Part 8/9:
Concluding with a reflection on market cycles, the speaker warns of an event horizon when the central banks might pull back liquidity, "taking away the punchbowl." This scenario could usher in a correction, and because of market inertia and the difficulty of swiftly adjusting large portfolios, active risk management becomes vital.
He remarks that warnings often come with little lead time, making rapid adaptation challenging. For fund managers, particularly those overseeing sizable holdings, staying nimble is crucial since the inability to quickly exit positions can lead to substantial losses.