Thursday, March 8, 2018

The Dumbfuck Bubble Is Ending. Badly

We're being drowned in an ocean of dumbfucks with dumbfuck ideas right now. Mass confusion reigns supreme. But don't feel bad because even (especially?) today's "best and brightest" gamblers don't know whether they are coming or going. They've been gamed by the dumbfuck bubble, with its eponymous leader...

"False alarm. Everyone back in the Dow"

Remember John Paulson, he was the billionaire hedge fund manager who attained his mythical status on Wall Street with 2008's, The Big Short.

"One of John Paulson’s hedge funds has plunged about 70 percent over the past four years, marking a dire stretch for the billionaire plagued with investor redemptions"

Meanwhile, some readers may recall my all time favourite hedge fund manager, Hugh Hendry. It was Hendry who coined the term that best describes the age of the dumbfuck. He called it, "Imagined Realities". Well he imploded in 2017, because under Trump, imagined realities went to level '11' and even the guy who invented the term itself, couldn't go full retard enough to make it work. I really miss this guy. 

Circa 2014, in hindsight, it's shocking that he lost his clients:

"There are times when an investor has no choice but to behave as though he believes in things that don't necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully."

Then there's hedge fund billionaire, Ray Dalio. Ray runs the world's largest hedge fund. In late January of this year at Davos, Dalio said that any investor who is parked in cash is a fool. The Dow dropped -10% in a straight line almost from the minute he said that. The biggest drop in two years, and the biggest one day spike in volatility EVER. Dalio was one of the pioneers of "Risk Parity" which is an automated form of investing that uses historical volatility to determine asset allocations. In February, the risk parity strategy had its worst one week return since 2013.

Dalio's fund is not publicly traded, but this fund gives an idea of how the sector is trading:

Then there's Bill Ackman another well known hedge fund guru. Ackman is one of the only hedge fund managers to IPO his fund:

Which brings us to Warren Buffett.

Last week at his annual meeting, the "Oracle of Omaha" embraced the dumbfuck bubble with uncommon zeal. He said that bonds are usually riskier than stocks. And that passive indexing is the best way to invest.

Combined, these are the the two greatest risks to the casino right now. And there is no way out, for the dunces who believe him. Picture the stock market (earnings) yield imploding with bond yields at cycle highs. One market massively overvalued and the other market massively undervalued.