Sunday, June 21, 2020

Betting On A Crash

It's totally impossible to sum up the insanity taking place in Disney markets at this latent juncture. We have now achieved FULL CASINO. Getting in was a lot easier than will be getting out...

What does $18 trillion in global stimulus buy? Epic delusion and late stage participation from retail bagholders. How ALL bull markets end.  

Last week, the self-appointed Lord of the day-trading Flies, Dave Portnoy proclaimed that he is a greater investor than Warren Buffett. Notably, he did not compare himself to the legendary investor in his heyday, but to the incumbent geriatric, who is now 25 years beyond conventional retirement age. A sleight of hand that went unnoticed by the lamestream media. When Buffett is dead, I assure you we will all outperform him handily in money market funds.

The bar is low and the arrogance is high:

DDTG = Davey Day Trading Global

Portnoy's "new army" of day traders and their circle jerk leader are nothing more than lucky dumbfucks who, having been deprived of their usual sports gambling addiction, turned instead to stay-at-home day trading at the nadir of the COVID crash. Aided and abetted by (ZH:) $18 trillion in global stimulus. A ludicrous mind boggling unprecedented amount of casino sugar money.

The difference between the soaring Portnoy and the faltering Buffett is where things get interesting - while both fancy themselves deep value investors, Buffett can't find anything to buy, while Portnoy can't find anything not to buy. In other words, one is schooled in fundamental analysis and the newcomer is merely a fortunate momentum gambler who is now using Scrabble tiles to pick his "investments":

During the March COVID crash, Buffett sold off all of his airline holdings, whereas Portnoy bottom fished those stocks at the lows for large % gains. Here we see via the airlines sector, how two different investors can view the exact same sector from opposite standpoints:

The true investor sees a sector that is enjoying a dead cat bounce after a massive crash. The newcomer sees a new bull market in airlines. The real investor understands fundamentals and is investing for the long haul, the charlatan is merely leading an army of short-term momentum followers off a cliff.

"Everything is up a BAZILL, when we count gains starting 12 weeks ago"

There is no question Buffett has lost a step. As he admitted recently, it took his entire lifetime dating back to his birth date in 1930 for him to see this kind of economic carnage.

Buffett's own stock, Berkshire Hathaway, is a very good bellwether for how things are going in the real economy away from MAGA cap Tech:

Any questions?

Here we see via banks what $18 trillion in stimulus buys.

It buys a massive sugar rally and late stage participation from retail dumb money.

Ironically, both Buffett and Portnoy's Robinhood acolytes missed the real move in the Nasdaq Tech bubble.

The gamblers playing Cramer's COVID-19 stay-at-home index are the ones enjoying the real market highs. There is no ETF yet, but there is an index on CNBC. 

The closest I can approximate is the "CLIX" long stay-at-home, short mall retail ETF. 

Basically a bet that the economy is set to implode. Mind you it will be a hard bet to collect upon. Only this Idiocracy would track an index of economic implosion and cheer as it went higher.

And then create an ETF to bet on it:

There is no stock that represents Portnoy's company, however casino company Penn National Gaming bought a large stake in January of this year. A very timely entry into the digital sports betting bubble. This stock has also been a beneficiary of the stay-at-home craze.

This stock top ticked the February high and also top ticked last week's S&P high:

Doing things in reverse with this blog post - casino first, economy second - below is my latest model depicting the economic future.

Needless to say, my 2020 prediction of epic market crash and rioting is right on track so far featuring the largest market crash in history and the largest protests in 50 years. 

However, what I was predicting was far greater in biblical scale. What we've seen so far is a minor preview of what's coming.

In summary, it's time to buy more toilet paper.