Excessive valuations and crazed speculative bets from inexperienced day merchants – is the present market a “real McCoy” bubble, as veteran cash supervisor and bubble professional Jeremy Grantham lately remarked?
No. Bubbles are characterised by euphoria, however that’s nowhere to be seen. Sure, the day merchants are doing “crazy stuff”, as Grantham put it, however most retail traders are cautious.
CautiousThere have been twice as many bears as bulls within the final two American Affiliation of Particular person Traders (AAII) weekly polls. This month’s Bank of America month-to-month fund supervisor survey suggests skilled traders stay cautious.
Equally, cash held in cash market funds hit document ranges in May and there have been “almost no outflows” but, as Deutsche Bank’s Binky Chadha commented in a latest notice. Sure, stocks look costly and markets prolonged, however sentiment is muted and there’s a mountain of cash on the sidelines – hardly attribute of a bubble.
