As the people who have followed my blog i don’t care if it’s a bubble or not.
I think like George Soros but have a bit less money….
When I see a bubble forming I rush in to buy, adding fuel to the fire
George Soros
I took this excerpt below in Italic from the report of Quest Partners a very good Quant fund from NYC that i follow since 2004.
Equities: The S&P 500:
· Had a ‘perfect year’ – the first time in its history that it was up every single month of the year.
· Had the longest ever stretch without a 3% correction (279 business days and counting).
· Had the longest ever stretch without a 5% correction (373 business days and counting).
Equity Volatility:
· The VIX index fell to its lowest level in history at 9.1%.
· Realized volatility (1-year monthly) on the S&P 500 fell to its lowest level in history at 3.9%.
· 18 of the 20 lowest ever readings of the VIX index were registered in 2017.
· The XIV ‘Short VIX’ ETF returned 187.6% for the year, its best return ever.
· The Sharpe ratio of short VIX and short EURVIX exceeded 5.0 and 10.0 respectively on a rolling 12-month, monthly compounding basis.
Fixed Income: The Merrill Lynch ‘MOVE’ Interest Rate Volatility Index fell to its lowest level in history.
Credit:
· The European High Yield credit spreads fell to their lowest levels in history (below 2%!!).
· The US Investment Grade credit spreads fell to the lowest level since 2007.
Foreign Exchange: Implied and Realized volatilities in foreign exchange fell close to their lowest levels reached in 2014 and 2007.
Commodities:
· Implied and realized volatility on Gold fell to its lowest level in history.
· Implied and Realized volatility on Crude Oil fell close to their lowest levels reached in 2014.
Crypto-currencies, Art, Watches etc.: As traditional asset classes were not perceived to deliver enough risk, investor attention turned to alternative investment vehicles:
· The size of the crypto-currency market ballooned to over $600 billion, an increase of over 10x during the year.
· Bitcoin returned 1,403.2%; Ethereum returned 8,761.6%; and Litecoin returned 5492.3%. Some other crypto-currencies did even better.
· Not to be left behind, hedge funds rushed into this new, fun asset class. More than 120 “cryptofunds” launched during the year for a total of at least 175 such funds managing over $3 billion, according to financial research firm, Autonomous Next.
· Leonardo Da Vinci’s “Salvatore Mundi” painting sold for $450 million, the highest ever price for a painting. The same painting sold for $10,000 in 2005.
· Paul Neuman’s 1968 Rolex Daytona sold for $17.75 million the highest ever price for a watch. The watch originally cost $200.
This is an extraordinary time in global financial markets. Nearly a decade of liquidity injections by Central Banks totaling over $11 trillion has created a surreal, risk-less environment where everything only goes up and every dip is an opportunity to buy more. Confidence in this regime continuing has never been greater.