“The sea was angry that day, my friends – like an old man trying to send back soup in a deli.”
– George Costanza
Today’s market is different than some of the past sharp drawdowns in the last 12-18 months.
* The drop is broad and deep — with other asset classes like gold and bitcoin joining the downside.
* There is no single catalyst like Leopold (Situational Awareness hedge fund liquidation) to blame on the market’s selloff.
* The weakness in financials over the last several months is now accelerating, with no respite whatsever.
* The decline in over stretched stocks is breathtaking — especially the over conceptualized AI stocks on the periphery (e.g. $GEV -$105 to $820). Look at the breakdown in $CAT’s chart (-$45 and down from $950 to $695 in a straight line).
* We are witnessing a classical (but violent) rotation. See the remarkable strength in staples and healthcare.
* A sign of flight to quality/safety seen in a pronounced rise in bond prices (and in lower bond yields). ($TLT +$1.20 today)
Doug Kass is a world-renowned hedge fund manager with decades of experience and success navigating through some of the most turbulent periods in market history. He is known for his time-tested analytical skills and ability to look past the current noise and herd mentality.
On TheStreet Pro, Kass provides frequent market commentary and investing ideas for active investors throughout each trading day in Doug’s Daily Diary. He also serves as president of Seabreeze Partners Management Inc. Previously, he served as a senior manager at Omega Advisors, a $6 billion investment partnership. He co-authored a book with Ralph Nader and the Center for the Study of Responsive Law called “Citibank: The Ralph Nader Report” and can be found as a guest host on CNBC's "Squawk Box."
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