‘Confusion and disorientation’ driving ‘crazy’ moves in the market - Mark Mobius

CNBC reports that veteran investor Mark Mobius has warned that market volatility and the next moves by central banks have to be watched “very carefully,” describing “crazy moves” in assets such as bitcoin as being driven by “disorientation and confusion.”

Market speculation over when central banks, and particularly the U.S. Federal Reserve, could begin to taper asset purchases, has been rife for months given a nascent recovery from the coronavirus pandemic and the specter of rising inflation.

Mark Mobius, founder partner of Mobius Capital Partners, told that central bank moves have to be watched closely.

“Any pullback in the money supply as a result of central banks pulling back will be, I think, very bad for the markets. So I think we have to watch this very carefully,” Mobius told.

“We’re in a very uncertain time, that’s for sure,” he added.

Mobius believed that risk-taking behavior among investors and market volatility was down to confusion.

“A lot of people have cash in hand that they want to do something with, and secondly, a lot of people are confused. The fact that they’ve seen bitcoin, which they had so much faith in, go down the way it’s gone down confuses people,” he said.

“So you have a funny situation with a lot of money in their pocket and lots of confusion and disorientation, so I think that’s what driving a lot of these crazy moves in the market.”

Nonetheless, Mobius believed markets could still travel higher if central banks don’t pull the plug on asset purchase programs too soon.