Will Armageddon Come When Most Are Positioned For It?
Some excerpts from a recent Yahoo Finance article that takes a contrarian view of the markets:
The 10 year Treasury yield was more than 2 percentage points higher after Lehman Brothers filed for bankruptcy in September 2008. Are things really more scary out there today than they were 4 years ago? “Around the world, the single narrative of collapse has taken hold,” says Ed Dempsey, chief investment officer at Pension Partners. “Everyone is positioned for collapse.”
In a note to clients Tuesday, Stifel Nicolaus’ David Lutz writes ”asset allocators at major retail firms have their equity weighting the lowest in over 15 years - well below 2009 levels which was a big mistake.”
“I’m not saying that the event can’t happen or it won’t happen, I’m simply saying that bond investors are positioned as if it [the cataclysmic event] has already occurred, and therein lies the opportunity,” Dempsey says, painting a scenario that could see the S&P 500 finishing the year with a 30-40% gain.
