Hedge Fund CIO To Michelle Obama: 22x Trailing Earnings Is What Hope Really Feels Like
By Tyler Durden
In his characteristic third-person style, One River Asset Management’s Chief Investment Officer Eric Peters takes on all-comers in his latest letter to investors; lamenting the rapidity of losses, juxtaposing Michelle Obama’s “hopeless” America with the US equity markets’ near-record “hope”, and denouncing the scourge of risk managers everywhere – central bankers…
Hope all goes well…
“No one has real risk on,” said the CIO, dizzy. “We’ve all been through the laundromat.” Equity long/short managers owned all the wrong stocks. And held the wrong shorts.
“We got tumbled.” But they’re not selling their darlings like Facebook, Google, and Amazon. In fact, they love those stocks even more at these prices. “The reflation names we were short we now want to buy.”
Financials, infrastructure, materials, etc. “So when you refuse to short your old longs, and want to be long your old shorts, what happens?” he asked, stumbling, peeling a static sock from his sweater. “Stocks go higher.”
Hopeless?
“Now we’re feeling what not having hope feels like,” lamented America’s First Lady to Oprah, as another hopeful stock picker paid 22-times trailing earnings for the S&P 500.
“America needs a grown-up in the White House who can say to you in times of crisis, ‘Hey it’s going to be ok, let’s look at the future, let’s look at all the things we’re building,” continued Michelle. Infrastructure stocks consolidated their explosive gains, now up 40% for the year.
“All of this is important for our kids to feel like their work isn’t in vain, that their lives aren’t in vain,” she said, deeply upset, unsettled, like so many. Investors across the planet scanned screens in vain for a cheap Trump trade. But there are none. Unless of course, you hold high hopes for a brighter economic future.
“Our founding fathers built the Electoral College to safeguard the American people from the dangers of a demagogue and to ensure that the presidency only goes to someone who is, to an eminent degree, endowed with the requisite qualifications,” explained Martin Sheen, leading an absurd celebrity video appeal to deny The Donald.
Hopeless liberals squealed in echo chambers, victorious deplorables scoffed on Breitbart, Trump tweeted, Putin chortled, and the mighty greenback ascended to 14yr highs.
“At this point fiscal policy is not obviously needed to provide stimulus to help us get back to full employment, but nevertheless, let me be careful that I am not trying to provide advice to the new administration or to Congress as to the appropriate policy stance,” warned Yellen timidly, hiking interest rates 25bps for the 2nd time in ten years. And bond yields soared. As investors set aside their near universal disgust for the state of American politics to refocus on their job description. Which is to make money.
Where did all the risk go?
“Investors have outsourced risk-management to central bankers,” he said, pacing at the pension plan. We were discussing the challenges thrust upon large institutions by today’s new investment paradigm. They had …read more
Source: Hedge Fund CIO To Michelle Obama: 22x Trailing Earnings Is What Hope Really Feels Like
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