, reinsurance. I’d prefer to hold higher quality junk bonds for my “equity” exposure $FALN.
To all the value investors out there who have been crushed by the market the past decade...a friendly reminder that, at least historically, paying nose bleed valuations for a business typically doesn't deliver great expected returns.
cc @jvogs02 who authored this piece a long time ago
https://t.co/BZJmqT9rbE
@AndrewTWalker When you push an atheist to the ultimate end of their moral worldview, this is what you get. After all, we are just a chance collection of atoms floating in a purposeless universe. At least he’s honest.
"During both the largest gains and the largest losses for equities, [diversified, CTA] trend-following produced its best results. This positive convexity stems from the strategy’s ability to profit from strong trends in either direction."
https://t.co/aBKmQbWwxQ