In Bizarre, Schizophrenic Note Morgan Stanley Compares Rally Chasers To "Cockroaches"
By Tyler Durden
Morgan Stanley’s Adam Parker double, quasi-metamorphosis from bear to full fledged bull (as of about two years ago), and then back to outright skeptic (as of a month ago), has been a sight to behold, or perhaps text to read. Two months ago he admitted that “Our Advice Has Been Horrendous”, blaming “Bizarro World”, and then one month ago he sink deeper into cognitive dissonance when he advised “When You Think Of Something, Do The Opposite.”
His latest report, in which he tries to justify his ongoing bearish stance (or maybe it’s bullish – we aren’t sure after reading the note below), is not only no less bizarre, it is downright schizophrenic as you can read below, because not only does he compare chasers of the current market rally to cockroaches, and says that “we are in “sell the rip,” not “buy the dip” mode for US equities” adding that “for now, we want to be cockroaches so we can survive, but we are only human”, and then completely loses it when saying “we don’t want to be cockroaches, even though that has been the right strategy year-to-date.“
Alas, we can not do full justice to his latest stream of consciousness, so here it is:
Cockroaches survive because they travel with the wind at their backs, not into the wind, reversing course when the wind changes directions so they don’t fight the elements. Their adaptability has enabled cockroaches to survive nuclear explosions and even function for long periods of time with their heads cut off. Most investors want to survive, but prefer to keep their heads on during the process. Certainly the investors who have done well this year have been acting like cockroaches, reversing course when the winds changed direction in mid-February. The fundamentals haven’t really changed that much, but prices certainly have. The cockroach mindset is admittedly tempting during sustained “gusts” like those the market has experienced over the last 7 weeks.
Then things get bizarre. Initially, Parker says that he refuses to be a cockroach, and that he has been bullish…
Try as we might, however, we just can’t be cockroaches: we remained bullish early in 2016, while markets sank, and we are increasingly cautious now, as markets have roared back to essentially all-time highs. Our natural disposition is always tilted towards anticipating (or at least trying to anticipate) wind shifts, rather than simply reacting to the change. It was certainly painful for us to remain bullish in January and into early February when the market continued to decline, as we were in essence crawling into the wind at that point. Obviously, we are now happy we stayed the course and remained positive, but there is no doubt that our heads almost blew off. But today, given the huge market rally, we can’t help but start wondering when we will get the next reversal, and when we should become more cautious again. …read more
Source: In Bizarre, Schizophrenic Note Morgan Stanley Compares Rally Chasers To "Cockroaches"
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