We keep hearing about all the fear in the market, and the pundits incessantly ask whether this (this!) was finally capitulation. The premise seems to be that all fear is irrational, and that Cassandras should always be ignored.
Betting on a falling sky has rarely been a very good bet, but that doesn’t mean it’s always a bad trade. At some point the sky could fall. Extreme fear isn’t always irrational fear.
One guy on CNBC today said cleverly, “the world will only end once, and this isn’t it.” Clever line, but what if it is?
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