Eventually will result in an economic slowdown, so i'm afraid that the bears on this one have a a pretty strong argument that concerns me a lot. You know you avoid taxation or any sort of you know. Government rules about kidnapping fees or things until we get there, which we're absolutely not bill gates has been selling his stocks to prepare for one of the worst economic disasters in history. Gates is known for being a ceo and he's even better at capital growth through the help of his fund manager.

Michael larson gates managed to make 50 billion dollars over the past 20 years gates and larsen not only made billions from the bull run, but also successfully prepared for the dotcom bubble in the 2008 recession. This has allowed him to consistently beat the s p, 500 and grow his wealth to new heights gates and larson are now aggressively preparing for what will become one of the worst recessions of all time. It's no secret that the economy is in a tough position. The us economy is undergoing accelerating inflation, the lowest consumer sentiment in history, the russia, ukraine, war, low consumer savings rates and record high debt levels.

The government pumped trillions of dollars into the economy in 2021 2022 is the complete opposite of that with the government pulling back trillions of dollars out of the economy. Gates is especially concerned about the artificial trap that the fed created for themselves. The economy is currently being hit by a double-edged sword. One edge of the sword is accelerating inflation, and the other edge is the massive level of government debt.

The government now has two choices: to destroy the us dollar or crash the economy. At the risk of popping the debt bubble, the fed has decided to go with the second choice of slowing the economy at the risk of an unprecedented collapse. We recently saw the fed raise interest rates by 75 basis points which is the largest increase since 1994.. This increase helps substantially with slowing inflation, but it comes at substantial risk.

First of all, raising rates that sharply means that borrowing will cost significantly more for business investments and mortgages rates on the 30-year fixed rate mortgage recently increased by the largest one-week jump in 35 years. If this increase in interest rate slows the economy too much, it could pop the existing debt bubble and spiral the economy into a recession or depression. So since we last talked a small thing has happened, russia has invaded ukraine and it feels like we're. In a new world, we are going to be seeing higher energy prices higher food prices.

Four years to come. It seems difficult to see how this resolves itself very quickly. What does that say to you about the economic outlook for the next few years? Well, it comes on top of the pandemic, where government debt levels were already very, very high and there were already some supply chain problems, and so it's you know likely to accelerate the inflationary problems that ritual economies have, and you know, force an increase in interest rates That eventually will result in an economic slowdown, so i'm afraid that the bears on this one have a a pretty strong argument that that concerns me a lot. The bare thesis that gates is talking about makes complete sense.

A certain oil prices is strongly correlated with recessions. The gray areas in this chart are periods in which the u.s economy was in a recession. You can see how every time brent's crude oil crosses 100 per barrel. A recession almost always follows.

Brent's crude oil is currently at roughly 120 per barrel. Signaling that a recession is coming. The reason why a recession almost always follows oil prices. Breaking 100 is because rising oil prices are a taxed against the consumers.

High gas prices take money directly out of the consumer's pocket. This not only leaves the consumer with less money. To spend, but it also drastically lowers consumer sentiment. The university of michigan consumer sentiment index shows that the consumer sentiment is currently the lowest it has been since the 2008 recession.

The economy works in cycles with debt levels continuously peaking and bottoming in a cyclical form gates and larsen recognized that 2021 represented a period of immense speculation. The complete opposite of this is coming a considerable economic slowdown in preparation for a collapse in the u.s stock market gates and larsen have been implementing a variety of hedging strategies. One of these strategies includes shorting stocks. Unlike long positions, short positions, don't have to be disclosed to the public.

The sec is trying to change this with a new proposal, but until that goes through, we have no idea what stock's gates is actually shorting with. That being said, we know that gates has a short position against tesla stock, because elon confirmed it himself gates touts himself as a strong supporter for sustainable technologies. But musk believes that his tesla short position contradicts this musk tweeted. That sensegate still has a multi-billion dollar short position against tesla, while claiming to help with global warming.

I guess i have some trust issues with him. Too. Gates is already down over 1 billion dollars on his tesla short position, but he clearly hasn't closed out his position. Yet elon explained how it was 500 million, but then tesla went up a lot.

So now it's 1.5 billion to 2 billion dollars to close it out, gates and musk were about to meet to talk about philanthropy, but leaked messages show that gates tesla's short position, hindered the meeting from occurring gates, texted 7 20 on wednesday, to be clear to which The elon replied by saying great gates, then told elon that he just landed elon said cool. Do you still have a half billion dollar short position against tesla gates admitted that he had a short position by replying sorry to say i haven't closed it out. I would like to discuss philanthropic possibilities. Musk confirms that these leaked messages were true and claims that gates having a tesla store position, isn't top secret at all.

Though, tesla stock experienced substantial price appreciation in 2021, the epitome of the bubble was the rise of nfts nfts. Like the boarded yacht club rose by hundreds of percent before recently dropping by over 80 percent in two months, while there is long-term potential for the ethereum platform, there's no reason for pictures of apes to be trading for hundreds of thousands of dollars gates recently criticized the Bordeap yacht club for the lack of utility that it provides. I don't know i mean obviously expensive. You know, digital images of monkeys are going to improve the world immensely.

We all agree on and uh. You know that's so incredible. Uh anyway, i'm used to asset classes where, like a farm where they have output or a company where they make products, have an asset class. That's a hundred percent based on sort of greater fool theory that somebody's gon na pay more for it than i do.

Uh and where it has at its heart sort of this anonymity that you know you avoid taxation or any sort of you know, government rules about kidnapping fees or things um anyway, i'm not involved in that i'm not long or short any of those things at the Time that i'm recording this video, the s p 500, is still over 15 higher than its p pandemic. Peak gate sees no reason for that to be the case, the economy was much stronger before the pandemic hit, consumer activity was booming and the supply side was as well. The pandemic has a serious impact on both consumers and suppliers. Money, printing can't just boost economic activity.

Back to pre-pandemic levels, the economic impact of the pandemic is still being felt today, the behavior of people in terms of wanting to travel or go to events or even go to a restaurant. It's been utterly changed by uh the concerns about this disease, and so until we can say to people that we're tracking this thing so well that actually going out to your job uh, you know to a car factory uh to a construction site uh that those are Safe enough uh that you know we feel confident you can do those things until we get there which we're absolutely not uh. No one should think the government can wave a wand and all of a sudden you know the economy is anything like it was before this happened that awaits either a miracle therapeutic that has an over 95 curate or broad usage of the vaccine and uh. So you know, we've had a demand side shock and a supply side shock, and that demand side piece is both mediated by fear of infection and by the overall wealth effects of many people losing their jobs and entire industries will be operating at a far lower level Than in a normal economy, in addition to the economic landscape, being fragile gates also doesn't believe that the pandemic is over gates, told the financial times that we're still at the risk of this pandemic, generating a variance that would be even more transmissive and even more fatal.

He explained further by saying that it's not likely, i don't want to be a voice of doom and gloom, but it's way above a 5 risk that this pandemic we haven't seen the worst of it. So not only do we have high inflation and liabilities, but also a pandemic that could still get worse. All of these factors combined, put the us at risk of a frightening economic and social crisis. Gates mentioned productive assets as his specialty when it comes to investing, but he actually has been selling his assets.

His most recent quarterly filing for the first quarter of 2022 revealed that he sold millions of shares in a variety of companies. This included over 1.3 billion dollars of berkshire hathaway over 500 million dollars of caterpillar and a vast array of other stocks. In order to understand why gates is selling his stocks, we have to dive into michael larson's strategy. Larson is the brains behind the operation.

He knows exactly how to maximize alpha, which is known in the investment world as the risk-adjusted return. While the market crashed immensely during the 2008 recession gates experienced a very small decline in his net worth according to sources close to him, although larson's strategy has remained secretive, we know from public filings that he mirrors buffett's investment strategy. If we take a look at the holdings and gates portfolio, we can see how most of these companies would not be impacted by economic fluctuations. One instance of this is waste management stock, which gates owns 3 billion of nobody is going to stop dumping their waste, because the stock market is down 50 percent.

Another component of larson's strategy includes diversifying into other asset classes. Gates is the largest u.s private owner of farmland for two reasons: high alpha and diversification farmland averaged a return of over 11 from 1991 to 2018, with not a single year being negative. This is because, during a recession, people are not going to stop eating food. This allows farmland to have a high alpha because it delivers high returns with little to no downside.

Larson is also known for investing in alternative assets, such as private equity, which involves buying out private companies similar to farmland. Private equity is a sector, that's not available to retail investors like you and me, however, for gates, private equity is a fantastic way to hedge his portfolio. Further through diversification. Let me know whether you are selling stocks like gates down below.

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