Last year the stock market was flat, but tons of hedge fund managers got creamed, as many traditional strategies totally failed.
And the reason those strategies failed is that the correlation between various asset classes had risen to all-time highs, and when everything is moving the exact same way, it doesn’t matter how good you are at selecting stocks, or deciding between asset classes. It’s very frustrating.
We’ve instantly gone from one of the highest-ever correlation environments to one of the lowest.
This signals a big break in the level of market panic, and it also means the market could theoretically present lots of big, fat juicy pitches for investors to swing at (they still have to hit the ball, of course).