Charles-Henry Monchau, CFA, CMT, CAIA on LinkedIn: #contrarian #investor #us #housing #chart #michaelburry #stockmarketcrash | 60 comments (2024)

Credit to Charles-Henry Monchau, CFA, CMT, CAIAAugust 16, 2023 Michael Burry is an outstanding #contrarian #investor and did exceptionally well during the 2006-2008 #us #housing crash. https://lnkd.in/ggUMrDjXAdam Khoo had a look at all of Michael Burry's recent predictions and he shared it with a #chart on X.Here's a summary:In 2005, Predicted the collapse of the subprime mortgage market📈 Housing market crashes in 2008, Global Financial Crisis.On Dec 201 5, he predicted that the stock market would crash within the next few months.📈 SPX +11% Next 12 monthsOn May 2017, he predicted a global financial meltdown📈 SPX +1 9% Next 12 monthsOn Sept 2019, he predicted that the stock market would crash due to a bubble in index ETFs📈 SPX +15% Next 12 monthsOn March 2020, he revealed a massive bearish bet-📈 SPX +72% Next 12 monthsOn Feb 2021, he predicted that the stock market would crash due to a speculative bubble. Shorts Tesla.📈 SPX +16% Next 12 monthsOn Sept 2022, he predicted that the stock market warned of more failures, bottom not hit yet.📈 SPX +21% Next 11 monthsOn Jan 2023, he predicts a recession and new round of inflation. Says " SELL"📈 SPX +17% Year to DateOn Aug 2023, Reveals Short Positions on the SPY and QQQ#MichaelBurry #stockmarketcrash

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A look at all of Michael Burry's recent predictions.In 2005, Predicted the collapse of the subprime mortgage market-> Housing market crashes in 2008, Global Financial Crisis.On Dec 2015, he predicted that the stock market would crash within the next few months.-> SPX +11% Next 12 monthsOn May 2017, he predicted a global financial meltdown-> SPX +19% Next 12 monthsOn Sept 2019, he predicted that the stock market would crash due to a bubble in index ETFs -> SPX +15% Next 12 monthsOn March 2020, he revealed a massive bearish bet--> SPX +72% Next 12 monthsOn Feb 2021, he predicted that the stock market would crash due to a speculative bubble. Shorts Tesla. -> SPX +16% Next 12 monthsOn Sept 2022, he predicted that the stock market warned of more failures, bottom not hit yet. -> SPX +21% Next 11 monthsOn Jan 2023, he predicts a recession and new round of inflation. Says “ SELL”-> SPX +17% Year to DateOn Aug 2023, Reveals Short Positions on the SPY and QQQ#MichaelBurry #stockmarketcrash

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It’s not our planned actions that usually get investors in trouble, but rather our unplanned reactions to market events (e.g., selling after a crash or chasing overvalued stocks ever higher). Practice situational awareness. We can’t possibly predict every bear marketcycle or market crash, but we can better prepare psychologically for when dramatic market fluctuations inevitably arrive. 👇 #WealthYourWay

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A look at all of Michael Burry's recent predictions.In 2005, Predicted the collapse of the subprime mortgage market-> Housing market crashes in 2008, Global Financial Crisis. On Dec 2015, he predicted that the stock market would crash within the next few months.-> SPX +11% Next 12 monthsOn May 2017, he predicted a global financial meltdown-> SPX +19% Next 12 monthsOn Sept 2019, he predicted that the stock market would crash due to a bubble in index ETFs -> SPX +15% Next 12 monthsOn March 2020, he revealed a massive bearish bet-> SPX +72% Next 12 monthsOn Feb 2021, he predicted that the stock market would crash due to a speculative bubble. Shorts Tesla. -> SPX +16% Next 12 monthsOn Sept 2022, he predicted that the stock market warned of more failures, bottom not hit yet. -> SPX +21% Next 11 monthsOn Jan 2023, he predicts a recession and new round of inflation. Says “ SELL”-> SPX +17% Year to DateOn Aug 2023, Reveals Short Positions on the SPY and QQQ

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Munger’s legacy is his track record and investment philosophy: i.e., “Quality stocks have to be underpriced to outperform in the long term.” In other words, buy low and don’t sell. The market is selling for 19x earnings: so which stocks are under-priced? Are homes and apartments under-priced? Is anything we buy under-priced? Fed governor, Austin Goolsbee commented last week: “housing is the key thing” to driving inflation down to 2%. The rally in November was a relief rally that asset prices won’t become under-priced, even if the market doesn't outperform in the long-term. All year long, Buffet and Munger couldn't find any “quality stocks” to buy. But Berkshire raised $130B in cash representing 30% of the portfolio. An all-time high. A eulogy that Munger wrote himself.

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Ever felt that others are making abnormal returns in the current markets and you are getting average returns in your SIPs? I have been there too!But always look at the long-term picture. A trader might make good returns in such bull runs but when a correction comes, these new-time traders usually have subpar returns. For a considerable period, SIP returns might seem modest, however, outlier events only make your XIRR spike up in the long run. So never stop SIPs!The key to this transformation is understanding the nature of the stock market—a ride of breakouts and pullbacks. Choose a fund which has been there for long and consistently invest over the long term to allow these fluctuations to average out.A 12%-14% return might seem below average. But here's the secret: the magic happens when compounding comes into play over 2 to 3 decades. Over time, returns on your returns start to snowball, leading to significant absolute gains.So, if you ever find yourself doubting your SIPs seeing others making abnormal gains in bull runs, remember these two principles:- During bull markets, your NAV increases.- But in bear markets, your units increase.And both are equally important when you talk long-term!#investing #compounding #sip

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Buffett vs Ackman*BUFFETT: WE BOUGHT $10B IN TREASURIES THIS MONDAY, LAST MONDAY*ACKMAN: WE ARE SHORT IN SIZE THE 30-YEAR TREASURYSWho’s right?Both could be right.The matchup between Buffett and Ackman encapsulates an Investor v Trader scenario.The outcome of any trade hinges not only on price levels but also on the chosen time horizon.Bill Ackman could be right in the short term if Fed sticks to its - inflation is still a problem - narrative.Ackman's approach is more akin to that of a hedge fund, with a trader's mindset: tight stop-loss measures, leverage, and a shorter time frame.Warren Buffett on the other hand could be right in the long term as his strategy is BUY and HOLD. He is more of a real money investor with a longer time frame.In my opinion, Buffett is rightly betting on the expectation that disinflationary forces (and a potential recession) will compel the Fed to slash interest rates in the medium term, consequently yield on 10y US Treasury could go down to 3% (or lower).Does TLT (chart below) look like a Sell to you?Not to me.Of course, long TLT is not a get-rich-fast trade. It has gone nowhere over the last 10 months despite a few short-term gains of over +10%Patience will be rewarded. I am with Buffett on this one as I believe disinflation will be with us very soon - look at producer price index (PPI) levels in China and the US.The prevailing level of the Fed fund rate, +5.25%, is detrimental to the health of the US economy.The chart below: TLT US (iShares 20+ Year Treasury Bond ETF is an exchange-traded fund incorporated in the USA)#Buffett#US#Treasury#TLT#Ackman#BondYield #Trader #Investor

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Going Long in Two Fields: Why TLT Could Be Your MVP During Recessions https://lnkd.in/guHt5a2f #DearMrMarket #DMM #Investing #Blog $TLT $AGG $SPAB $BND #Bonds #StockMarket

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Greed and Fear - Don't forget the L wordI wonder what the bears are going to hang their hat on, after Burry closed his shorts. They will find some new "technical" or "macro" or other reason to remain in cash or go short. I was a bear in late 2021 in anticipation of Liquidity being drained from markets and this happened, through the reverse repo window. In total, 2.5t was drained upto mid 2022. Since Liquidity built up the markets, any loss of Liquidity is to be feared.Since then, despite no Liquidity being drained, the bears are insisting that a crash is imminent for a number of reasons. I think they are going to regret this lack of clarity. Markets will only make new lows once more Liquidity is drained from the system and for now there are no such plans. When Liquidity is abundant, the path of least resistance is up and this applies for all assets (greed dominates fear). This means that the run up of gold and btc and stocks are not isolated phenomena and do not tell any new or special story except the acknowledgement that Liquidity remains abundant and will remain in place for the foreseeable future. Everything else is noise. Not advice. DYOR.

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# POST 1Below is the Nifty Smallcap 250 chart. This is my analysis as of 13/03/24 after the completion of today's trading session. This is a very likely scenario that might play out in the coming 1 year.According to the Elliot Wave Theory, there are 5 Waves in Every Bullish Market with Waves 1-2 and 3-4 being the correction phases of Waves 0-1 and 2-3. Also, of the Waves 0-1, 2-3, and 4-5 Wave 2-3 is the biggest of them all. The below chart depicts this pattern perfectly. Elliot Wave Theory also narrates that after the 5 Wave pattern, there is a correction that occurs in the market with 3 Waves 5-A, A-B, and B-C. Of the 3 Waves, Wave B is a pullback of sorts of Wave A, and Wave C is the final Major correction after which the Elliot Wave repeats itself as the Bullish market starts again.From the above theory, we can determine that there is not much downside remaining in the smallcap index, yes markets can still fall but unlike before when we were at ATH, where we did not know when the down move might come, for how long it may persist and how deep it would be, now according to my analysis, markets can fall about 2-5% more and then consolidate for some time and then can begin its new up move, So if someone wants to invest more or start investing, this might be good area to start considering where you want to invest. Nifty Midcap has the same chart formations, so one can consider the same outlook for midcaps as well.#stockmarket #smallcaps #midcap #elliottwave #bullishtrend #nifty50 #tradingstrategy #investingstrategy

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