Mohamed El-Erian Is In On It

The Heisenberg profile picture
The Heisenberg


  • People don't much care for Wall Street analysts, but they do love "gurus."
  • So I went out and found a "guru" for you.
  • And guess what? He agrees that your gains are (almost) entirely attributable to central bank liquidity and corporate buybacks.

Let me tell you something that amuses me.

Retail investors are almost universally predisposed to being skeptical about anything Wall Street says while simultaneously hanging on every word that emanates from a "guru" like say, Warren Buffett.

If you want to truly understand how markets work, that is not a great way to approach things.

This isn't a perfect analogy, but listening to amorphous aphorisms from your favorite "titan" of the investing universe while summarily dismissing what the guys and gals on the Street are saying is a lot like going into a retail store, overhearing the salespeople telling each other that no one is buying anything, and then writing that off as meaningless because the CEO of that retailer said everything was fine on the last conference call.

See the thing is, it's worth listening to the people on the frontlines - even if you think they might have ulterior motives, like say talking their own book and/or trading against their institutional clients.

Because let's face it - some of the research they put out doesn't promote specific trades or any trades at all, for that matter. So you know, when you hear people saying things like "Wall Street analysts are always a contrarian indicator" or "they're just trying to increase their trading revenues," you might consider that some of them, sometimes, are just trying to do their jobs.

Even if you believe it's all one giant, nefarious plot to create a new robber baron class, I can tell you definitively that some of the macro analysts I cite in my posts are not part of the conspiracy. I know them. I talk to them everyday. They aren't out to deceive anybody. Turns out, they show up at their desks, write some research, and catch the train home in the afternoon like everybody else.

This article was written by

The Heisenberg profile picture
Perhaps more than any other time in the last six decades, the fate of markets is inextricably intertwined with the ebb and flow of geopolitics. It's become increasingly clear that one simply cannot fully comprehend market movements without a thorough understanding of concurrent political outcomes. Drawing on extensive experience in both politics and finance, Heisenberg will help demystify a world in which investors can no longer hope to conceptualize of markets as existing in anything that even approximates a vacuum.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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