With High Yield Primary taking a half term break, there was finally found some time to ruminate, cogitate, and speculate if we may have finally reached a market top for risk assets.

I’ve long believed that Efficient Market Hypothesis has no place in the understanding of markets. They are often irrational – cue Keynes’ famous quote – but it’s no Random Walk, either, correlated in a myriad of ways. Chartism is a self-fulfilling prophecy with many false prophets (and false breakouts) with many traders including yours truly making a fortune filling stop-loss orders and taking the other side of the trade.

One of the reasons why I found it easy to transition to journalism (I parked myself for a max six months in July 2004 awaiting distressed opportunities!) is that as a trader I was always looking for the narrative to understand and then profit from what was happening. My advantage when covering special situations was the ability to work out the potential value of the distressed trade, the risks and understand the game theory. I often knew who had the gun, who had the knife, and whether either of them knew if the other was prepared to use their weapon or not.