Eugene Kogan: Sell in May and go away?

Not quite so.

Only the lazy did not say that phrase repeatedly for the last time. Once heard this expression and in my texts.

What the roots of this statement? How literally it should be taken?

Theories about the origin of the phrase a few, and they all Hark back to “deinfestation” times.

All plausible seems the theory that the full version of this saying – Sell in May and go away, and come on back on St. Leger's Day – originally used by the London aristocracy, merchants and bankers, who preferred to run in the summer from the capital to their country houses.

Then the saying caught the investment community, and there was a certain meaning. From 1950 to 2013 the average performance of the S&P500 in the months from may to October was only 0.3%. At the same time, from November to April, the index was growing at 7.5%. What is the explanation? It is difficult to say. Perhaps the fact that traders are people too, and summer go on vacation.

Investors preferred in April and may fix the position and relax.

Oh, those blessed times!!!

After 2013, everything changed, and in the last few years leaving the market in the summer months may not always be so profitable.

At the same time, the beginning of summer is often marked by the stock market a variety of negative events and a General decrease in activity.

Therefore, a more cautious market participants prefer for some time “go into the cache”. Write in quotes, because change shares for cash, of course, not all. Many simply rebalancing portfolio as short premium bonds or just increase the proportion of protective tools.

What about today?

What is happening currently in the markets is completely unprecedented. The analogy, of course, you can “pull the ears”. But to be honest, they will still be very relative.

The illogicality of what is happening visible to the naked eye.

The mere fact that current ratio P/E is absolutely unrealistic and crazy signal about the future growth and profitability of the business, to put it mildly, looks today absolute nonsense. And the only explanation for this – tremendous liquidity. Which, by the way, as we saw recently, has a chance to evaporate quickly.

Else – fears of reflation-inflation of assets. Not consumer inflation. Namely, the inflation of assets. Although, in my opinion, a very controversial matter.

Rince алогичны и одновременно более чем логичны. Просто их логику мы, в массе своей, обычно умеем трактовать лишь задним числом.

Is today what to buy? Is.

Is overrated stories? Full.

Means we all have something to do.

But today we need to be especially careful. Not to hurry. Not to paramedics. Not much averaged.

To choose quality and reliability for quick money.

May, however.

The author's profile on the social network:

see a mistake? Highlight it and press CTRL+ENTER

all the related blogs "


Add review


five × 1 =