Why This bull Market Will Run for Much longer than anyone can imagine

[SOL]

Chinese Hedge Fund Jumps 258% After Dumping Ray Dalio’s Strategy

Shanghai hedge fund manager Li Bei says she learned quickly that the low-volatility approach to investing behind the rise of Bridgewater Associates was doomed in China for a startup like hers.

Steady returns did little to draw investors used to short-term rewards, so she put in her own money, cranked up leverage and produced an industry-leading 258% gain last year.

Li is a pioneer in macro hedge fund management in China, where homegrown firms are taking on foreign giants that are struggling to adapt in an industry where even low-fee mutual funds generate sizable returns. While her Shanghai Banxia Investment Management Center only manages about 500 million yuan ($76 million), she says firms like hers are best placed to assess how China is driving the global economy.

“We truly feel that Chinese funds have an obvious advantage judging corporate profits and commodity prices,” Li, 37, said in a phone interview from Shanghai. “For us, these are good times to make money.”

Chinese macro hedge funds made an average 41% return in 2020, four times the global level, according to data from Shenzhen PaiPaiWang Investment & Management Co. and Eurekahedge. The more than triple gain of Li’s Banxia Stable Fund put her firm at the top of rankings for such funds in China.

The stellar year promises to save Li from wounds inflicted by an exodus of investors in 2019 when her 9% return -- still beating an 8.9% global average of peers, according to Eurekahedge -- was dwarfed by local mutual funds during a bull market. The setback forced her to rethink her initial strategy of emulating Ray Dalio’s Bridgewater, an approach that she says included diversifying to limit volatility and providing free research to attract institutional clients.

‘Doesn’t Work’

“The Bridgewater route doesn’t work in China,” Li said. Offering two complimentary research reports a month didn’t help bring new money, and big institutions also balked at her fund’s small size.

https://finance.yahoo.com/news/chinese- ... 00186.html


There are several trends one can walk away with if one reads the real message.

1) Most hedge funds are doomed as smaller and nimble players will continue to inflict painful wounds to the Traditional Hedge fund model
2) Long term value investing is dead. Value investors will need to focus on long plays that offer value but also are positioning themselves to deal with AI and most importantly the long term pattern should be great. However, one would be better of looking at the whole market instead of wasting time on value stocks only as the risk to reward for now is far greater with AI and High tech companies (biotech, fintech, and any other tech that is poised to offer a better experience to the consumer)
3) The trend is to make as much as you can as fast as you can even though the risk may be 10X higher. This is going to provide long term fuel for the bull market for there are literally millions of fools out there that will emulate this model. Eventually, every fund manager will be forced to take on a similar approach for fear of bitting the dust and that is when this bull will enter the super feeding frenzy stage and it will probably offer the first strong signal that a multi-month and possibly a Multi-year top is in. The ensuing correction will be strong and the market shed 70% from its all-time high. However, we are not at this stage yet.

[SOL]

Our GP Index is about to move to a new high. If it does it will make for interesting times. One possible high certain outcome is the so-called correction will be delayed and it will occur when people least expect it. Patience is a virtue, discipline is an acquired talent

[Yodean]

*****

I found the above chart interesting. As long as the borrowing and deficit spending continue, stock markets should continue to rise, over the long-term.

[SOL]

Did the creator of that chart come to the same conclusion or a different one? This bull market will run forever until Fiat ends, that is if one takes the ultra long term perspective

[AstuteShift]

Did the creator of that chart come to the same conclusion or a different one? This bull market will run forever until Fiat ends, that is if one takes the ultra long term perspective

I believe he said it will continue however he also believes the hyperinflation narrative so it’s rather amusing

It’s interesting tallying, experts, fear mongers and inflationistas, all talk but no bite.

No wonder it’s the most hated bull market of all time, the FED has these individuals and the masses by the balls. Sad part is the FED is literally giving the clues, saying inflation is transitory and also allowing the money velocity chart to be open

[SOL]

I believe he said it will continue however he also believes the hyperinflation narrative so it’s rather amusing

It’s interesting tallying, experts, fear mongers and inflationistas, all talk but no bite.

No wonder it’s the most hated bull market of all time, the FED has these individuals and the masses by the balls. Sad part is the FED is literally giving the clues, saying inflation is transitory and also allowing the money velocity chart to be open

The big players always provide clues for those willing to use common sense (which is no longer common). Plato's allegory of the cave is playing out in real-time

Hyperinflation is a myth and anyone believing it is using metrics that no longer apply. They might have been relevant once upon a time, but today old metrics are a recipe for loss

[Yodean]

Did the creator of that chart come to the same conclusion or a different one?

The creator of that chart came to the opposite conclusion - he thinks the current low Dow:Budget Deficit ratio supports a general equity market crash in the near future.

To my eyes, just looking at that chart alone, significant Dow corrections are often preceded by spikes in the Dow:Budget Deficit ratio.

[SOL]

Did the creator of that chart come to the same conclusion or a different one?

The creator of that chart came to the opposite conclusion - he thinks the current low Dow:Budget Deficit ratio supports a general equity market crash in the near future.

To my eyes, just looking at that chart alone, significant Dow corrections are often preceded by spikes in the Dow:Budget Deficit ratio.

Maybe in dreams, that hypothesis is valid. Ask him if he has heard of the velocity of money data the Fed openly publishes. It clearly reveals that hyperinflation is a myth

[AstuteShift]

I would be delighted for another opportunity!

Remember, the masses pain and misery is your gain.

[SOL]

I would be delighted for another opportunity!

Remember, the masses pain and misery is your gain.

Goldman’s gung-ho view on stocks comes amid growing expectations that the Federal Reserve will hike interest rates faster and more aggressively starting toward the end of next year. It sees the 10-year Treasury yield rising to 1.8% in 12 months, and expects both investment-grade and high-yield bond spreads to widen -- which the bank’s strategists say will make them unappealing to investors.

Equity allocations, already at an all-time high of 52%, are on the rise because cash yields are near zero and households own half of the $28 trillion of U.S. cash assets, the strategists wrote.

“Fixed-income alternatives to equities appear unattractive on an absolute and historical basis,” Goldman says.

Goldman expects companies to have $350 billion of net demand for stocks next year due to record buyback authorizations and strong merger-and-acquisition activity. Households and foreign investors will be net buyers of $300 billion, and mutual and pension funds will sell a net $400 billion, it said.

https://finance.yahoo.com/news/goldman- ... 57965.html

We spoke of the speculate or fry or die era. There is only one option and the masses are slowly seeing this, but as they are moving slowly, the market has a long way to run before tanking. When they buy this narrative a top will be in that will lead to the birth of a new bull. Nothing change, stupidity is in a super trend that looks like it will last forever

[Budge]

Did the creator of that chart come to the same conclusion or a different one?

The creator of that chart came to the opposite conclusion - he thinks the current low Dow:Budget Deficit ratio supports a general equity market crash in the near future.

To my eyes, just looking at that chart alone, significant Dow corrections are often preceded by spikes in the Dow:Budget Deficit ratio.

"The only function of economic forecasting is to make astrology look respectable." John Kenneth Galbraith

[Budge]

Goldman’s gung-ho view on stocks comes amid growing expectations that the Federal Reserve will hike interest rates faster and more aggressively starting toward the end of next year.

Fed will have no choice because Mr. Market is going to rip them a new one.

[AstuteShift]

The FED owns this market so if anything, this interest rate noise is all pre-planned in advance. I can’t see rates ever if ever hitting the 70-80s level, we have tech and birth of AI so negative rates is primarily the trend

They have the crowd in a constant state of agitation and they know the masses are ruled by emotions so it’s easy for them. Ellipsis Manual will show you some good examples of manipulation
tactics and behavioral engineering.


The crowd all thinks the FED lost control and this is how they want to be viewed. You can’t have everyone winning, it’s been like this since the dawn of time. Squashing peons is a favorite past time for them and this FED is hyper aggressive to destroy anyone in their way

[MarkD]

https://youtu.be/4Z0AszN2GhM

For anyone looking for some common sense regarding economics to complement Sol's words.

[AstuteShift]

https://youtu.be/4Z0AszN2GhM

For anyone looking for some common sense regarding economics to complement Sol's words.

This individual gets it