Focused Compounding Ep 456. Yen Carry Trade, Buffett's AAPL Sales, and MCS vs. CNK Price Divergence
Aug 11, 2024
Dive into the intriguing world of finance, where the yen carry trade is causing ripples in the market. Recent macroeconomic concerns like inflation and recession fears are dissected, revealing their effects on investor behavior. Explore the surge in Chapter 11 filings and the unique investment opportunities they present. Learn about a critical decision involving Apple stock and its implications for legacy planning. Plus, the contrasting fortunes of cinema stocks versus airlines highlight the complexities of market dynamics and investor sentiments.
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Yen Carry Trade Unwind
- The Yen carry trade likely unwound due to crowded positioning and a shift in U.S. interest rate expectations.
- A rapid change in recession probability and potential interest rate cuts likely impacted global yield differentials.
Market Mimicry and Crowded Trades
- Mimicry in markets, like AI training on AI-generated content, can lead to problems.
- Crowded trades lacking fundamental reasons are prone to panics when they unwind.
Market's Dependence on Fed Put
- Andrew Kuhn listened to CNBC during a long drive and observed market participants clamoring for an emergency Fed rate cut.
- Kuhn believes such a cut would cause further sell-off due to fears of systemic issues.