In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discuss No Panic But 2022 Daily Declines Only Exceeded By 2008 & 2002. Here’s an excerpt from the episode:
Tobias: Yeah. It’s a good business, a good balance sheet. Since I added it, I don’t know where it is, but it’s done [unintelligible 00:16:13]. How about this one? The daily declines in the S&P 500 in 2022 have only been exceeded by 2008, which was the global financial crisis and 2002, which was the dotcom bubble. And yet, I don’t feel there’s a lot of panic around. I think that’s been reflected in the VIX as well. Is that anecdotal view fair? Do you think that nobody’s really panicked yet?
Bill: Yeah, I don’t think people are panicked. I’m sure there’s spots.
Jake: I think it seems like a relatively orderly liquidation, as one might call it.
Tobias: Orderly liquidation? Yeah. That’s what I think too.
Jake: Yeah, bad news if you’re dependent upon tail risk hedging type of insurance, because it just hasn’t really paid off in this slow burn. But Spitznagel was talking about this recently or I think he wrote an article about it. He likes to make that analogy to forests always, like forest fires and saying, “Now, the Fed is doing a controlled burn effectively and that can very easily get away from them as controlled burns sometimes do become uncontrolled.” If so, his tail risks offering will probably look pretty good then. So, who knows. He kind of has to talk his book but doesn’t mean he’s necessarily wrong about the control burns can get away from you.
Bill: It’s always something to worry about.
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