World's Largest Public Hedge Fund Urges Investors To Resist The Temptation To 'Buy The Dip'

Echoing warnings from the world's largest hedge fund, Bridgewater, "a bigger shakeout is coming," and Europe's largest asset manager, Amundi, "let the dust settle," as well as a plethora of other industry experts with more 'skin in the game' than the usual commission-taker that confirms this as a "healthy correction," the CIO of Europe's largest publicly-traded hedge fund, is warning investors to resist the urge to 'buy the dip' or chase this rip.

There is certainly a lot interest in "buying the dip"...

But as Bloomberg reports, Pierre-Henri Flamand, the chief investment officer of Man Group Plc’s GLG unit, said market swings could continue and warned:

“The instinctive inclination to ‘buy-the-dip’ may be strong,” said Flamand in an e-mailed response to questions from Bloomberg.

“As the past week has shown, this may not work so well. Indeed, I think what we have seen in the past week could continue for some time.”

Seeds were being sown for "a particularly vicious correction," Flamand said in a January commentary before the market rout.

At the time, he said the market appeared to be moving into the fifth stage of Ralph Nelson Elliott’s wave model of technical analysis of market trends, in which everyone stands firmly behind the positive news.

“The current period of stability has overtaken 1965, and only once since 1920-1995 has the market enjoyed a longer run without a 5 percent fall,” he wrote in the commentary.

“While the fifth wave can last for weeks, months or even years, it inevitably precludes a significant market correction, on average giving up between 38 percent and 50 percent of all gains.

Now that would be a dip some might consider buying?


MusicIsYou Tue, 02/13/2018 - 05:23 Permalink

No matter what you tell Americans you're wrong. Tell them not to buy the dip they say "you just want to buy it first", tell them to buy the dip they say "you just want me to lose." That's why nobody likes Americans. You're going to lose either way when the whole system tanks.

MusicIsYou Tue, 02/13/2018 - 05:32 Permalink

Sure would stink to have to look Bob in the face next month who poured everything into the dip and won huge. Yet I who decided not to pour everything into the dip didn't make a dime. And I'll have to listen to Bob gloat.

Pi Bolar Tue, 02/13/2018 - 13:41 Permalink

There's a good chance markets could go up from here, and there is a good chance markets could go down from here. I don't need a hedge fund or a banker to tell me which good chance they are betting on.