Bear Markets – Page 2 – Harlyn Research LLP

International Bears

Wednesday, October 18th, 2017

Excess volatility as an indicator of trouble ahead

After last week’s note about excess volatility in the US, we look at the experience of other developed markets in 2000, 2007 and 2015. In a majority of occasions, material increases in excess volatility signaled the onset of a correction and/or the transformation to a full-scale bear market. There are no such signals at the current time, which we regard as comforting, though not conclusive, evidence in favour of our equity overweight.

Filed under: Categories: Bear Markets, Eurozone, Harlyn's Process, Japan, Volatility

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A Bolt from the Blue

Thursday, October 12th, 2017

How to spot the next bear market

Provided that that causes of the next bear market in US equities originate in the US, investors should have time to adjust their asset allocation before the correction turns into a full-scale bear market. The necessary rise in excess volatility (equities minus bonds) takes several months and cannot happen without someone noticing.

Filed under: Categories: Bear Markets, Risk aversion, Tail Risk, Volatility

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