Markets
Liquidity is a state of mind
It's everywhere exactly when you don't need it, and gone the moment you do.
Liquidity is the most seductive illusion in markets. In calm times you can sell almost anything in a moment, and you start to believe that is a permanent feature of what you own. It is not. It is a feature of the mood.
When everyone is calm, everyone is a buyer, and the exit is easy and free. When everyone is frightened, the buyers vanish at the exact moment the sellers arrive, and the exit you counted on shuts. Liquidity evaporates precisely when you want it most.
The defence is not to own only liquid things. It is to never be forced to sell. Permanent capital, a cash buffer, and a position size you can actually hold turn liquidity from a lifeline you depend on into a convenience you can ignore. The investor who never has to sell is the one the frightened seller eventually comes to.
The views above are the firm's own and are provided for information only. They are not investment advice, nor an offer or solicitation to invest. Capital at risk; the value of investments can go down as well as up, and past performance is not a guide to future results.
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