Editor-at-Large
Arthur Benn writes the house column, connecting the week's market action to the longer record of how these episodes tend to end. He spent two decades running money, first on a global macro book and then as chief investment officer at a mid-sized endowment, before he started writing full time. His column argues a position and dates it, so readers can check the call later.
Index put protection is cheap because equity volatility is low, and equity volatility is low because the index leaders are insulated from the thing doing the damage. The hedge that pays in this regime is not an equity hedge.
Eleven stocks account for 71 per cent of the S&P 500 return this year. The familiar reading is crowding. The better reading is that a higher long rate has made everything else expensive to own.
Nothing in a serial acquirer's reporting is false. The convention that lets an acquired company become organic on its first anniversary does the work that a misstatement would otherwise have to do.
Index funds were built to be cheap, not to be owners. They are now the largest shareholder in most of corporate America, and the machinery for exercising that ownership was designed for a far smaller job.
Every great capital cycle in history was justified by demand that genuinely existed. The demand has never been the question. The question is what happens to returns once everybody can see it at the same time.
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