Retail vs hedge funds and young vs old
Here is a chart from Goldman Sachs showing various measure of risk-on and risk-off. It's unprecedented to see some indicators at extremes on either side.
I think it speaks to very-different attitudes in different cohorts. Among generally young people and retail traders, along with momentum-followers, there is a big belief in higher equity prices.
Other reports how that older investors and hedge funds are more cash-heavy than ever.
It's a battle of the titans and reflects the unease we see in the markets because there's a big group in the middle that's swinging back and forth.
The thing is, the disparity raises the stakes on both sides because only one will be right. When one of the bulls or bears capitulates, it's going to lead to all-time highs or brutal rout.
I think it's so hard to have conviction on either side. I believe that easy money and insane deficit spending ultimately wins out, but at these levels, is the risk-reward worth it? I don't think it is.
