More than four years ago – when Epsilon Theory was still young – Ben wrote a marvelous note that
When Good Words Go Bad
To learn more about Epsilon Theory and be notified when we release new content sign up here. You’ll receive an email every week and your information will never be shared with anyone else.
Continue the discussion at the Epsilon Theory Forum
Participants
The Latest From Epsilon Theory
DISCLOSURES
This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results.
Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
I think part of the answer is simply how Wall Street marketing and sales function. It starts with a trade / strategy / idea / trend that is working (and, if being sold to retail, has been working for a looooong time). Then, a bunch of products and strategies are thought up / created to sell the idea with, simultaneously, a marketing “hook” being created (if someone hits on a really good idea like a snappy acronym) and, then, let’s just say it, Wall Street sells the hell out of it.
They did it with BRIC (I believe many [many, many] structured products made it into retail 401k accounts tied to the BRIC acronym in some way) and FAANG. And they’ll continue to do it - and this might be the reason FA[A]NG is dying - until the trend fails and the story doesn’t sell. I’ve never seen Wall Street quit selling an idea that has a lot of takers, but it does quit when the idea / trade / strategy is stumbling and investors don’t want to hear the story anymore (especially when their portfolios are already bulging with several version of the strategy already).
Heck, like skinny suits, acronym investments might feel so “2010-2020” (or so) looking back from 2030 one day.
Yes and yes. Part of the coyote’s bit is absolutely a cycle of package and repackage, I think.