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‘A once in a decade opportunity’: JPMorgan breaks down how to take advantage of the largest bubble in modern history

‘A once in a decade opportunity’: JPMorgan breaks down how to take advantage of the largest bubble in modern history

Marko Kolanovic, JPMorgan’s global head of macro quantitative and derivatives research, sees an “unprecedented divergence” between market segments — one he says has created a “once in a decade opportunity.” He also identifies the areas of the market poised to benefit most and the catalysts that could get the ball rolling. JPM “While there is…


  • Marko Kolanovic, JPMorgan’s global head of macro quantitative and derivatives research, sees an “unprecedented divergence” between market segments — one he says has created a “once in a decade opportunity.”
  • He also identifies the areas of the market poised to benefit most and the catalysts that could get the ball rolling.
  • JPM

    “While there is a secular trend of value becoming cheaper and low volatility stocks becoming more expensive due to secular decline in yields, the nearly vertical move the last few months is not sustainable,” he said.

    This sets the stage for what could be a large, fast-moving convergence. As for a potential catalyst, Kolanovic thinks stabilizing economic data, trade-war progress, and Federal Reserve easing could do the trick.

    JPMorgan’s quant guru even took it a step further, identifying the areas of the market that could benefit from such a shift. In his mind, a hungry investor looking for sharp gains could do a lot worse than monitor these areas for a potential upside explosion.

    “This rotation would push significantly higher all the laggards such as small caps, oil and gas, materials, and more broadly stocks with low P/E and P/B ratios,” he said.

    At this point, only time will tell whether Kolanovic’s convictions come to fruition or whether this divergence continues to stretch even further.

    John Maynard Keynes put it best when he said “the market can remain irrational longer than you can remain solvent.” And the market always seems to find a way of humbling those who have the most irrevocable beliefs.

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