We have taken a step back to have a good hard think about the "WTH" is happening in the financial markets over the past few months. Those that follow our work know that we were constantly repeating ourselves all year long that investors should be reducing risk and hedging their longs. This came with some hits to our performance from time to time, but that is the cost of insurance. Yes, we were looking for a potential top in November, but we were also looking for a Christmas rally in the second half of December after equity and high-yield bond prices fell during the first half of the month. We have finally formulated a few thoughts and we would like to share them now.
