Euro Headlines Now Opportunity Creators

Quick post here but an important one…

One of the hardest parts about being a capital allocator is reconciling how asset classes are responding to headlines and acting accordingly.  The big error I see being made constantly (and I fall into this trap too sometimes) is confusing how the market “should” react versus how it is reacting or will react.

You can look at a guy like Bill Gross who’s basically blown his year (at Pimco Total Return) by mixing up the two.  The policy wonk in him said that Treasurys should zig while the manager in him ignored the fact that they were zagging – he’s 80% through the year with a plus 1% return versus a benchmark return of 4% – in Bondland that’s a major no-no.  Owing to his long-term track record and expertise, Gross will get a pass, but not many others could in the eyes of investors.

Turning to the stock market, we find ourselves at a moment where everyone needs a rally.  Most managers were under-performing going into the fall and the game of catch-up usually engenders a high-beta melt-up and a general Race for the Roses into year-end.  Last week many major indices and sectors snapped out of the three month downtrend, my friend Greg Harmon is calling it a Breakout Week.  This week the naysayers that watched with their hands folded may come in to add even more fuel.  This morning’s Merger Monday (three, count ’em three deals!) certainly won’t hurt.

And so now, these nasty, persistent headlines out of Europe are starting to serve as buying opportunities and not Risk Off fire drills.  The sellers are being cleaned up in the pre-market and stock players are looking at November with green lights and checkered flags in their lines of sight.

I’m not here to predict how long this will last.  We’ve made our beds here for client accounts with some heavy buying last Tuesday/Wednesday.  And now we shall see if seasonality and improving sentiment will keep those nasty headlines from turning into a rout.

Game on.

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. Immediate Edge Review 2020 commented on Sep 23

    … [Trackback]

    […] Read More here to that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]

  2. 스포츠토토 commented on Sep 25

    … [Trackback]

    […] Read More here to that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]

  3. double your bitcoins review commented on Sep 30

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]

  4. Eric Arnoux commented on Oct 09

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]

  5. cum se trateaza commented on Oct 30

    … [Trackback]

    […] Read More Information here to that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]

  6. digital transformation commented on Nov 18

    … [Trackback]

    […] There you will find 93926 more Info to that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]

  7. buy dumps online commented on Dec 09

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]

  8. tangerine bank canada sign in commented on Jan 22

    … [Trackback]

    […] Here you will find 43819 more Information on that Topic: thereformedbroker.com/2011/10/24/euro-headlines-now-opportunity-creators/ […]