'Big Short' investor Michael Burry warns of a massive bubble and epic market crash

Cheap stocks getting cheaper. Happens more often than what most poeople think. I had my fair share of cheap stocks getting hammered, now that I am in my 3rd decade of investing, thank goodness it is happening much less often, and the magnitude is not as significant as before. In my portfolio now, the worst one is down about 40%(and it is a big blue chip), which is not bad, considering it is not my current core holding and there are multi baggers within the same time frame. We just have to live with the fact that we will have losers.

Losses are important as it helps an investor grow, learn and become better. I dont think there is a better way to learn than to receive a painful lesson from losses earlier on in one's journey.

One important lesson I learnt is to try to avoid small and micro cap stocks. It is just not worth it. Most will fail spectacularly even if at certain point in their life cycle it MIGHT look like a decent business. The runway is just too short with insufficient funding and moat, and can easily fold with a slight hiccup.

The same can be said if one is starting a new business in Singapore. Unless the marklet is new and growing and you happen to be one of the very early birds, chances are that the business would fail. New businesses WILL fail by default. Most new business owners over estimate their own capability and fail to understand the very matured and competitive landscape, and with no space for new players doing the same thing.

A good watch from 14:00 onwards...he is telling you why the Taiwanese container shippers' share price cannot move, electronics companies...Tesla.....

'22.06.08【豐富│財經起床號】翁偉捷談「庫存壓力大增 短期頸線關鍵防線」
https://m.youtube.com/watch?v=RxlwTZJ-2jE

We probably see a lot of earnings revision coming....

https://mobile.twitter.com/TaviCosta/sta...5113892865

Dollar climbs to 20-year high as investors ramp up bets on the biggest Fed rate hike since 1994
https://markets.businessinsider.com/news...sis-2022-6


The Market Is "On The Edge Of A Huge Collapse"
https://www.zerohedge.com/markets/market...e-collapse

(14-06-2022, 01:38 PM)Behappyalways Wrote: We probably see a lot of earnings revision coming....

https://mobile.twitter.com/TaviCosta/sta...5113892865

https://fred.stlouisfed.org/series/T10YFF

US 10 year treasury should be around 1.5% to 2% above Fed's benchmark rates.

According to the “dot plot” of individual members’ expectations, the Fed’s benchmark rate will end the year at 3.4%, an upward revision of 1.5 percentage points from the March estimate.

https://www.cnbc.com/2022/06/15/fed-hike...-1994.html

If the Fed expects 3.4% by year end, then likely that 10 year treasury will probably hit 5%.

If the 10 year treasury bond rate is used as risk free rate, imagine the valuation of risk assets if it really hits 5%. Plus lower earnings due to recession, it would be a double whammy when you do valuation.

The next Fed meeting will be 45 days later and it is expected to raise rates by 0.5% to 0.75%. That meant that the 10 year treasury rate will probably rise to 4% by end July...



With no share buyback due to earnings announcements and probably earnings downgrade, things do not look good.

The sovereign bonds are probably going to get squeeze further with US increasing interest rate. Another good reason for me to like gold.

Anyone wants to buy the dip???
..........
The funny thing about the phrase "fortune favors the brave" is that the Roman author Pliny the Elder famously said this just before setting sail toward Mt. Vesuvius mid-eruption, and then immediately died

The rapid rise in interest rates will impact the story companies the most. All of them have showed no signs of being able to break even. This is true even if they were given a long run-way. No one will be willing to fund them from here on. For those not listed yet, their only source of private equity funding will dry up. For those listed, they can probably issue more shares at a steep discount, and if this works, they will continue to issue even more shares at even lower prices later on.

The soya bean drink stall boss has more business sense than that of the entire management of story companies combined. The soya bean drink stall business is also more sustainable and viable. I checked with one soya bean drink stall boss that makes their drinks in house and they use canadian beans. Interesting, canadian beans gives a good flavor.

For last ~70 years, when CPI has been above 3% the trailing PE has averaged 15x & above 5% has averaged 12x. Today it is 19x. From the 1972 peak to 1974 trough, the trailing PE went from 20x to 7x as CPI rose from 2.3% to 12.7% w/ the S&P losing 48% from peak to trough.

Not to forget there might be a downward adjustment of earnings which will make PE higher.

We probably have a sovereign bond crisis coming as US tightens. There might be a big opportunity for investors provided that one is able to protect their portfolio and cash in the first place. Risk off now till Fed pivots then All In

It's a catch22. If Fed funds goes 3.25-3.5% I suspect the yield curve might invert. Market is already looking at 2Q23 recession. Question is whether it will be a mild one.

2H22 inflation should come off to maybe 5% by year end due to higher base in 2H21. In fact the Core CPI and PCE is already showing that trend even as CPI bounced up to 8.6%

US 30 yr mortgage rates doubled to above 6% in a month. SG fixed mortgage rate above 2%. There will be short term economic pain for sure but I think the market looks forward so it's important to see what is the Fed thinking in next week's testimony and post July 50bp hike (if they hike 75 I think it sends wrong signal already).

I think economists underestimate 200bp hike in 6 months with QT on consumption and economic activities. Logistical bottlenecks including transport costs and energy prices are expected to come off in 2H22

But I do agree with Mike Burry that Biden's populist fiscal pump prime provided the spark. Biden signed the package in March and US inflation hit 5% in May and Powell say it was transitory

(16-06-2022, 03:54 PM)Behappyalways Wrote: https://fred.stlouisfed.org/series/T10YFF

US 10 year treasury should be around 1.5% to 2% above Fed's benchmark rates.

According to the “dot plot” of individual members’ expectations, the Fed’s benchmark rate will end the year at 3.4%, an upward revision of 1.5 percentage points from the March estimate.

https://www.cnbc.com/2022/06/15/fed-hike...-1994.html

If the Fed expects 3.4% by year end, then likely that 10 year treasury will probably hit 5%.

If the 10 year treasury bond rate is used as risk free rate, imagine the valuation of risk assets if it really hits 5%. Plus lower earnings due to recession, it would be a double whammy when you do valuation.

The next Fed meeting will be 45 days later and it is expected to raise rates by 0.5% to 0.75%. That meant that the 10 year treasury rate will probably rise to 4% by end July...



With no share buyback due to earnings announcements and probably earnings downgrade, things do not look good.

The sovereign bonds are probably going to get squeeze further with US increasing interest rate. Another good reason for me to like gold.

Anyone wants to buy the dip???
..........
The funny thing about the phrase "fortune favors the brave" is that the Roman author Pliny the Elder famously said this just before setting sail toward Mt. Vesuvius mid-eruption, and then immediately died

美國聯準會升息抗通貨膨脹 陳鳳馨示警：最慘的會是這兩個國家【Yahoo TV#風向龍鳳配】
https://m.youtube.com/watch?v=Wvbk-awgd2U

Bear rally probably ended yesterday although we have 2 more days to quarterly end where fund managers would make their portfolio looks 'nicer'.

Next month probably will be quite bloodly especially with earnings revision downwards and also a few events that might turn out to have negative bias( Japan, Europe and maybe bond yield rising significantly due to less buyers etc etc).

I would not be surprised if we hit 3500 on s&p soon maybe even lower within the month or so but we would also have bear rally in between. Quoting what a fund manager said, if you find it difficult to understand what is going on, best is to selling everything, sit out and just lose 8% of your cash to inflation.