After today's ridiculous move in the market, which brings back memories of either August 2007, March 2008, the reaction after the Tarp vote (the successful one), August 2011, when the market gyrated by 400 points on a daily basis, and many more bear market rallies, we hope to restores some semblance of normalcy by presenting the following series of clips all from Hugh Hendry speechs at the LSE's Alternative Investments Conference earlier this year. Must watch, because when everyone loses their mind, listening to some common sense is the best remedy.
Part 1, in which he discusses the generational shifts in attitudes towards leverage, concluding "Really I should be attending the Young Farmers Society as opposed to the LSE"
Part 2, in which he discusses his misgivings for the enthusiasm towards China, noting that "if you're spending money without the intent of any economic return, then you're spending money poorly". This is particularly notable after earlier today China explicitly warned that it does not want to be seen as the dumb money. Sorry China, if you look around the table and you don't see the dumb money, you are it:
Part 3, in which he denotes his views on currencies: "I think the Yen could appreciate greatly, I also think the dollar could appreciate greatly... you actually create a shortage of yen and dollars in an environment where asset prices are falling... that's all a precursor to then wanting to buy oneTouch Nikkei calls at 40'000, 50'000, 60'000..."
Part 4, in which he busts the bubble of anyone who claims they can predict anything: 'We spend so much time, resources and money trying to see the future - really we're spending money trying to delude ourself. You have no chance of seeing the future, it's better to recognise that'
and finally Part 5, in which he does an amusing word association game: