As interest rates continue to decline, stock prices have been moving in tandem since last summer, Ryoji Musha, president of Musha Research observes. This correlation gives pessimists “a reason to expect another crisis on the same magnitude as the global financial crisis,” he observed. The logic is that once the interest rate market is normalized, the correlation between bond and stock market returns will work in the reverse. Musha says this logic is entirely false and “pessimists will be completely rejected.” But don’t look at economic statistics, particularly regarding productivity growth. Musha says they “cannot be trusted” as he makes…
Ignore Statistics, Market Pessimists Will Be Rejected
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.