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For a generation of investing pros, stable prices were a fact of life

What do you do when the old assumptions stop making sense?

For people working in finance, it’s a moment of extreme career risk—or a chance to be a hero to their bosses and their clients if they get it right. Many have never been here before.

Already, the real annual yield on a safe 10-year Treasury—accounting for the market’s expected inflation—is a percentage point below zero. For the moment, investors seem to care as much about having a haven as they do about staying ahead of inflation.

Katherine Greifeld Bloomberg 18 November 2021


They don’t want to be what investor Mark Kritzman calls “wrong and alone.” 

A manager with one-third of assets in Chinese stocks won’t get fired if that market falls, since almost every other firm has similar exposure. Being wrong together gives every manager plausible deniability.

But a firm that holds little or nothing in Chinese stocks will be blamed by clients if China booms, since its funds will lag behind their competitors. 

Being wrong and alone is what gets asset managers fired.

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