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How Bad Is Finance’s Cockroach Problem? We Are About to Find Out.
“The health of the equity market in the United States, it’s among the least healthy in my entire career,” Gundlach said. “The market is incredibly speculative and speculative markets always go to insanely high levels. It happens every time.”
/snip
“The next big crisis in the financial markets is going to be private credit,” he said. “It has the same trappings as subprime mortgage repackaging had back in 2006.”
/snip
“There’s only two prices for private credit — 100 or zero,” Gundlach said. “It looks like it’s safe because you could sell it any day, but it’s not safe because the price at which you sell will be gapping lower day after day after day.”
Take private loans to Renovo Home Partners. BlackRock Inc. just decided that the loans it made to the struggling home improvement company are worthless. About a month ago, it deemed the debt to be worth 100 cents on the dollar.
Karine Jean-Pierre, could not be reached for comment before this post was submitted for your attention to this matter. Thank you.
There's a growing part of me that's like "screw it, sell it all!" but then you're sitting in cash or munis for who-knows-how-long which isn't too bad, I guess. So I trim where I can and stay in quality DRIP stocks and a few MLPs since I'm not 100% ready to tread water.
Unlike Mike Burry in '07, I'm not courageous enough to then decide to bet it all on black and then bide my time.
There's a growing part of me that's like "screw it, sell it all!" but then you're sitting in cash or munis for who-knows-how-long which isn't too bad, I guess. So I trim where I can and stay in quality DRIP stocks and a few MLPs since I'm not 100% ready to tread water.
Unlike Mike Burry in '07, I'm not courageous enough to then decide to bet it all on black and then bide my time.
The part that is most disturbing is sitting in cash as the market goes up and you fear that every entry point ahead will be worse. So, you buy and the bottom drops out.
Which, I suppose is a good argument for finding a proper allocation. One where FOMO and loss aversion are balanced. I suspect that I am slightly above that point at the moment. I did reverse a trade that would have added 4% to my equity allocation a week ago, so that is a win.
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DFL/TLDR Karine Jean-Pierre, could not be reached for comment before this post was submitted for your attention to this matter. Thank you.
Unlike Mike Burry in '07, I'm not courageous enough to then decide to bet it all on black and then bide my time.
Which, I suppose is a good argument for finding a proper allocation. One where FOMO and loss aversion are balanced. I suspect that I am slightly above that point at the moment. I did reverse a trade that would have added 4% to my equity allocation a week ago, so that is a win.