Monday, June 6, 2016

Dumb Beta: The Idiocracy's Last Bubble

If you want to know what keeps this entire shit show levitated, and how it will all end faster and more explosively than anyone can imagine, this is it, the ground zero neutron bomb...Piling into the same small handful of overvalued stocks is now called 'Smart Beta'. You literally can't make this shit up...

Dumb beta visualized:
ZH June 6, 2016

But first, as expected, gamblers are celebrating the imploding economy...

Dumb beta visualized again:

When active management was imploded by Central Banks and HFT, it was only a matter of time before the Idiocracy's trusted advisors invented a way to rationalize away market risk, by calling it "smart beta" and "low volatility".

"30 years ago, fund managers had to spend significant time and money to gain an edge over the markets"

Now we just all buy the same small handful of overvalued stocks and call it 'smart beta'/'low volatility'.

Zacks September 14, 2015
"Low-volatility ETFs are designed for investors who want exposure to stocks but do not want to take on too much risk."

"I would like to outperform the market with no risk please"

"My advisor calls it 'smart beta'. You wouldn't understand it"

P/E ratio of Consumer staples aka. cereal and bread:

Exactly one year ago, this was "smart beta" in China. Thirty years ago, this was called 'a greater fools' market', also known as 'Momentum':