A week or so ago, I shared a third person diatribe post against the permabulls entailing the state of events around the world today. I’ve been pretty vocal against permabulls on here as of late, for good reason.
Over the past few days, I’ve begun to see more interest in crypto and speculation arise and think its time to start waving the warning flags.
Why? Allow me to explain.
You’re not an Expert
It’s kind of funny the way probabilistic thinking works. On the counter, you like to believe you follow it and would know when it’s time to get out. The reality however, is a much different story. None of us are immune to human emotion and at some times, exorbitant greed witnessing life-changing returns.
It’s in these very moments where the people who can weather the storm stand out. Those same people, you’re probably calling crazy. Remember that Michael Burry guy? After the movies catapulted his name to a pretty much household one, he’s been giving the same warnings today he gave back then… on almost literally every asset class/sector.
What are you doing? Not listening.
This isn’t a dig at you or anyone else, it’s just the way the untrained and unexperienced mind works. Am I extremely experienced and/or an expert? Hell no, but I’ve come to realize that there’s people who speak to say something and others who speak because they have something to say.
The key differential here is having something to say. In times of exuberant optimism, everyone has to say something. Few rarely speak because they have something to say. It’s those people who are usually worth listening to.
Things are About to get Nasty
There are some catastophic threats to our basic humanity today, not just in the markets. Our right to assemble and freedom of speech is being taken away from us nearly daily. Call me out or cancel me if you’d like, but before you decide to do so, realize that you’re contributing to the very accuracy of the statement I just made.
On a macro scheme there are so many warning signs going off I truly could not list all of them. I’ll preface this with a few examples.
Just this week, I was cold approached by a realtor for selling our property. This has never happened before, ever. Someone literally came to the front door and asked if we were interested in selling our property for just the land. She proceeded to tell me the couple (I assumed elderly) wanted a nice amount of acreage to settle down with. I gave her a price and she laughed it off but proceeded to give contact information.
Being the thinker I am, I already knew what she was trying to do as soon as the words “just the land” came out of her mouth.
First off, we have about 7 acres of land with a majority fenced. In terms of mowing/maintenance, no elderly couple could upkeep this property. To upkeep it even by paying someone, it’s outside of most people’s budgets. These things are just matter of fact, I know, and I’ve maintained it for quite some time now because I don’t believe in paying for that kind of stuff.
Anyways, right across the road is a stretch of nothing but doctor offices and businesses. A natural assumption to the logical observer is they want to move across the road and expand. Human nature and sound business sense also says, they’ll try to do it as cheaply as possible.
Combine this with the fact this land is worth a significant sum commercially (I do not feel comfortable sharing an exact figure for security reasons), interest in real estate has never been higher. It’s the one thing no one can make any more of either.
That said, being cold approached like this wove a massive flag and realization. It’s about time to get out.
Example number two happened recently as well. On the not so frequent occasion, I’ll be asked by close fiends what I’m looking into or interested in investment-wise. Begrudgingly, I make the mistake of sharing to be a good friend and lead them to my line of thinking.
I don’t take it all the way, though. Because I want them to dig and learn themselves.
Well, the problem with taking that approach is most people don’t want to think for themselves. Everyone wants a handout and something that can net them a good return, without any effort on their part. I suppose it was silly for me to think otherwise.
That said, these people in question disappeared when things went opposite of immediate gratification. The newsflash, they’re back now when things are looking good.
Long story short, this instance has me net short. As it should you, too.
Queue the Madness
I’ll cut to the chase and make a bold prediction for the short-term.
The next few weeks will be the wildest ride we’ve ever witnessed across asset classes and crypto. I know of quite a few people who have exited everything recently. However, the markets always work in strange ways. Not even the smartest of your peers are immune to it.
They’re designed to REKT the impatient and reward the patient as that outspoken old guy (Warren Buffett lol) always said. That said, I’m of the opinion that the results of what’s going to ensue will be the greatest financial opportunity that will be presented in our lifetimes. For at least half a century.
The amount of innovation taking place today is being outpaced by valuations that are unsustainable. Both crypto and equity abroad.
What will come out of the dust will be outliers unlike any other we’ve seen. I guarantee you the examples and people I described above will probably never talk to me and will end up washed.
What happens to you, is up to you.
As my great grandfather said in a series of letters with advice he never followed, “I’m handing you the ball, the ball is in your court”.
Maybe I’ll share these sometime.
Until then, be probabilistic.