Of course, if Larry M.’s Lehman-like drawdown scenario is realized, haven flows and shorts will pile into long-notes and bonds as a proxy short but we have no interest in trading fixed-income securities with a 100 bps negative real yield.

Instead, we wait patiently on the beach counting cash and listening to Johnny.

It’s just one of those rare times in an investor’s life where,

But most won’t.   Greed is a powerful thrust.

Its February release suggests that 66 per cent of respondents expect equity prices to keep rising this year, well above the 56 per cent reading recorded in early 2019, or 51 per cent in early 2016, ahead of the last election. Indeed, the current level of bullishness tops even the optimism seen in early 2007.

This sounds like good news. But there is a catch: each of the last four times that optimism levels have exceeded 60 per cent, equity prices have fallen soon after, with the decline ranging from 10 per cent in 2018 to 47 per cent in 2008. “Our indicators tell us, we’re very close to a Lehman-like drawdown,” argues Larry McDonald, a former strategist at Société Générale who now runs The Bear Traps report newsletter, referring to the share price fall that followed the collapse of Lehman Brothers in 2008.  –FT