True statement. The risk on th_老虎社区_美港股上老虎

2021-06-11

True statement. The risk on the unexpected

Opinion: Stock investors now have come to a cliff in the road — and options are limited<blockquote>观点：股票投资者现在已经走到了悬崖边——选择有限</blockquote>

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The risk on the unexpected","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/188336017","repostId":1198311684,"repostType":4,"repost":{"id":"1198311684","kind":"news","pubTimestamp":1623415805,"share":"https://www.laohunote.com/m/news/1198311684?lang=zh_CN&edition=full","pubTime":"2021-06-11 20:50","market":"us","language":"en","title":"Opinion: Stock investors now have come to a cliff in the road — and options are limited<blockquote>观点：股票投资者现在已经走到了悬崖边——选择有限</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1198311684","media":"MarketWatch","summary":"Fundamental things haven’t applied to the U.S. market but that seems about to change.\n\nThe coronavir","content":" Fundamental things haven’t applied to the U.S. market but that seems about to change. The coronavirus pandemic has been excellent for investors, but most now realize that the stock market’s extraordinary performance is not based on fundamentals, which ceased to matter some time ago.<blockquote>基本面尚未适用于美国市场，但这种情况似乎即将改变。冠状病毒大流行对投资者来说是极好的，但现在大多数人都意识到，股市的非凡表现并不是基于基本面，而基本面在一段时间前就已经不再重要了。</blockquote> Central banks have been driving asset prices with massive liquidity infusions and zero interest rates. Consumption and corporate earnings are underpinned by large government transfer payments, fiscal stimulus and industry support.<blockquote>央行一直在通过大量注入流动性和零利率来推高资产价格。消费和企业盈利是由巨额政府转移支付、财政刺激和行业支持支撑的。</blockquote> Will it last? The consensus is that most assets are overpriced. Prices ultimately are the present value of future cash flows. Authorities have manipulated the discount rate but altering underlying long-term cash flows, which are driven by the real economy, is more difficult. Low volatility, engineered by central banks, also encourages exuberant prices. At some stage, profligate government deficits may be reigned by either winding back spending or increasing taxes. These policies may also drive inflation, requiring tighter monetary policy and higher rates.&nbsp;<blockquote>会持续吗？人们普遍认为，大多数资产定价过高。价格最终是未来现金流的现值。当局操纵了贴现率，但改变由实体经济驱动的潜在长期现金流更加困难。由央行设计的低波动性也鼓励了旺盛的价格。在某个阶段，挥霍无度的政府赤字可能会通过缩减支出或增加税收来控制。这些政策也可能推高通货膨胀，需要收紧货币政策和提高利率。</blockquote> Currently high stock prices expose investors to the risk of a sudden correction, when the game of musical chairs stops unexpectedly. Given that almost all of the gains have been in price rather than income (dividends, interest, etc.), the vulnerability is exacerbated. The unstable structure of the financial system — high leverage, shadow banks, illiquidity, unresolved linkages, the rise in trend following investors — means that any problem may trigger a major adjustment.<blockquote>当前的高股价使投资者面临突然调整的风险，即音乐椅游戏意外停止。鉴于几乎所有的收益都是价格而不是收入（股息、利息等）。），脆弱性加剧。金融体系的不稳定结构——高杠杆、影子银行、流动性不足、未解决的联系、跟随投资者的趋势上升——意味着任何问题都可能引发重大调整。</blockquote> Investors’ options are limited. You could believe in the permanency of a “new normal.” Risky asset investments are then justified on the basis that authorities must ensure high- and rising asset prices, primarily as the alternative is too awful to contemplate. This assumes that policy options remain unconstrained indefinitely.<blockquote>投资者的选择有限。你可以相信 “新常态 ”的永久性。然后，高风险资产投资是合理的，因为当局必须确保资产价格高企且不断上涨，主要是因为替代方案太可怕了，难以想象。这假设策略选项无限期地保持无限制。</blockquote> Or investors can rely on momentum, essentially Keynes’ so-called beauty contest theory of investing, which anticipated today’s “meme stocks.” Successful investment requires investors to select the most popular faces among all judges, rather than those they may personally find the most attractive. The difficulty is knowing the judge’s mind and recognizing when to sell before the music stops.<blockquote>或者，投资者可以依靠势头，本质上是凯恩斯所谓的投资选美理论，该理论预测了今天的 “迷因股票 ”。成功的投资需要投资者在所有评委中挑选出最受欢迎的面孔，而不是那些他们个人可能觉得最有吸引力的面孔。难点在于了解评委的想法，并在音乐停止前认清何时出售。</blockquote> Third, investors can park their money in cash. This means accepting exceptionally low returns perhaps for a prolonged period and, worst of all, missing out on further gains.<blockquote>第三，投资者可以将资金存放在现金中。这意味着可能在很长一段时间内接受异常低的回报，最糟糕的是，错过进一步的收益。</blockquote> An alternative is to reposition defensively into assets or businesses with reliable income streams operating in essential industries or selling staples. These traditional “widows and orphans” investments are more difficult to find today. “Safe” government bonds now offer little income but high risk. Stock and property prices are highly correlated, reflecting investor behavior as well as the common reliance on leverage. More liquid and better-quality assets frequently come under selling pressure when leveraged investors need to raise cash. Today, just as a rising tide lifts all boats, a receding surge leaves everyone stranded.<blockquote>另一种选择是防御性地重新定位到具有可靠收入来源的资产或业务中，这些资产或业务从事基本行业或销售主食。如今，这些传统的 “寡妇和孤儿 ”投资更难找到。“安全 ”的政府债券现在收益低，但风险高。股票和房地产价格高度相关，反映了投资者的行为以及对杠杆的普遍依赖。当杠杆投资者需要筹集现金时，流动性更强、质量更好的资产经常会面临抛售压力。今天，正如涨潮抬起所有的船只一样，退潮让每个人都搁浅了。</blockquote> Fourth, investors can seek to benefit from higher inflation, switching to stocks that benefit from increasing prices. But the impact on equity prices will depend on whether it is profit inflation (that is, end-product prices rise) or cost inflation, including increases in wages. If it is the latter, then the squeeze on earnings may adversely affect equity valuations. Combined with higher rates, this may adversely affect stocks. Another alternative is inflation-linked securities, such as Treasury inflation-protected securities (TIPS) &nbsp;TIP,+0.52%&nbsp;or commodities.&nbsp;<blockquote>第四，投资者可以寻求从更高的通胀中获益，转向受益于价格上涨的股票。但对股票价格的影响将取决于是利润通胀（即最终产品价格上涨）还是成本通胀，包括工资上涨。如果是后者，那么盈利的挤压可能会对股票估值产生不利影响。再加上较高的利率，这可能会对股票产生不利影响。另一种选择是与通胀挂钩的证券，例如国债通胀保值证券 (TIPS) TIP,+0.52% 或大宗商品。</blockquote> Fifth, investors could go “off-piste,” believing that existing policies are unsustainable and the economic system is irredeemable broken. This favors crypto-currencies, precious metals or collectibles — non-traditional assets whose supply is naturally constrained. The ability of the state to confiscate, tax and regulate, as well as reliance on courts to enforce rights, complicates this quest for freedom.<blockquote>第五，投资者可能会 “偏离轨道”，认为现有政策不可持续，经济体系已经无可挽回地崩溃。这有利于加密货币、贵金属或收藏品——这些非传统资产的供应自然受到限制。国家没收、征税和监管的能力，以及对法院执行权利的依赖，使这种对自由的追求变得复杂。</blockquote> The ultra-rich and some high-net worth individuals have gone off-grid already by moving into private markets. Concerned about manipulated and gamified markets, they focus now on non-listed real businesses and assets as well as private debt, sacrificing liquidity and transparency for better economics, privacy and control. Unfortunately, these options are limited for ordinary individuals — a different form of inequality.<blockquote>超级富豪和一些高净值人士已经通过进入私人市场而脱离了电网。由于担心被操纵和游戏化的市场，他们现在专注于非上市的真实企业和资产以及私人债务，为了更好的经济、隐私和控制而牺牲流动性和透明度。不幸的是，这些选择对普通人来说是有限的——这是一种不同形式的不平等。</blockquote> Investors therefore face Hobson’s illusory choice, where only one thing is actually offered. They can lose by betting against price rises or that prices keep rising.&nbsp;<blockquote>因此，投资者面临的是霍布森的虚幻选择，实际上只提供了一件事。他们可能会因押注价格上涨或价格持续上涨而失败。</blockquote> Policymakers, meanwhile, continue to compound decades of mistakes. They must now keep increasing debt and maintaining low rates in order to keep asset prices high. Government deficits are essential to maintaining economic activity. Kicking the can down the road is the only way to ensure that the day of reckoning is deferred — NIMTO (not in my term of office). This forces investors to go out further on the risk curve to generate returns.&nbsp;<blockquote>与此同时，政策制定者继续加剧几十年来的错误。他们现在必须继续增加债务并维持低利率，以保持资产价格高企。政府赤字对于维持经济活动至关重要。把罐子踢到路上是确保清算日推迟的唯一方法——NIMTO（不是在我的任期内）。这迫使投资者在风险曲线上走得更远以产生回报。</blockquote> Perhaps investors nowadays should stick to comedian Will Rogers’s famous investment advice: “Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.”<blockquote>也许现在的投资者应该遵循喜剧演员威尔-罗杰斯（Will Rogers）的著名投资建议： “不要赌博；拿出你所有的积蓄，买一些好股票，持有到股价上涨，然后卖出。如果股价不涨，就不要买”。</blockquote>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Opinion: Stock investors now have come to a cliff in the road — and options are limited<blockquote>观点：股票投资者现在已经走到了悬崖边——选择有限</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOpinion: Stock investors now have come to a cliff in the road — and options are limited<blockquote>观点：股票投资者现在已经走到了悬崖边——选择有限</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nMarketWatch2021-06-11 20:50\n\n</h4>\n</header>\n<article>\n Fundamental things haven’t applied to the U.S. market but that seems about to change. The coronavirus pandemic has been excellent for investors, but most now realize that the stock market’s extraordinary performance is not based on fundamentals, which ceased to matter some time ago.<blockquote>基本面尚未适用于美国市场，但这种情况似乎即将改变。冠状病毒大流行对投资者来说是极好的，但现在大多数人都意识到，股市的非凡表现并不是基于基本面，而基本面在一段时间前就已经不再重要了。</blockquote> Central banks have been driving asset prices with massive liquidity infusions and zero interest rates. Consumption and corporate earnings are underpinned by large government transfer payments, fiscal stimulus and industry support.<blockquote>央行一直在通过大量注入流动性和零利率来推高资产价格。消费和企业盈利是由巨额政府转移支付、财政刺激和行业支持支撑的。</blockquote> Will it last? The consensus is that most assets are overpriced. Prices ultimately are the present value of future cash flows. Authorities have manipulated the discount rate but altering underlying long-term cash flows, which are driven by the real economy, is more difficult. Low volatility, engineered by central banks, also encourages exuberant prices. At some stage, profligate government deficits may be reigned by either winding back spending or increasing taxes. These policies may also drive inflation, requiring tighter monetary policy and higher rates.&nbsp;<blockquote>会持续吗？人们普遍认为，大多数资产定价过高。价格最终是未来现金流的现值。当局操纵了贴现率，但改变由实体经济驱动的潜在长期现金流更加困难。由央行设计的低波动性也鼓励了旺盛的价格。在某个阶段，挥霍无度的政府赤字可能会通过缩减支出或增加税收来控制。这些政策也可能推高通货膨胀，需要收紧货币政策和提高利率。</blockquote> Currently high stock prices expose investors to the risk of a sudden correction, when the game of musical chairs stops unexpectedly. Given that almost all of the gains have been in price rather than income (dividends, interest, etc.), the vulnerability is exacerbated. The unstable structure of the financial system — high leverage, shadow banks, illiquidity, unresolved linkages, the rise in trend following investors — means that any problem may trigger a major adjustment.<blockquote>当前的高股价使投资者面临突然调整的风险，即音乐椅游戏意外停止。鉴于几乎所有的收益都是价格而不是收入（股息、利息等）。），脆弱性加剧。金融体系的不稳定结构——高杠杆、影子银行、流动性不足、未解决的联系、跟随投资者的趋势上升——意味着任何问题都可能引发重大调整。</blockquote> Investors’ options are limited. You could believe in the permanency of a “new normal.” Risky asset investments are then justified on the basis that authorities must ensure high- and rising asset prices, primarily as the alternative is too awful to contemplate. This assumes that policy options remain unconstrained indefinitely.<blockquote>投资者的选择有限。你可以相信 “新常态 ”的永久性。然后，高风险资产投资是合理的，因为当局必须确保资产价格高企且不断上涨，主要是因为替代方案太可怕了，难以想象。这假设策略选项无限期地保持无限制。</blockquote> Or investors can rely on momentum, essentially Keynes’ so-called beauty contest theory of investing, which anticipated today’s “meme stocks.” Successful investment requires investors to select the most popular faces among all judges, rather than those they may personally find the most attractive. The difficulty is knowing the judge’s mind and recognizing when to sell before the music stops.<blockquote>或者，投资者可以依靠势头，本质上是凯恩斯所谓的投资选美理论，该理论预测了今天的 “迷因股票 ”。成功的投资需要投资者在所有评委中挑选出最受欢迎的面孔，而不是那些他们个人可能觉得最有吸引力的面孔。难点在于了解评委的想法，并在音乐停止前认清何时出售。</blockquote> Third, investors can park their money in cash. This means accepting exceptionally low returns perhaps for a prolonged period and, worst of all, missing out on further gains.<blockquote>第三，投资者可以将资金存放在现金中。这意味着可能在很长一段时间内接受异常低的回报，最糟糕的是，错过进一步的收益。</blockquote> An alternative is to reposition defensively into assets or businesses with reliable income streams operating in essential industries or selling staples. These traditional “widows and orphans” investments are more difficult to find today. “Safe” government bonds now offer little income but high risk. Stock and property prices are highly correlated, reflecting investor behavior as well as the common reliance on leverage. More liquid and better-quality assets frequently come under selling pressure when leveraged investors need to raise cash. Today, just as a rising tide lifts all boats, a receding surge leaves everyone stranded.<blockquote>另一种选择是防御性地重新定位到具有可靠收入来源的资产或业务中，这些资产或业务从事基本行业或销售主食。如今，这些传统的 “寡妇和孤儿 ”投资更难找到。“安全 ”的政府债券现在收益低，但风险高。股票和房地产价格高度相关，反映了投资者的行为以及对杠杆的普遍依赖。当杠杆投资者需要筹集现金时，流动性更强、质量更好的资产经常会面临抛售压力。今天，正如涨潮抬起所有的船只一样，退潮让每个人都搁浅了。</blockquote> Fourth, investors can seek to benefit from higher inflation, switching to stocks that benefit from increasing prices. But the impact on equity prices will depend on whether it is profit inflation (that is, end-product prices rise) or cost inflation, including increases in wages. If it is the latter, then the squeeze on earnings may adversely affect equity valuations. Combined with higher rates, this may adversely affect stocks. Another alternative is inflation-linked securities, such as Treasury inflation-protected securities (TIPS) &nbsp;TIP,+0.52%&nbsp;or commodities.&nbsp;<blockquote>第四，投资者可以寻求从更高的通胀中获益，转向受益于价格上涨的股票。但对股票价格的影响将取决于是利润通胀（即最终产品价格上涨）还是成本通胀，包括工资上涨。如果是后者，那么盈利的挤压可能会对股票估值产生不利影响。再加上较高的利率，这可能会对股票产生不利影响。另一种选择是与通胀挂钩的证券，例如国债通胀保值证券 (TIPS) TIP,+0.52% 或大宗商品。</blockquote> Fifth, investors could go “off-piste,” believing that existing policies are unsustainable and the economic system is irredeemable broken. This favors crypto-currencies, precious metals or collectibles — non-traditional assets whose supply is naturally constrained. The ability of the state to confiscate, tax and regulate, as well as reliance on courts to enforce rights, complicates this quest for freedom.<blockquote>第五，投资者可能会 “偏离轨道”，认为现有政策不可持续，经济体系已经无可挽回地崩溃。这有利于加密货币、贵金属或收藏品——这些非传统资产的供应自然受到限制。国家没收、征税和监管的能力，以及对法院执行权利的依赖，使这种对自由的追求变得复杂。</blockquote> The ultra-rich and some high-net worth individuals have gone off-grid already by moving into private markets. Concerned about manipulated and gamified markets, they focus now on non-listed real businesses and assets as well as private debt, sacrificing liquidity and transparency for better economics, privacy and control. Unfortunately, these options are limited for ordinary individuals — a different form of inequality.<blockquote>超级富豪和一些高净值人士已经通过进入私人市场而脱离了电网。由于担心被操纵和游戏化的市场，他们现在专注于非上市的真实企业和资产以及私人债务，为了更好的经济、隐私和控制而牺牲流动性和透明度。不幸的是，这些选择对普通人来说是有限的——这是一种不同形式的不平等。</blockquote> Investors therefore face Hobson’s illusory choice, where only one thing is actually offered. They can lose by betting against price rises or that prices keep rising.&nbsp;<blockquote>因此，投资者面临的是霍布森的虚幻选择，实际上只提供了一件事。他们可能会因押注价格上涨或价格持续上涨而失败。</blockquote> Policymakers, meanwhile, continue to compound decades of mistakes. They must now keep increasing debt and maintaining low rates in order to keep asset prices high. Government deficits are essential to maintaining economic activity. Kicking the can down the road is the only way to ensure that the day of reckoning is deferred — NIMTO (not in my term of office). This forces investors to go out further on the risk curve to generate returns.&nbsp;<blockquote>与此同时，政策制定者继续加剧几十年来的错误。他们现在必须继续增加债务并维持低利率，以保持资产价格高企。政府赤字对于维持经济活动至关重要。把罐子踢到路上是确保清算日推迟的唯一方法——NIMTO（不是在我的任期内）。这迫使投资者在风险曲线上走得更远以产生回报。</blockquote> Perhaps investors nowadays should stick to comedian Will Rogers’s famous investment advice: “Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.”<blockquote>也许现在的投资者应该遵循喜剧演员威尔-罗杰斯（Will Rogers）的著名投资建议： “不要赌博；拿出你所有的积蓄，买一些好股票，持有到股价上涨，然后卖出。如果股价不涨，就不要买”。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.marketwatch.com/story/stock-investors-now-have-come-to-a-cliff-in-the-road-and-options-are-limited-11623375733?mod=home-page\">MarketWatch</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index","SPY":"标普500ETF",".IXIC":"NASDAQ Composite"},"source_url":"https://www.marketwatch.com/story/stock-investors-now-have-come-to-a-cliff-in-the-road-and-options-are-limited-11623375733?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1198311684","content_text":"Fundamental things haven’t applied to the U.S. market but that seems about to change.\n\nThe coronavirus pandemic has been excellent for investors, but most now realize that the stock market’s extraordinary performance is not based on fundamentals, which ceased to matter some time ago.\nCentral banks have been driving asset prices with massive liquidity infusions and zero interest rates. Consumption and corporate earnings are underpinned by large government transfer payments, fiscal stimulus and industry support.\nWill it last? The consensus is that most assets are overpriced. Prices ultimately are the present value of future cash flows. Authorities have manipulated the discount rate but altering underlying long-term cash flows, which are driven by the real economy, is more difficult. Low volatility, engineered by central banks, also encourages exuberant prices. At some stage, profligate government deficits may be reigned by either winding back spending or increasing taxes. These policies may also drive inflation, requiring tighter monetary policy and higher rates. \nCurrently high stock prices expose investors to the risk of a sudden correction, when the game of musical chairs stops unexpectedly. Given that almost all of the gains have been in price rather than income (dividends, interest, etc.), the vulnerability is exacerbated. The unstable structure of the financial system — high leverage, shadow banks, illiquidity, unresolved linkages, the rise in trend following investors — means that any problem may trigger a major adjustment.\nInvestors’ options are limited. You could believe in the permanency of a “new normal.” Risky asset investments are then justified on the basis that authorities must ensure high- and rising asset prices, primarily as the alternative is too awful to contemplate. This assumes that policy options remain unconstrained indefinitely.\nOr investors can rely on momentum, essentially Keynes’ so-called beauty contest theory of investing, which anticipated today’s “meme stocks.” Successful investment requires investors to select the most popular faces among all judges, rather than those they may personally find the most attractive. The difficulty is knowing the judge’s mind and recognizing when to sell before the music stops.\nThird, investors can park their money in cash. This means accepting exceptionally low returns perhaps for a prolonged period and, worst of all, missing out on further gains.\nAn alternative is to reposition defensively into assets or businesses with reliable income streams operating in essential industries or selling staples. These traditional “widows and orphans” investments are more difficult to find today. “Safe” government bonds now offer little income but high risk. Stock and property prices are highly correlated, reflecting investor behavior as well as the common reliance on leverage. More liquid and better-quality assets frequently come under selling pressure when leveraged investors need to raise cash. Today, just as a rising tide lifts all boats, a receding surge leaves everyone stranded.\nFourth, investors can seek to benefit from higher inflation, switching to stocks that benefit from increasing prices. But the impact on equity prices will depend on whether it is profit inflation (that is, end-product prices rise) or cost inflation, including increases in wages. If it is the latter, then the squeeze on earnings may adversely affect equity valuations. Combined with higher rates, this may adversely affect stocks. Another alternative is inflation-linked securities, such as Treasury inflation-protected securities (TIPS)  TIP,+0.52% or commodities. \nFifth, investors could go “off-piste,” believing that existing policies are unsustainable and the economic system is irredeemable broken. This favors crypto-currencies, precious metals or collectibles — non-traditional assets whose supply is naturally constrained. The ability of the state to confiscate, tax and regulate, as well as reliance on courts to enforce rights, complicates this quest for freedom.\nThe ultra-rich and some high-net worth individuals have gone off-grid already by moving into private markets. Concerned about manipulated and gamified markets, they focus now on non-listed real businesses and assets as well as private debt, sacrificing liquidity and transparency for better economics, privacy and control. Unfortunately, these options are limited for ordinary individuals — a different form of inequality.\nInvestors therefore face Hobson’s illusory choice, where only one thing is actually offered. They can lose by betting against price rises or that prices keep rising. \nPolicymakers, meanwhile, continue to compound decades of mistakes. They must now keep increasing debt and maintaining low rates in order to keep asset prices high. Government deficits are essential to maintaining economic activity. Kicking the can down the road is the only way to ensure that the day of reckoning is deferred — NIMTO (not in my term of office). This forces investors to go out further on the risk curve to generate returns. \nPerhaps investors nowadays should stick to comedian Will Rogers’s famous investment advice: “Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.”","news_type":1,"symbols_score_info":{"SPY":0.9,".DJI":0.9,".SPX":0.9,".IXIC":0.9}},"isVote":1,"tweetType":1,"viewCount":392,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":36,"subscribersOnly":false,"subscribersOnlyAccessible":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/188336017"}