The piece excerpted at the end of this post is hilarious. Because what it implicitly says is that everyone is perfectly happy to pretend like they became a guru in 2009 right up until everything stops going up, at which point everyone will suddenly realize that there is indeed some utility in consulting folks who actually might know how to behave in a two-way market.


To be sure, there’s nothing particularly profound in what you’ll read below from FactSet, but it does underscore the fact (because that’s what it is: a fact) that everyone has been lulled to sleep by nearly a decade of policies that have served to ensure that risk assets only move in one direction – “arcane” concepts like price discovery be damned.

Of course as we noted earlier this week (see here), the problem is that the people who are piggybacking on that dynamic are now perpetuating it, creating a veritable perpetual motion machine that blurs the line between good decisions and decisions only turning out good by virtue of you and everybody who looks like you having made them.

Naturally, that should create opportunities for active management – and indeed, Wells Fargo argues that the active crowd is learning how to pick off the “dumb” money. But the true “turning of the tide” will come when things start moving in the “wrong” direction. That’s when it will become clear that expertise isn’t something the world no longer needs.

The only question will be whether, after years of being ostracized and summarily dismissed as irrelevant, the people who actually understand how to trade will still be willing to pick up the phones. And that’s assuming they still have jobs by the time the next correction actually rolls around.

More below…

Via FactSet

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