5 ms·

My Michael Burry senses are 'go to cash and don't come back' at this point.

by rogerkirkness 1y ago

FrustratedMonky 1y ago
Or the old adage "If your grandma is asking how to setup a margin account, you've already missed the bubble, get out".
- pavlov 1y ago
  Grandma wants AI stocks, taxi drivers rave about crypto, and Warren Buffett has been selling more than ever. But “this time it’s different” because… AGI…?
  - ksherlock 1y ago
    The Federal Reserve will lower interest rates to keep that big, beautiful bubble. Donald Trump thinks interests should be 1%. There are 2 FRB governors (jockeying for a new chair) that have publicly called for lower interest rates. One FRB member (Adriana Kugler) unexpectedly resigned a couple weeks ago and will be replaced by the WH economist. Just yesterday, the guy who was found liable in court for financial fraud demanded an FRB (Lisa Cook) resign after being accused of mortgage fraud. Do you suppose somebody in the WH is digging up dirt? And of course, weekly rants, accusations of fraud, and musings of firing JPo.
hughw 1y ago
But according to the chart there could be 500 or more S&P points before the top. you're leaving money on the table!
- bluGill 1y ago
  The question is how deep will the crash be. If the S&P goes up those 500 points and then crashes by 300 you are better off staying in. OTOH, if the S&P goes up those 500 points and then crashes by 5000 (I didn't bother looking up the value, so I don't know if that is possible) you are not out much by getting out today.
BenoitEssiambre 1y ago
Though maybe avoid USD or USD bonds while the gov is trying to get rid of Fed independence.
- Ekaros 1y ago
  At this point I have no idea what would be proper hedge bet... Certainly not crypto. Maybe gold is least insane, but I somewhat doubt even that.
  - wina 1y ago
    gold is overvalued too!
  - lm28469 1y ago
    What if we just stopped being so greedy and just bought/invested in what we actually need instead of playing silly games ? Find a plot of land, build a house, &c. a safe space for your kids and their kids. I know people stressing 24/7 about their money, diversifying their crypto shitcoins into pokemon card collections, buying watches or old apple computers in the hope they'll be able to sell them for more to the next sucker, buying and selling defense company stocks secretly hoping more poor souls will get annihilated in Ukraine or Gaza because it's good for their $$$. They're loaded like never before but I've never seen them so tired and miserable, I bet they don't even know why they want more money, hairless apes seem to like when numbers are getting bigger And on top of that if shit truly hits the fan the vast majority of these will be completely useless.
    - roboror 1y ago
      Because unless you are very lucky you simply will not be able to retire, or at worst just run out of money with no healthcare or shelter. If everyone you know stressing about money would actually be fine if they stopped stressing they are all very privileged. That's not reality for most people. This is not a silly game, and it's frankly ridiculous for your advice to be "find plot of land, build a house."
eqmvii 1y ago
Many people (including Michael Burry) have had this feeling over and over since 2008, and were basically always wrong! Markets are tricky beasts to predict.
- stogot 1y ago
  Ya I listen to this space a lot. 2015, 2016, 2018 and 2020 were a blur of “I’m cashing out and moving my 401k to money market” on several podcasts because of impending doom
  - JKCalhoun 1y ago
    It sucks because eventually they're right (and the rest of us were still laughing at the earlier podcasts).
    - deleted 1y ago
      [deleted]
- derf_ 1y ago
  To plagiarize Howard Marks, when you try to time the market, you have to be right twice: both on when to get out and when to get back in. Even being right once is incredibly hard. Or, to quote Peter Lynch: "Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves."
- baxtr 1y ago
  The problem is Tina! There Is No Alternative - Gold? Dead asset - Cash? Good luck with inflation - Bitcoin? My ass… So what else can you do as a rational investor than to invest most of your cash into an S&P500 or World fund?
  - mhh__ 1y ago
    Golds been rallying really aggressively recently
JKCalhoun 1y ago
Thank god there is no inflation or, you know, your cash would start to wither as well. Perhaps investments in undeveloped real estate....
- Fade_Dance 1y ago
  A risk free rate of 4% really isn't that bad for cash (which is why there are trillions sitting in money market funds right now). If you have Tbills with a bit of duration you're also long economic weakness due to having locked in yields, which offsets the inflation spike risk to some degree (or more than compensates for it from another perspective).
  - JumpCrisscross 1y ago
    > you're also long economic weakness due to having locked in yield You’re more precisely short rates.
dheera 1y ago
Michael Burry is selection bias. Everyone who predicted a massive crash when a crash didn't happen did not become famous.
- y-curious 1y ago
  Yeah, and it's the worst dealing with these people. My dad is like this, he's heavily in bonds because "a recession is coming" for the last 5 years. When it does happen, he will be "right" even though the opportunity cost for holding this belief is huge.
  - ncr100 1y ago
    There are a number of "Chief Analysts" who are saying "A Correction is Coming" in ~2-3 years. Soooo, yes there will always be future recessions, annnnd "professional experts" are saying it's coming sooner rather than later based upon the amount of over-inflated investments in less-well-run companies as they chase the profitability of the more-well-run companies.
infecto 1y ago
What in particular about margin makes you want to go into cash?
deleted 1y ago
[deleted]
throw0101a 1y ago
> My Michael Burry senses are 'go to cash and don't come back' at this point. And when do you get back in? Sitting in cash, waiting for the dip, is a losing strategy (even if you knew when the dip will occur, which you don't): * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... Simply put in a little from every pay cheque. If you think things are too wild, invest in an ("all-in-one") asset allocation fund that is not 100% stocks (e.g., fixed 80/20, 60/40): * https://investor.vanguard.com/investment-products/mutual-funds/all-in-one-funds https://investor.vanguard.com/investment-products/mutual-fun... * https://www.ishares.com/us/products/239729/ishares-aggressive-allocation-etf https://www.ishares.com/us/products/239729/ishares-aggressiv... * https://investor.vanguard.com/investment-products/mutual-funds/profile/vasgx#portfolio-composition https://investor.vanguard.com/investment-products/mutual-fun... * https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-80-equity-fund-accumulation-shares/overview https://www.vanguardinvestor.co.uk/investments/vanguard-life... * https://www.vanguard.ca/en/product/etf/asset-allocation/9579/vanguard-growth-etf-portfolio https://www.vanguard.ca/en/product/etf/asset-allocation/9579... * https://www.blackrock.com/ca/investors/en/products/239447/ishares-balanced-growth-coreportfoliotm-fund https://www.blackrock.com/ca/investors/en/products/239447/is... or a target date fund (which increases bonds as you approach your retirement date).
- rogerkirkness 1y ago
  I am all in cash outside of startup shares. I think it makes sense to be in the market, but compared to 2008, there is way more government fiscal issues, way more concentration of profit growth (e.g. only the top 10 companies have had profit growth in the last 3 years). Way more risk is in the system.
  - throw0101a 1y ago
    > I am all in cash outside of startup shares. Completely (retirement and 'regular' brokerage)? What criteria (if any) will you use to get out of cash and start buying again?

My Michael Burry senses are 'go to cash and don't come back' at this point.

FrustratedMonky 1y ago

Or the old adage "If your grandma is asking how to setup a margin account, you've already missed the bubble, get out".

pavlov 1y ago
Grandma wants AI stocks, taxi drivers rave about crypto, and Warren Buffett has been selling more than ever. But “this time it’s different” because… AGI…?
- ksherlock 1y ago
  The Federal Reserve will lower interest rates to keep that big, beautiful bubble. Donald Trump thinks interests should be 1%. There are 2 FRB governors (jockeying for a new chair) that have publicly called for lower interest rates. One FRB member (Adriana Kugler) unexpectedly resigned a couple weeks ago and will be replaced by the WH economist. Just yesterday, the guy who was found liable in court for financial fraud demanded an FRB (Lisa Cook) resign after being accused of mortgage fraud. Do you suppose somebody in the WH is digging up dirt? And of course, weekly rants, accusations of fraud, and musings of firing JPo.

hughw 1y ago

But according to the chart there could be 500 or more S&P points before the top. you're leaving money on the table!

bluGill 1y ago
The question is how deep will the crash be. If the S&P goes up those 500 points and then crashes by 300 you are better off staying in. OTOH, if the S&P goes up those 500 points and then crashes by 5000 (I didn't bother looking up the value, so I don't know if that is possible) you are not out much by getting out today.

BenoitEssiambre 1y ago

Though maybe avoid USD or USD bonds while the gov is trying to get rid of Fed independence.

Ekaros 1y ago
At this point I have no idea what would be proper hedge bet... Certainly not crypto. Maybe gold is least insane, but I somewhat doubt even that.
- wina 1y ago
  gold is overvalued too!
- lm28469 1y ago
  What if we just stopped being so greedy and just bought/invested in what we actually need instead of playing silly games ? Find a plot of land, build a house, &c. a safe space for your kids and their kids. I know people stressing 24/7 about their money, diversifying their crypto shitcoins into pokemon card collections, buying watches or old apple computers in the hope they'll be able to sell them for more to the next sucker, buying and selling defense company stocks secretly hoping more poor souls will get annihilated in Ukraine or Gaza because it's good for their $$$. They're loaded like never before but I've never seen them so tired and miserable, I bet they don't even know why they want more money, hairless apes seem to like when numbers are getting bigger And on top of that if shit truly hits the fan the vast majority of these will be completely useless.
  - roboror 1y ago
    Because unless you are very lucky you simply will not be able to retire, or at worst just run out of money with no healthcare or shelter. If everyone you know stressing about money would actually be fine if they stopped stressing they are all very privileged. That's not reality for most people. This is not a silly game, and it's frankly ridiculous for your advice to be "find plot of land, build a house."

eqmvii 1y ago

Many people (including Michael Burry) have had this feeling over and over since 2008, and were basically always wrong! Markets are tricky beasts to predict.

stogot 1y ago
Ya I listen to this space a lot. 2015, 2016, 2018 and 2020 were a blur of “I’m cashing out and moving my 401k to money market” on several podcasts because of impending doom
- JKCalhoun 1y ago
  It sucks because eventually they're right (and the rest of us were still laughing at the earlier podcasts).
  - deleted 1y ago
    [deleted]
derf_ 1y ago
To plagiarize Howard Marks, when you try to time the market, you have to be right twice: both on when to get out and when to get back in. Even being right once is incredibly hard. Or, to quote Peter Lynch: "Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves."
baxtr 1y ago
The problem is Tina! There Is No Alternative - Gold? Dead asset - Cash? Good luck with inflation - Bitcoin? My ass… So what else can you do as a rational investor than to invest most of your cash into an S&P500 or World fund?
- mhh__ 1y ago
  Golds been rallying really aggressively recently

JKCalhoun 1y ago

Thank god there is no inflation or, you know, your cash would start to wither as well. Perhaps investments in undeveloped real estate....

Fade_Dance 1y ago
A risk free rate of 4% really isn't that bad for cash (which is why there are trillions sitting in money market funds right now). If you have Tbills with a bit of duration you're also long economic weakness due to having locked in yields, which offsets the inflation spike risk to some degree (or more than compensates for it from another perspective).
- JumpCrisscross 1y ago
  > you're also long economic weakness due to having locked in yield You’re more precisely short rates.

dheera 1y ago

Michael Burry is selection bias. Everyone who predicted a massive crash when a crash didn't happen did not become famous.

y-curious 1y ago
Yeah, and it's the worst dealing with these people. My dad is like this, he's heavily in bonds because "a recession is coming" for the last 5 years. When it does happen, he will be "right" even though the opportunity cost for holding this belief is huge.
- ncr100 1y ago
  There are a number of "Chief Analysts" who are saying "A Correction is Coming" in ~2-3 years. Soooo, yes there will always be future recessions, annnnd "professional experts" are saying it's coming sooner rather than later based upon the amount of over-inflated investments in less-well-run companies as they chase the profitability of the more-well-run companies.

infecto 1y ago

What in particular about margin makes you want to go into cash?

deleted 1y ago

[deleted]

throw0101a 1y ago

> My Michael Burry senses are 'go to cash and don't come back' at this point. And when do you get back in? Sitting in cash, waiting for the dip, is a losing strategy (even if you knew when the dip will occur, which you don't): * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... Simply put in a little from every pay cheque. If you think things are too wild, invest in an ("all-in-one") asset allocation fund that is not 100% stocks (e.g., fixed 80/20, 60/40): * https://investor.vanguard.com/investment-products/mutual-funds/all-in-one-funds https://investor.vanguard.com/investment-products/mutual-fun... * https://www.ishares.com/us/products/239729/ishares-aggressive-allocation-etf https://www.ishares.com/us/products/239729/ishares-aggressiv... * https://investor.vanguard.com/investment-products/mutual-funds/profile/vasgx#portfolio-composition https://investor.vanguard.com/investment-products/mutual-fun... * https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-80-equity-fund-accumulation-shares/overview https://www.vanguardinvestor.co.uk/investments/vanguard-life... * https://www.vanguard.ca/en/product/etf/asset-allocation/9579/vanguard-growth-etf-portfolio https://www.vanguard.ca/en/product/etf/asset-allocation/9579... * https://www.blackrock.com/ca/investors/en/products/239447/ishares-balanced-growth-coreportfoliotm-fund https://www.blackrock.com/ca/investors/en/products/239447/is... or a target date fund (which increases bonds as you approach your retirement date).

rogerkirkness 1y ago
I am all in cash outside of startup shares. I think it makes sense to be in the market, but compared to 2008, there is way more government fiscal issues, way more concentration of profit growth (e.g. only the top 10 companies have had profit growth in the last 3 years). Way more risk is in the system.
- throw0101a 1y ago
  > I am all in cash outside of startup shares. Completely (retirement and 'regular' brokerage)? What criteria (if any) will you use to get out of cash and start buying again?