Asymmetric Investment Returns is a blog authored by Mike Shell since 2006, covering topics about asymmetric investing and trading for asymmetric risk/reward in pursuit of asymmetry.
The stock market is a constant battle between buying pressure and selling pressure, and recently, that battle has shifted in a meaningful way. After a strong rally earlier in the year, we’ve now seen a notable change in the risk/reward asymmetry. Markets don’t move in a straight line, and shifts in trend strength often signal the potential for new opportunities—or new risks.
The global fixed-income landscape is at a key inflection point, with notable divergences emerging across major bond markets. While U.S. Treasury yields show signs of trend exhaustion, other developed market bonds are stabilizing at key technical levels. These shifts create asymmetric opportunities for tactical investors who focus on structuring trades with predefined downside risk and significant upside potential.
The latest report on the U.S. economy provides insights into the strength of the services sector and manufacturing activity amid ongoing tariff uncertainties. The ISM Services Index saw an uptick, while factory orders aligned with expectations, offering a mixed economic signal. Here’s what investors need to know.
Howard Marks has a unique ability to distill complex market dynamics into clear, actionable insights, and his latest memo, "On Bubble Watch," is no exception. It’s a powerful reminder of the importance of recognizing the telltale signs of a market bubble, the psychology driving it, and the necessary caution that comes with it.
Ray Dalio and Elon Musk see the U.S. debt problem for what it is: an unsustainable ticking time bomb. They aren’t just speculating—they’re using decades of experience in finance, economics, and business to sound the alarm.
Today, as we find ourselves in one of the tightest credit spread environments in decades, it's worth asking: Are investors underpricing risk, and does this present an asymmetric opportunity?