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Despite popular belief, turkeys can fly, just not for long distances. Similarly, investors believe that crashes happen “all of a sudden”, but they don’t. Market internals have to change to allow a -10% decline to morph into a -20% or more decline.
In this Monthly MOTR Checkup we walk through the GFC through the lens of the Risk Gauge to show how crashes don't come out of nowhere and that there are many warning signs that aren't currently present in todays market.
0:00 Introduction
1:20 The "Wall of Worry"
3:33 Current Day MOTR Risk Gauge
4:20 Risk Gauge: December 2006
5:26 Risk Gauge: June 2007
7:37 Risk Gauge: September 2007
8:28 Risk Gauge: March 2008
8:55 Outro