Bob Farrell's Rule #9 remains timeless: when consensus gets this lopsided, the market tends to surprise.
Bank of America's latest fund manager survey shows 55% expect no landing at all, 38% see a soft landing, and just 2% anticipate a hard landing. That's 93% betting against meaningful economic pain.
History suggests extreme consensus is dangerous. When everyone's positioned the same way, there's no one left to buy the story. Markets don't reward crowded trades.
I'm not calling for a crash. But when positioning gets this one-sided and valuations are stretched, the risk-reward tilts unfavorably. The crowd isn't always wrong, but they're rarely right at extremes.
Stay skeptical. The best opportunities come when others are fearful, not when 93% are comfortable.
Bank of America's latest fund manager survey shows 55% expect no landing at all, 38% see a soft landing, and just 2% anticipate a hard landing. That's 93% betting against meaningful economic pain.
History suggests extreme consensus is dangerous. When everyone's positioned the same way, there's no one left to buy the story. Markets don't reward crowded trades.
I'm not calling for a crash. But when positioning gets this one-sided and valuations are stretched, the risk-reward tilts unfavorably. The crowd isn't always wrong, but they're rarely right at extremes.
Stay skeptical. The best opportunities come when others are fearful, not when 93% are comfortable.
