ASYMMETRY® Observations
ASYMMETRY® Observations are Mike Shell’s observations of all things asymmetry, asymmetric risk/reward, asymmetric payoffs, and asymmetric investment returns.
Original thinking on markets, risk, and asymmetric investing — delivered the moment it publishes.
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The technology sector is oversold and should trend up to retrace some of the recent downtrend
The technology sector is oversold and should trend up to retrace some of the recent downtrend. In the chart, we show the 14 day relative strength has reached an oversold…
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Why Size Doesn’t Guarantee Survival: Understanding the Lifecycle of Large Companies in a Disruptive Market
The longevity of large, established companies can often be overestimated due to a natural lifecycle many organizations follow, similar to the product lifecycle. Large companies that have enjoyed decades of…
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Fed Policy is Contributing to a Surge in Debt Payments
With the Fed holding rates at 23-year highs as part of its restrictive policy stance, the US Treasury has had to issue more debt to fund government expenditures. The result?…
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How is the Scientific Method used for Investment Management?
The scientific method is a systematic process used to gather knowledge and test hypotheses through observation, experimentation, and analysis. In investment portfolio management, the scientific method can be applied to improve…
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Resting on One’s Laurels: Definition, Consequences, and Strategies to Avoid It
Becoming complacent and basking in past success is a problem for active investment managers, driven by constant discussions of past performance. Every new potential investor primarily asks what we’ve done…
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Is the U.S. Stock Market Overvalued?
According to FactSet, the forward 12-month P/E ratio for the S&P 500 is 20.7. This P/E ratio is above the 5-year average (19.2) and above the 10-year average (17.8). I…
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Is Luck a Big Factor in Success?
The role of luck in success is a subject of considerable debate among scholars, entrepreneurs, and investors. While success is often attributed to hard work, talent, and perseverance, there is…
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From a sentiment perspective, is this what 2017 felt like?
Someone asked, “From a sentiment perspective, is this what 2017 felt like?” The short answer is, no, it’s not even close, and that’s just from memory. The beauty of data…
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Periods of Low Volatility are Eventually Followed by Volatility Expansions
The S&P 500 index (the blue line), which represents the U.S. stock market, has maintained an upward trend that started last fall. However, the stock market has recently reached some…
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How to Think Critically
Developing critical thinking skills involves adopting a structured approach to evaluating and analyzing information, arguments, and situations. Here are some strategies to help you think critically: Ask Questions: Question assumptions,…
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How Does Bridgewater, the World’s Largest Hedge Fund, Really Make Its Money?
How Does Bridgewater, the World’s Largest Hedge Fund, Really Make Money? From The New York Times, “How Does the World’s Largest Hedge Fund Really Make Its Money?” “Many of the…
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Stocks and Bonds Have Reached an Elevated Risk Level as Tomorrow Starts the First Day of the Seasonal Santa Claus Rally
When the wind is blowing, we can sit back and enjoy the ride, but when the wind stops blowing, we have a decision to make. We can sit there and…