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FOMO or FOMU ahead?

Zdjęcie autora: Jarosław JamkaJarosław Jamka

Yesterday, the S&P500 reached a new all-time high (intra-day). Only a few points are missing to the new ATH according to closing prices.


Soft inflation + "soft Trump" + soft investor's positioning & sentiment + strong AI (stargate) + strong earnings = ATH


First things first …definitions:

FOMO – fear of missing out;

FOMU – fear of materially underperforming (benchmark).


The current correction was particularly bearish, and the current positioning and sentiment among investors does not indicate a strong overbought market.. therefore, further ATHs are all the more possible... especially if Trump "withdraws" from more aggressive policy announcements and moves closer to the Goldilocks scenario.


Figure 1 shows the last 4 corrections on the main US indices.

Figure 2 show returns since the election, Figure 3 the same returns after risk adjustment (realized returns / realized volatility).

Figure 4 shows the risk-adjusted returns after normalizing to the S&P500 (e.g., although Bitcoin is up almost 50% since the election, in terms of S&P500 volatility it only means +13.7%).







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