Markets around the world are in a see-saw. It is not exactly clear what is driving what or who and to be fair no one really knows. The trading strategies have, therefore, moved to seeking beta.
Volatility Risks high
We are looking at huge cycles in coming months. These will be higher in magnitude and shorter in time frames making longer term commitments difficult.
Picking Survivors
Now long term is more about picking survivors than picking value. Unfortunately old world stalwarts are not always well suited for this. I am not even sure if company like GE will survive this in current form. But then GE is much better off, we are just debating the form!
Premium for alpha investing will increase
Longer term investors will seek increased premium as volatility increases and questions about company health become more aggressive. I would like markets to remain range bound at lower end of the range for at least 2 quarters. That might signal some hope of recovery. Current movements are too swift (time) and too strong ( changes are high between weeks). Possibly its just residual froth.
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