EXCERPT: Valuations in the corporate sector are ahead of fundamentals and highly susceptible to major shocks due to the sector's structural defects. Market technicals will likely push valuations still higher before the inevitable correction. And the pattern of corrections is disturbing: each new one is more severe than its predecessor, due to the lack of shock absorbers and the advent of new players who thrive on volatility. The 13-month streak of positive excess returns from corporates is coming to an end. Trimming overall corporate exposure (while diversifying broadly within that exposure) is now the prudent strategy, even though this may cost us in terms of carry in the short term.