“Repricing Risk” is a phrase that is getting a lot of play today. It’s one of those terms that people say when they need a few buzzwords to make themselves sound smart, but its definition is vague at best. Unlike the smart guys talking about it today, I am not ashamed to tell you that I have no clue what it means. That’s why I never use it. If it meant something, we would hear about it every day, not just on big down days.

But here is the biggest point - you cannot “RE”price something that was not being factored in a few days ago. In other words, today may have been more about pricing risk (for once.) And then you need to struggle with another aspect of the rePRICING risk concept. Almost every stock in the S&P declined today, but not every stock was overvalued before and not every stock that declined pro rata with the S&P has the same beta. So if you believe in this rePRICING concept, you are by default suggesting that investors know how to assign risk to stock prices perfectly today but not yesterday. Let’s talk about tomorrow… if stocks spike higher for whatever reason they do what they have done in the past, are they not repricing risk? Do higher stock prices mean that investors are ignoring risk? Will we ever hear this phrase - “Stocks hit record highs today as investors repriced risk?”

While macroeconomic factors, liquidity, geopolitics, etc. all impact some percentage of each asset, stocks have unique risk factors. The breadth and uniformity of today’s drubbing was not a discriminate assignment of risk. I am certain that share prices were repriced, but as for risk - I don’t know how to define it.