Course Leading to Disaster

Course leading to disaster. 13 letters (8,5). A crossword clue in The Dominion Post NZ newspaper on Monday 21 Augustus 2017.

Answer: SLIPPERY SLOPE

Course leading to disaster example

The history of the 2000’s (and to a lesser extent August 2015, and the first 6 weeks of 2016) show that a pattern of bubble and crash has been a prevalent theme, as investors have all adopted this same strategy at the same time, (helped by the largesse of Central Banks), course leading to disaster. It has been noticeable that the euphoria/panic /euphoria cycle has been evident again recently as markets see sharp declines followed by equally vertical rallies. To blame momentum investors for all of this may be unfair, but it clearly has a major influence on market movements.

Can we see why investors adopt it ? Absolutely. Will we be monitoring its performance ? Yes. Will we be using it as a part of our investment strategy going forward? Probably not-it just doesn’t fit with our philosophy: we can see no way of efficiently capturing the returns without incurring (different) risks which we cannot justify, either to ourselves, or to our clients.