THE ERA OF TRUMP

[Smitty-48]

In general, shorting is too clever by half, even Michael Burry says he doesn't look for shorts, he goes long, he's like Warren Buffet, he's just a contrarian, he only went short on subprime because once it was staring him in the face, that was the only play, but he's not out there shorting the market as a strategy.

From 2000 to 2008, Scion Capital returned 489% on the big subprime short, but from 2002, you've made 5000% on AAPL, when you factor in the two stock splits.

In the book, it made it sound like Burry made nothing from his activities. He basically just did it to throw it in his clients face and say "I'm right you are wrong. Eat shit!" If he really did all that for no charge, that kind of makes him a dumbshit. He basically predicted the collapse of the housing market, and got nothing out of it...

He made a $100 million profit and paid out $700 million in profits to his investors, they all freaked out because they were spooked by his all in position on subprime, but he did pay off in the end.

[heydaralon]

What do you guys think the next bubble will be? Have you taken any measures to profit from it bursting?

[Okeefenokee]

What do you guys think the next bubble will be?

college.

Enormous loss on investment.

[Smitty-48]

When the last bubble burst, my father had just died of cancer, so I didn't do anything as it went spiralling down, I didn't have the time nor inclination to deal with it, basically just ignored it and rode it out, by the time I got back to it, King Dollah had bailed the markets out and then things bounced back in pretty short order, so I came through completely unscathed, wasn't actually that big of a drop, when you look at before, and then the big ride up we've had after.

I mean, say what you want about the bailout, QE, and historically low interest rates, but they've actually worked out pretty good from where I'm sitting, and certainly there are always buying opportunities in a panic correction, you could have bought AAPL for $14 a share in 2008, now $143.

If you're dividend investing, long on blue chips, I would just ignore it.

[SuburbanFarmer]

What do you guys think the next bubble will be? Have you taken any measures to profit from it bursting?

I think that the 2007 bubble has never been allowed to burst - we're still riding it. The impact of Fed unwinding, Trump's hopium running out, and other things like aggressive car and student lending will combine to rip the markets apart this year, or soon after.

The markets are at all-time highs, as we speak - nearly double the levels seen in 2007. It just takes one event to kick over the apple cart from here.

[Okeefenokee]

Time capsule.

He will get demolished,

[ssu]

What do you guys think the next bubble will be? Have you taken any measures to profit from it bursting?

The last bubble that burst was the real classic one: a housing bubble that created a banking crisis and an economic depression.

That was the real deal because it had so many effects on the real economy: real estate is the biggest thing ordinary people buy and hence effects every household, it has huge impact on jobs and it's crucial to the financial sector. Hence a tech bubble bursting didn't have such effects: only the stupid people that invested in hyper expensive it-stocks lost money and otherwise people went on their normal business.

Now it's just basically a central bank controlled financial system that has created the lowest interest rates in human history (really, it the whole of history) which has created general asset price inflation.

One bubble ready to burst sooner or later is the bond market. It ought to be evident to everybody that the bond bull market that started in the early 1980's is now over as interest rates are slowly going up. After being the lowest in recorded history (and likely through time when there has been a banking system of any kind).

Some of the many articles:

In the early days of quantitative easing, central banks used to warn us that the exit from the bond bubble they created would have to be managed carefully because of its capacity to destabilise the financial system. You can understand why they worried: if government debt, supposedly the safest form of asset, is suddenly imposing double-digit losses on holders, there will be consequences. Prepare to see them soon: the bond bubble has been 30 years in the making and it won’t deflate painlessly.

See Bond bubble could burst with explosive impact

The global bond markets are verging on a bubble, which will likely result in a significant loss of principal value for major types of bonds by the end of 2017.

For many investors, the stock market seems overpriced, so they are seeking better returns in bonds, whether U.S. Treasurys, corporate junk bonds or emerging-markets securities. As buyers pour in, bond prices are soaring and yields (which decline as prices rise) are shrinking.

The situation verges on a bubble not only because bond yields are at historic lows, but also because investors are gravitating to lower-quality and longer-term bonds with higher risks. When these risks become realities, bond investors will flock to the exits—reducing liquidity and further depressing bond prices. If the bubble deflates, bond holders will experience deep declines in the current value of their bond portfolios.

See Is the Bond Market in a Bubble?

The thing is that bubbles can go on for a long time... especially when it's as important for the central banks (and the sovereign states) as the bond market is.

[Smitty-48]

"All time high" is a senseless metric, the market actually hit the all time high in 1995 at 8000, was 8000 "too high"? Makes no sense.

[ssu]

"All time high" is a senseless metric, the market actually hit the all time high in 1995 at 8000, was 8000 "too high"? Makes no sense.

Perpetual inflation is guaranteed in the long run with this monetary system. And in the end any stock index doesn't tell much if one doesn't take into account the value of the currency at hand.

Yet how and when that inflation takes a leading role isn't such a simple question. Many doomsayers have forcasted things wrong for uh, soon a decade.

[SuburbanFarmer]

"All time high" is a senseless metric, the market actually hit the all time high in 1995 at 8000, was 8000 "too high"? Makes no sense.

Perpetual inflation is guaranteed in the long run with this monetary system. And in the end any stock index doesn't tell much if one doesn't take into account the value of the currency at hand.

Yet how and when that inflation takes a leading role isn't such a simple question. Many doomsayers have forcasted things wrong for uh, soon a decade.

That's because the normal market cycle is 5-7 years. We're currently pushing 11. It's happening, and soon.

Or, you believe that fuck-it, the Fed can control everything, and HFTs are going to balance it all out, because we have the uber-military backing us, and what-the-fuck-you-gonna-do-about-it-onomics will win.