{"id":492665,"date":"2010-03-31T05:49:00","date_gmt":"2010-03-31T09:49:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/is-the-revenge-of-high-beta-about-to-crash-the-market-2010-3"},"modified":"2010-03-31T05:49:00","modified_gmt":"2010-03-31T09:49:00","slug":"is-the-revenge-of-high-beta-about-to-crash-the-market","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/492665","title":{"rendered":"Is The Revenge Of High Beta About To Crash The Market?"},"content":{"rendered":"<p><em>(This guest post previously appeared at the <a href=\"http:\/\/pragcap.com\/high-beta-crash\">author&#8217;s blog<\/a>)<\/em><\/p>\n<p>As stocks have become <a href=\"http:\/\/pragcap.com\/the-cant-lose-market-powers-higher\" >increasingly invulnerable<\/a> over the last few weeks high beta assets have gone through the roof.&nbsp; The discrepancy between small caps and large caps has been particularly noticeable.&nbsp; Since the February 8th bottom, large caps have rallied 12.5% while small caps have rallied 18%.&nbsp; The divergence in performance has resulted in an unusual and potentially bearish scenario.&nbsp;<\/p>\n<p>The ratio of large cap to small cap performance has plummeted in recent weeks to levels that have been seen <strong>just twice<\/strong> in the last 5 years.&nbsp; At roughly 1.7, the ratio is reflecting the extremely bullish posture of most investors (<a href=\"http:\/\/pragcap.com\/credit-suisse-equities\" >just who isn&rsquo;t bullish about 2010 besides Credit Suisse?<\/a>).&nbsp;<\/p>\n<p>This rare divergence between large and small stocks occurred in Summer of 2006 just before small caps declined 15% and then occurred again just weeks before the market crashed in October 2008. &nbsp;&nbsp; While this doesn&rsquo;t necessarily mean the market is about to tank it does imply that high beta assets have become unhinged when compared to their safer low beta counterparts.&nbsp; Investors would be wise to take note.<\/p>\n<p><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb31a067f8b9a5a71e20d00\/chart.png\" border=\"0\" alt=\"chart\" \/><\/p>\n<p><a href=\"http:\/\/pragcap.com\/\"><strong>Read more market commentary at The Pragmatic Capitalist &gt;<\/strong><\/a><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/is-the-revenge-of-high-beta-about-to-crash-the-market-2010-3#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/akkz8d3Hf6Q\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This guest post previously appeared at the author&#8217;s blog) As stocks have become increasingly invulnerable over the last few weeks high beta assets have gone through the roof.&nbsp; The discrepancy between small caps and large caps has been particularly noticeable.&nbsp; Since the February 8th bottom, large caps have rallied 12.5% while small caps have rallied [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-492665","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/492665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=492665"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/492665\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=492665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=492665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=492665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}