The latest GREED & Fear letter, from CLSA’s Chris Wood, is nicely titled The tedium of correlation, a reference to the neverending RISK ON/RISK OFF cycle, with all its predictable outcomes (stocks, Aussie dollars, junk bonds, oil, silver all moving in exact the same direction).
This chart is pretty revealing:
But it’s not just a matter of world markets behaving more similarly than any time since early 2007, even inter-Asia, there’s a big secular trend of growing similarity.
When will it end? Who knows, but in the meantime, that shrinking gap between the best and least performing groups is killing even the best investment managers.