Reality
May 15, 2020
Equity prices definitely adjust based on real-time developments. And equities do become overvalued, disconnected from reality and vulnerable to significant corrections. But that happens when sentiment is at bullish extremes, when equity positioning is stretched and when financial conditions are tightening. Current conditions are exactly the opposite…sentiment is at bearish extremes, positing is extremely light and financial conditions have never been easier than they are today.
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