Top Traders Unplugged

SI368: Valuation Has Left the Room ft. Cem Karsan & Alan Dunne

104 snips
Oct 4, 2025
Guest
Cem Karsan
Cem Karsan, a market strategist known for his insights into liquidity and macro changes, discusses the current market landscape with Alan Dunne. They explore how structural liquidity and political incentives are reshaping asset valuation, dissecting why it's less about traditional fundamentals and more about positioning. Karsan draws parallels to the late '90s, emphasizing the rise of non-correlated assets like gold and crypto. They also tackle AI's nuanced role in the market and the expanding realm of options trading amidst increasing volatility.
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INSIGHT

Valuation Isn’t A Short-Term Signal

  • Valuations are poor short-term timing tools and become predictive only over multi-year horizons.
  • Markets run on liquidity and positioning, not fundamentals, so bubbles can persist long before mean reversion.
INSIGHT

98–99 Parallels With Modern Differences

  • Current bubble dynamics mirror the late 90s because of massive liquidity and a compelling narrative like AI.
  • Differences today include bigger fiscal risks, geopolitics, and greater government influence on markets.
INSIGHT

Positioning Creates Market Potential Energy

  • Reflexivity is measurable through positioning and dealer flows, creating potential energy for big reversals.
  • If the world is net long, few buyers remain, which amplifies moves and tail risks.
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