GM. This is the Milk Road, the newsletter that's more energizing than a swig of Monster Energy.
Now let's get into the good stuff:
- The Big Short guy says the bottom isn't in
- Quick Bites
- Meme of the Day
THE BIG SHORT GUY SAYS THE BOTTOM ISN'T IN
Michael Burry recently made a big move - he sold all his stocks.
Every. Single. One.
If you don’t know Burry, he’s the “Big Short” guy. And no, he’s not 5’2 and 450 lbs.
- A successful hedge fund manager
- Predicted the housing crash in 2007
- Made millions betting on it
- Had a movie made about him
Needless to say, he’s pretty well-known in the investing world and a lot of people watch his portfolio closely.
So why’d he sell his stocks? He doesn’t think the bottom is in. In fact, he only thinks we’re about halfway there.
This isn't the first time he's said the bottom isn't in. But it is the first time he's sold everything.
But before we jump into his reasoning, let’s get the big question out of the way…
What does this have to do with crypto? Well, crypto and stocks are heavily correlated at the moment. It actually hit all-time highs earlier this year.
Just check it out.
Basically, crypto & stocks are two-stepping with each other. With the S&P500 leading the way.
If it goes up, so does crypto. If it drops it **low, low, low** then so does crypto.
So when a big investor like Burry makes a big move like clearing out his entire stock portfolio, it should definitely catch your attention in crypto.
So what’s his reasoning? He thinks 2 things:
1/ We’re in the greatest speculative bubble of all time
Burry has been saying this for the last 8-12 months and has predicted the bubble was gonna pop soon. But he’s held on to most of his stocks, so people didn’t take it too seriously.
Up until last month where he sold everything except one thing…GEO Group - a private prison operator. Because apparently prisons are a recession-resistant investment. Who knew??
2/ He thinks we’re only halfway through the crash and stocks will plummet another 20-35%
He believes the first half crash was due to “multiples compressions”. This second-half crash will be because of “earnings compression”.
Multiple compressions are when company earnings increase or stay the same, but the price of the stock lowers.
Earnings compressions are the fall in company reported earnings due to an economic slowdown.
Still, it definitely catches our attention when a prolific investor sells everything. We can’t predict the future, but buckle up, folks - we might be in for a ride.
And if you wanna go watch the interview, we got you.
TODAY'S EMAIL IS BROUGHT TO YOU BY COMPOSER
How did this hedge fund return 66% per year?
If you invested $10,000 in Renaissance Technologies’ Medallion in 1988, you’d cash out in 2018 with a cool $200,000,000.
Their secret sauce? "Quantitative Investing."
Instead of hiring slick-talking Wall Street suits, Medallion is run by an army of computer scientists, mathematicians, and neural engineers that specialize in quantitative investing that eliminates human biases (fear, greed, FOMO).
Unless you are a PHD-wielding, Python-coding, Excel-Wizard…that type of quant-trading has been out of reach. Until now…
Composer gives you the financial firepower to easily drag, drop, edit and swap quant-investing strategies from scratch - no engineering degree required.
They even have a library of expertly vetted strategies to choose from like: Buy the Dips Nasdaq, The Buffett, and The Dalio.
Binance launches ETH staking ahead of the Merge. Binance says, “they have no control over the manner and ultimate amount of staked ETH investors get back” - say what?
FTX partners with Gamestop to introduce crypto to GameStop customers. We like the.. crypto????
Coinbase submits a proposal to manage $500m MakerDAO funds. Coinbase wants to be Maker’s JP Morgan - not everyone at Maker is cool with trusting a centralized exchange.
Sorare partners with the NBA to launch an NFT fantasy basketball game. Move over TopShot, the NBA found another NFT partna’.
WeatherXM deploys infrastructure for 700 decentralized weather stations to harvest local data.The weather stations get tokens in return. Say hello to “weather miners”
MEME OF THE DAY
That's a wrap for today, see ya tomorrow!
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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