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is it possible to have a premonition is there a sign that can alert you to the impending Armageddon is there something on the wall that market analysis are reluctant to see if American hedge fund manager Michael bur's most recent tweet is in the indicator the stock market is due for a bumpy ride hey folks welcome back to the channel in today's video we'll show you Michael burry's warning before we get into the video don't forget to drop a like on this video And subscribe to the channel if you haven't already make sure that the post notif notifications are turned on so that you never miss a video from us last summer hedge fund manager Michael burry of The Big Short Fame raised the alarm about the greatest speculative bubble of all time in all things he advised individual investors who were buying meme stocks and crypto currencies that they were on the verge of the mother of all crashes the S&P 500 and NASDAQ indexes have fallen 15 and 24% this year respectively confirming the Scion Asset Management CEO's gloomy addtion burry has taken credit for forecasting the sell-off detailed why he expects more drops and warned against spying into relief Ries in tweets that he subsequently removed in contemporary history there has never been a worldwide recession or Market meltdowns sparked by a Public Health crisis economic and financial factors have produced recent recessions and Market meltdowns however a global pandemic has created a market crisis this worldwide meltdown has been brutal this is the most severe crash in the shortest amount of time the crash in 2008 was even worse the co pandemic followed by the Ukraine conflict has driven Global cost to rise only 19% of American adults evaluated the Corona virus epidemic as a very major problem for the country in a Pew Research Center survey conducted from April 25th to May 1st more than 2 years after the co pandemic began while 70% assessed inflation as a very big concern inflation in the United States is hovering run a 40-year high with an annual increase of 8.3% in April slightly lower than the 8.55% increase in March inflation has surged in all major economies throughout the world as food and energy costs Rose UK inflation hit a 40e high of 9% in April the most since records began in their current form in 1989 in April France's annual inflation rate was confirmed at 4.8% the highest since October 1985 is global inflation at an alltime High food prices are rising at an unprecedented rate around the world owing to two years of pandemic related disruptions and now the Russia Ukraine conflict these were undoubtedly on the cards this massive inflation is largely due to the centur pandemic previous outbreaks such as the Black Death SARS influenza H1N1 and Swine Flu have tremendous Economic Consequences around the world for instance due to the Spanish flu and Global World War I the United States and the rest of the world had a brief bout of inflation in 1918 covid-19 on the other hand is more contagious and its capacity to survive on surfaces makes it more difficult to control inflation on the other hand has historically remained low during pandemics 2 to 3% and fell afterward with median inflation falling below zero one year after the pandemic ended and fluctuating near zero for the next 9 years however Co is a pandemic that resembles a war and is followed by the Ukraine conflict as a result global infl may have been unavoidable unless it was disregarded each country had to prepare for pandemic related shocks in its own unique way it's now a question of how fast and effectively governments can reign in Rising inflation the S&P 500 Index has made a significant recovery since the pandemic crash in the spring of 2020 climbing from a low of 2,192 points to 4,089 points as a May 17th close bur tweeted on May 3rd that it might fall by 54% to 1,8 162 points in the following 5 years bur pointed out that when the S&P 500 plummeted in the past it traded lower for several years afterward he pointed out that the index was 133% lower in 2009 than it was in 2002 177% lower in 2002 than it was during the long-term Capital Management debacco in 1998 and 10% lower in 1975 than it was in 1970 if the Benchmark index continues its historical pattern it could trade 15% lower in the spring spring of 2020 according to bur a dead cat bounce occurs when stock prices temporarily rise following a severe drop usually as speculators buy shares to cover their bets in a tweet on May 4th Barry stated that they frequently occur during large stock market losses there's a hypothesis that a dead cat will bounce if it falls far enough this also applies to the stock market a stock that's been declining suddenly begins to rise investors are ecstatic and pour money in it quickly returns to the falling phase stock market investors are frequently perplexed by the dead cat bounce a stock that's been underperforming unexpectedly begins to Rally increasing the hopes of equity investors however a transitory stimulus government intervention or just broker speculation to generate volumes resulting in a price spike could have been the Catalyst when the trigger scenario subsides prices fall wiping off millions of dollars in investor value the consequence is that any rise in the coming months should be viewed as temporary respites rather than a market comeback bur pointed out that 12 of the NASDAQ index's 20 largest one-day rallies occurred as the Doom Bubble Burst while nine of the S&P 500's 20 largest one-day rallies came in the aftermath of the 1929 great crash don't be deceived by the stock market rebound many on Wall Street are dubbing the recent rally in oil feutures and stocks which began with an Abrupt intraday reversal a week ago a short-term bottom however a closer look at the market r reveals that the rebound was largely driven by short covering which could imply that the rally is losing speed due to a lack of genuine purchasing activity according to market the average stock in the S&P 500 had a short position of 3.43% on January 28th topping the 2011 high of 3.19% and reaching levels not seen since March 2010 it's no surprise that crude Futures hold an all-time high net short position given that stocks and oil mve in lock step short interest surged across all 10 S&P 500 sectors on May 5th according to bespoke Investment Group energy stocks had the most money staked against them according to the statistics GameStop Chesapeake and Trans Ocean have the highest percentage of short interest among individual stocks while utilities and financials have the lowest Traders believe the level of short interest will soon reach new highs which would be a negative indicator for the market bur warned on May 5th that stocks could launch many rallies before the slump ended he pointed out that once the dotom bubble burst the NASDAQ rebounded 16 times gaining an average of 23% each time on the route to a 78% drop at its nator bur further pointed out that after the great crash of 1929 the Dow Jones index Rose 10 times Rising by an average of 23% each time before bottoming out at an 89% loss the stock market is on a dangerous path according to bur the US Stock Market appears to be following the pattern of prior bubbles putting it on the verge of a massive fall the S&P 500's recent trajectory according to the Scion CEO is startingly similar to the index charts for the decade preceding the dot crash and the Dallas track for the decade preceding the great crash of 1929 bur maintained that the decade long buildups were due to human nature and that humans were repeating itself when equities dropped bonds used to rise to compensate for the loss that's why the traditional recommendation is to have a 60/40 investing portfolio with 60% stocks and 40% bonds stocks have historically been the primary source of wealth development as they've increased in value faster than any other asset type bonds provide a buffer against more volatile shares however due to the Unholy Trifecta of interest rate hikes inflation and a war in 2022 both asset classes are now in the red invalidating the old 6040 rule bur's other tweets warned his followers against investing in Bitcoin the world's most popular cryptocurrency and June 2021 a day following bur's post the price of Bitcoin temporarily fell below $30,000 bur also warned of another Market catastrophe around the same time predicting that the meme stock frenzy would finally end poorly he remarked on the microblogging site Twitter all hype speculation is drawing in retail before the mother of all crashes the highly shorted GameStop gme get GameStop Corp class a report stock was one of the hot favorites among young amateur Traders during the peak of the pandemic in a May 10th tweet burry appeared to perform a victory lab implying that the stock market disaster he's been warning about has finally happened the Scion CEO quipped that he was correct in his prediction just as he was during the US housing bubble in the mid 2000s bur also nodded when Elon Musk referred to him as a broken clock last year after the Scion CEO gambled against Tesla stock anticipated its depreciation and questioned musk's motivations for selling his Company's stock the stock market in the United States is experiencing Whiplash on May 5th stocks plunged in one of the worst sessions of the year the Dow Jones Industrial Average dropped more than 1,000 points or 3% during intraday trade while the S&P 500 dropped 4% and the tech savvy ASAS that composite dropped more than 5% following one of the Market's greatest days of the year on Wednesday the losses were a significant turnaround stocks Rose after the Federal Reserve raised rates by a half point and fed share Jerome Powell said the central bank would not consider a 75 basis point hike anytime soon the Dow finished the day up 932 points or 2.81% while the S&P 500 was up 2.99% marking the highest St for both indices since 2020 the NASDAQ Rose 3.19% as well while the type of Market volatility might be unsettling for investors experts advise Prudence when markets tumble volatility can provide investors with opportunities to acquire more of their preferred companies positioning themselves for potential rewards bur cautioned investors in a tweet on May 11th that stocks may go much further between the software stocks Peak during the dotom bubble and its bottom in 2002 5.2 times its outstanding shares were exchanged according to the investor during the financial crisis this figure was 3.3 times but it's only reached 0.5 times so far bur said that Amazon and JP Morgan have similar stories implying that it could be a while before those and other equities botom up out very's hedge fund cion asset management is a high volume High activity fund the fund has an average holding duration of 08 quarters according to well wisdom cion has roughly $291 million in Al according to the most recent form advv Furthermore with the exception of Bristol Meers squib every single investment in the fund was purchased during quarter 1 s sold out of numerous Brands during the quarter including General Dynamics GE group and Cor the fund currently has 12 positions in its 13f portfolio bur's largest position is to put options against Apple which is not surprising based on his tweet there are 2,60 put options owned by the fund if these put options expire in the money they'll provide you with the opportunity to sell 26,000 shares of Apple stock the options represent 17.86% of Scions 13f portfolio in total Bristol Meers squib and booking Holdings are the fund's second and third largest Holdings respectively bmy is allocated 10.88% while bkg is allocated 99.33% bu's bet on bmy has paid off handsomely with the stock up 23% year-to date compared to the S&P 500's 18% drop bkng is a different Tail as it's down 17% year-to date it still outperforms the S&P 500 by 1% bur's Twitter account will undoubtedly be followed by investors interested in seeing how he pursu leaves the market is bur's mental model accurate and predicting Doom there's just one way to discover the truth concerns about the Ukraine conflict China's recent covid-19 Outbreak The looming threat of a us or european recession and Rising Global inflation are all expected to play a role in future economic turbulence with this we've come to an end the content in this video is for educational purposes only and hint should not be considered Financial advice all the financial decisions should be made after doing your wide spectrum research also make sure you like the video comment down your thoughts regarding this video and also don't forget to subscribe to our channel to stay updated about the latest crypto news
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