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Peter Redward's avatar

Callum Just wondering if you can write something on leveraged ETFs. I was looking at them yesterday. Seems investors have been catching the falling knife. To me, leveraged ETFs and the put call ratio are v interesting as while there's been lots of negative press about stocks, if you look at the flow data, investors seem very willing to buy the dip (not just leveraged but in general, big inflows into equity ETFs).

I think this is one reason why stocks can't bounce. As despite huge month end rebalancing flows, positioning just isn't short.

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Inverteum Capital's avatar

It's about time US stocks experienced some mean reversion compared to the rest of the world.

1) "As things currently stand, there is a long way to go before we can get excited about stocks vs bonds from a valuation standpoint, and if anything you typically see downside overshoot during periods of mean reversion like this."

2) "Much of the world’s stock markets are going up and enjoying a weaker USD and rotation flows out of US into global markets."

Stock vs. bond ratio of US, developed, emerging markets (2000-25): https://substack-post-media.s3.amazonaws.com/public/images/39f7af52-a933-4379-890a-a797cebf5338_1375x860.png

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