Market volatility – Eric Peters: Systemic Risks are Mounting
De volatiliteit van de financiële markten is het grootste risico voor beleggers, maar biedt ook grote kansen. Kennis van de werking van Market volatility is daarom essentieel voor investeren op de beurs.
On this week’s MacroVoices podcast, host Erik Townsend interviews Zero Hedge regular contributor, Eric Peters, CIO of One River Asset Management who – having correctly predicted the recent record VIX spike (See “Why Eric Peters Is Betting All On A Volatility Eruption” from Jan 7)- discusses the latest explosion of volatility, and its implications for markets as the global economy exits what has become one of the longest business cycles in history and heads toward the next recession.
The discussion begins with what has been the most talked-about topic of the past month: the blowup of short-volatility products that had earned retail traders millions of dollars in profits during the expansion.
While pundits on CNBC have given investors the all-clear to buy the dip and get back in, believing that all the fiscal stimulus from the Trump tax plan will almost certainly drive asset prices higher again, Peters is much more circumspect: As growth slows and inflation creeps higher, Peters believes markets will anticipate the recession by dumping stocks and bonds lower before the next recession even begins.
And risk parity, which has been a reliable strategy for years, will quickly turn toxic, helping establish a negative feedback loop that will continue to drive bonds and stocks lower…
The problem with products like XIV, which make it possible for retail investors to place extremely risky bets on volatility in a manner that makes them extremely exposed to their own ignorance…