Below are some of the most interesting things I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
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As Bob Elliott puts it, “Today’s equity market faces one of the biggest shifts in supply we have seen in some time.” And the figure in the chart below does not include Friday’s record SpaceX IPO.
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“In recent decades, the valuation conditions that encourage firms to take advantage of expensive valuations and issue voluminous amounts of their own stock have also led Berkshire Hathaway to increase its cash holdings one to two years prior,” notes Simon White.
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At the same time, as Owen Lamont writes, “The chamber of dispersion has been opened, the beast of volatility has awakened, and the season of chaos is at hand.”
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“Dispersion has been most pronounced within Tech, where the spread between the best/worst performing quintiles’ median stock is a whopping +120 [percentage points], the highest since Feb. 2000, which reached +130 [percentage points] ahead of the market peak of March 24, 2000,” writes Savita Subramanian.
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Finally, Jeff Currie reports, “The United States is cashing out its insurance policy in order to maintain the illusion of abundance… [But] the abundance illusion has not changed the underlying physics. It has simply compressed the timeline for when the physics reasserts itself.”
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