by Callum Thomas 1. Investor Euphoria: The Euphoriameter is...

by Callum Thomas

1. Investor Euphoria: The Euphoriameter is something I put together about a decade ago, designed to capture market sentiment from multiple sources (forward PE — higher valuations imply higher confidence, VIX — lower volatility is seen at times of maximum complacency, and surveyed bullishness — people feel bullish when prices go up). But you probably didn’t even need to see this chart to know that Euphoria is the dominant market mood right now!


Source: The Euphoriameter
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2. Hedge Fund Euphoria: Hedge fund traders have one job: generate a positive monthly PnL. There’s no room for academic big-brain discussions about valuations and long-term expected returns. Just make money. And so, as a group, they’re all-aboard the growth/momentum train (“just buy Mag7”. That’s what works right now, it’s obvious. And if it’s obviously right…


Source: @modestproposal1
3. Foreigner US Asset Allocation: Foreign holdings of US financial assets are heavily concentrated in equities. Brings to mind the Swiss National Bank, which invests a heavy component of its USD reserves in tech stocks.
But also — compare and contrast the heights of 2000 vs the depths of 2009 — what do you think this indicator is telling us?


Source:  
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