QUOTE

“Investing is not about buying good things, but about buying things well – and if you don’t understand the difference, you shouldn’t be an investor.” –Howard Marks

Clearly, many operating in markets today don’t understand the difference which may be why we have seen a series of bubbles in recent years.

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In fact, equity valuations are inflated to such a degree that, as Paul Tudor Jones points out, “We could have a 30% correction in the stock market and just be back to slightly overvalued.”

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In spite of this, “Mom-and-pop investor sentiment has reached the highest level on record, surpassing what was seen during the meme-stock mania in 2021,” reports Bloomberg.

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However, the macro underpinnings that have enabled extreme equity valuations appear to be eroding. As Ian Harnett asks, “How long can policy uncertainty remain elevated and risk premia remain subdued?”

Perhaps true investors like Marks and Jones will get another opportunity to ‘buy things well’ in the not-too-distant future.